The mid-week session at the Malta Stock Exchange consisted of trading in five components with the total number of deals amounting to 15 for an aggregate value of €30,607. The MSE Index reversed the downward trend persistent during the past five sessions, when it gained slightly to close at 3,339 points.
A single trade in Malta International Airport for a low volume of 800 shares was struck at the price of €2.25, which represents a decline of 7c9 or 3.39 per cent, which left the equity as the only component ending negatively during the session. This is the lowest price at which trades in MIA shares have been executed since September 2004.
Turnover of 1,000 shares in Datatrak Holdings caused the equity to register the highest percentage increase for the day of 3.33 per cent to close at €0.31, the highest level reached this year.
The highest volume of the day was registered in HSBC Bank Malta when five deals were executed for a total turnover of 4,370 shares which saw the equity priced higher by 1c to end the day at €2.92.
Trading in Bank of Valletta consisted of 3,947 shares which were exchanged over seven trades to close up by 1c at €3.62.
Lombard Bank Malta's share price closed unchanged when 500 shares were traded across a sole transaction at €2.948.
In the fixed interest sector of the market, activity was spread across two corporate bonds and three government stocks.
The 5% MGS 2021 attracted the highest turnover, with 91,000 nominal, inching higher by 0.60 per cent at €103.46. The highest percentage increase in the local bond market was registered in the 5.1% MGS 2022 when 1,165 nominal were swapped at a price of €104.15 therefore trading up by 0.85 per cent.
Weekly UK economic review
Just as the Monetary Policy Committee decision to slash 150 basis points off the bank rate came as a surprise, so too did the magnitude of the decline in the bank of England's (BOE) Consumer Price Inflation (CPI) forecasts in the November Inflation report issued late last week. The BOE now sees inflation below one per cent by mid-2010, which would require an open letter of explanation to be written to the Chancellor, as such a rate would substantially undershoot the target rate of three per cent.
If the bank rate was held at its current level of three per cent, the BOE suggests that there is a 20 per cent chance of deflation next year.
The bank also acknowledged that the previous prospects for the UK economy were too optimistic, as the 1.3 per cent contraction in 2009 highlights. Governor of the BOE, Mervyn King who is renowned to be apprehensive when it comes to government direct intervention in financial markets, stated that in such dire times, injecting public money into the economy would be "perfectly reasonable".
A fiscal stimulus should be presented in the November 24 pre-budget report. This fiscal package should hopefully stimulate the economy in such a way that the BOE would not be forced to lower rates by more than the 50 basis points that is currently being expected, in its December meeting.
Now that the economy started to contract, it is not a surprise that conditions in the job market turned for the worse in the three months to September. The unemployment rate edged up to 5.8 per cent from 5.7 per cent, driven by an additional 140,000 people looking for work. Things are likely to get worst before they get better.
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.