During the mid-week session at the Malta Stock Exchange, the MSE Index saw a slight increase, gaining 0.02 per cent to close at 3,827 points, supported by continued interest in the largest component by market capitalisation. The day's trading consisted of 37 deals spread over five distinct equities with an aggregate value of €123,085.
Prior to the market's open RS2 Software, the most recent listed equity, published its interim results for the period ended June 30. The specialised financial services software solutions company announced an impressive 92 per cent increase in revenues, reported at €5.3 million on the back of licence agreements which materialised earlier than envisaged. The company posted a pre-tax profit of €2.6 million, a 167 per cent increase over the corresponding period last year. However, the market failed to react with just a single transaction for 3,700 shares being swapped at the €0.81 level.
Demand for HSBC Bank Malta amounted to 19,221 shares which were purchased across 22 transactions in the €3.18 to €3.149 range. The equity ended up closing at €3.17, which represents a 2c or 0.63 per cent premium to its previous closing level.
All transactions in Go, which amounted to 10,950 shares spread over seven deals, were struck at €2.40 which corresponds to a decrease of just over two per cent.
FIMBank's share price closed unchanged when 8,300 shares were traded over two trades at $1.886. On Thursday, August 21, the company will publish its interim results for the period ending June 30.
Interest in Bank of Valletta to the tune of 5,404 shares left the price unchanged at €4.15, having traded 3c lower at the start of the session.
In the fixed interest sector of the market, activity was spread across nine corporate bonds and 11 government stocks with the 5% MGS 2012 attracting the highest turnover of 638,977 nominal, whilst the 6.45% MGS 2014 (II) registered the biggest percentage gain of 2.31 per cent moving higher to close at €107.98.
Weekly UK economic review
The Bank of England (BOE) left interest rates unchanged at five per cent, as already priced in by market participants. The BOE looks set to keep on struggling as conflicting data regarding inflation and economic growth linger on.
The Purchasing Managers' Index (PMI) which is one of the best forward looking indicators of economic activity is currently pointing to further deceleration in the UK economy. The composite PMI was 46.3 in July, the third consecutive month below 50, thereby indicating contraction in the economy.
The BOE's quarterly inflation report issued yesterday showed that the Consumer Price Index is expected close to five per cent over the next year before falling back dramatically as the effects of higher food and fuel prices abate. The bank's central forecast is for inflation to stand just below the two per cent target if rates move in line with the yield curve.
Most analysts are expecting rates to stay on hold for the next couple of months but after yesterday's report hinting for lower inflation, expectations of possible rate cuts will be boosted.
The BOE also stated that Gross Domestic Product (GDP) should be "broadly flat over the next two years or so". It should then pick up to around 2.4 per cent in two years. This compares negatively to what was predicted back in May.
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.