On a relatively muted session at the Malta Stock Exchange yesterday, the MSE Index registered its first gain since July 22, when the index closed at 4,167 points. This downtrend was broken when the reading stood at 3,794 which represents a gain of 0.75 per cent on last week's closing. Trading was restricted to three components with 30 equity deals for a total aggregate value of €129,651.
After a long negative streak, HSBC Bank Malta posted a slight rebound after a respectable gain of 3.45 per cent over a volume of 5,600 shares dealt over eight transactions. Activity started late in the session at €2.95, a straight 5c higher from its last closing, with sustained interest pushing the price higher to close at the €3.00 level. At the end of the day 1,300 shares were best bid at €3 against a supply of 3,612 shares at €3.15.
Bank of Valletta was the day's only laggard as the equity traded down when its first deals for the session were matched within a strict range, registering a daily low of €4.249. Total turnover stood for 14,605 shares exchanged over 14 transactions, with the equity closing at €4.25, which represents a decline of 1.16 per cent over its previous price.
Go's share price closed unchanged when 20,350 shares were traded over eight trades at €2.50. On August 28, the company will publish its interim results for the period ending June 30, 2008. Before the start of the session, Plaza Centres issued its half yearly report for the period ended June 30, wherein turnover for the period was over €0.8 million and profit before tax amounted to €596,459, representing a 7.18 per cent increase over the same period last year.
Weekly US economic review
As it was widely expected the Federal Reserve kept the funds rate unchanged at two per cent at its August 5 meeting and did its best to keep a neutral stance in the accompanying statement. This was evidenced by the Federal Open Market Committee (FOMC) when it stated that "although downside risks to growth remain, the upside risks to inflation are also of significant concern to the Committee". There was nothing in the statement that suggested any moves in the near term.
The statement also mentioned that "financial conditions remain under considerable stress" and highlighted the "further softening" in labour markets, which was once again confirmed by the jobless claims in early August.
There was only one dissent during the FOMC meeting where arch inflation hawk Richard W. Fisher voted for a rate hike for the fifth consecutive meeting. Mr Fisher is the only FOMC member who believes that the Fed should aggressively reverse course.
The influence of inflationary hawks has skewed the public debate on the likely path of the US monetary policy towards a tightening bias.
Meanwhile, the non-manufacturing Institute of Supply Management printed below the 50 level mark, a level consisted with contraction in the sector. The headline rose to 49.5 in July from 48.2 in the previous month; in five of the past seven months, this series has pointed to contraction.
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.