Following the weekend break investors returned to the market with the sole appetite of trading just banking stocks, with all four listings attracting activity. A slight weakness in the largest capitalised equity meant that the MSE Index closed 0.1 per cent lower at 3,820 points.
Bank of Valletta was the day's most liquid and actively traded equity, with investors snapping up 10,450 shares, for a market consideration of €44,925, across 10 transactions without altering its previous closing price of €4.30. At the end of the session, 5,000 shares were best bid at €4.28 against supply of 600 shares offered at the €4.305 level.
Slim profit taking activity hit HSBC Bank Malta, as 2,800 shares were sold across two transactions, squeezing the price lower by 1c2 or 0.4 per cent to terminate the session at €3.10.
FIMBank continued to gain following Friday's interim results which saw the trade finance specialist register a massive increase in pre-tax profits, reported at €33.9 million, primarily due to an extraordinary profit of €29.1 million following the disposal of its associated undertaking in India. The directors declared an extraordinary dividend of $0.0329 per share which will be paid to all registered holders as at September 5, this year. During yesteray's session a further 6,000 shares were purchased pushing the price up by 0.5 per cent to close at the $1.95 level.
Activity in Lombard Bank Malta consisted of 1,070 shares which were purchased across two transactions at the €2.90 level which represents the slimmest possible gain for the equity.
In the fixed interest sector of the market, activity was spread across three corporate bonds and five government stocks, with decliners across the board outpacing advancers by 3:1. The 6.75 per cent United Finance 2014/16 gained 26 ticks as 4,700 nominal were exchanged at €100.01 while the 4.60 per cent HSBC Bank Malta 2017 and the seven per cent Pavi Shopping Complex 2014/17 declined slightly to close at €96.38 and €96.79 respectively.
Weekly US economic review
The US slowdown is likely to deepen in the second half of the year as housing continues to slump and unemployment rises, according to a measure designed to predict the economy's direction. In fact, the Conference Board's index of leading indicators fell 0.7 per cent in July.
On the inflation front, data was rather gloomy. Prices paid by US producers rose twice as much as economists had forecast in July, reflecting the jump in energy and commodity costs that has since started to wane. The Producer Price Index (PPI) rose by 1.2 per cent during the month of July.
The employment survey revealed that the initial jobless claims fell by 13,000 during the month of August while continuing claims fell by 17,000. This suggests that the recent increase in the national unemployment rate to 5.7 per cent is unlikely to reverse anytime soon. While a further rise in the unemployment figure is not expected during the month of August, it is still expected to rise slightly by year end.
In conclusion, the Philadelphia Fed's manufacturing survey showed continued contraction during the month of August. New orders, shipments and employment all improved, but pointed to further contraction in activity. The six month outlook actually improved, although the weakness in key forward looking components, such as new orders and order backlogs suggests the outlook is not as bright as survey respondents anticipate.
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.