A somewhat muted session kicked start the week on the Malta Stock Exchange as trading activity did not alter significantly the Index's performance, at it closed relatively unchanged at 4,163 points. The session consisted of 23 equity deals carrying 45,248 shares with a total traded value of €118,763.
The largest daily increase was registered in Crimsonwing when two investors swapped 6,762 shares at €0.53 which represents a 1c or 1.92 per cent increase over its previous level. The closing picture reflected a lower bid price of €0.52 for 9,900 shares, whilst the best offer for 10,128 stood at €0.56.
Following a week of decline, Bank of Valletta saw an increase of 1.09 per cent when early trading at the previous closing price of €4.60 cleared the board of 2,468 shares, with further buying interest of 7,200 shares pushing the price higher to close at the €4.65 level.
All activity in Grand Harbour Marina was executed during the last half hour of the session when the equity shed five cents or 2.33 percent to close off the session at €2.10, thereby terminating the session as the main laggard on the index.
HSBC Bank Malta was the day's most liquid and actively traded equity. During Monday's session a grand total of 13,200 shares, carrying a market consideration of €50,327, were swapped across 9 transactions, to see the index heavyweight loose two cents from its previos close and settling at €3.80.
Trades in MaltaPost failed to alter the price of €0.80, as 2 deals carrying 10,031 shares were executed.
Weekly US economic review
During last week's speech before congress Federal Reserve (Fed) Chairman Ben Bernanke suggested that the Fed's special liquidity provisions may need to be extended into next year. Implicitly such a comment reinforces the Fed's concerns about downside risk to growth, even though the previous Federal Open Market Committee was generally believed to express a bias towards inflation risk.
The US consumer is facing serious headwinds, with persistent worries that the economy can still lapse in recession. Gross Domestic Product (GDP) is anticipated to grow by less than two per cent with second half growth worse than expected. This is the result of significantly diminished household buying power as well as an oil- led commodity shock, which shows little near-term indication of abating.
The University of Michigan consumer sentiment did not provide much support to the markets either. Although the headline July figures were ahead of expectations and higher than June's figures, the details revealed that the outlook on the economy continues to decline. This survey lends support to forecasts that consumer spending and the US economic expansion will slow after the effect of the tax rebates fade.
Meanwhile, the number of Americans collecting unemployment benefits climbed to the highest level since December 2003, reflecting a deteriorating job market that threatens to hurt consumer spending.
In conclusion, foreclosure in June increased by 53 per cent due to a combination of falling prices, mortgage resets, tighter lending conditions and rising unemployment. With inventory close to 10 months of supply, it is anticipated that the glut of foreclosures will add further to inventory, putting further pressure on prices.
This article has been prepared by Bank of Valletta p.l.c. (the Bank), which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the Bank to acquire or sell securities. Nor does it constitute any form of advice by the Bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.