A negative start for the first day of the week at the Malta Stock Exchange saw a decrease in the Index of 0.23 per cent to close the session at 3141 points. Activity was restricted to three equities, all in the financial services sector, with trading spread over 33 deals for a total value of €92,540.15. During the session no equity made further gains with two listings registering a decline which dragged the MSE Index lower.
Bank of Valletta was the most actively traded equity during the day as a total of 16 deals were exchanged for a volume of 13,258 shares. The bank was also the most liquid listing as a total value of €34,508 shares were traded without modifying the previous price of €2.60.
HSBC Bank Malta also registered trading as a total of nine deals were exchanged for a total market consideration of €32,183. The financial services company incurred a slight loss with the price depreciating by a marginal 1c or 0.4 per cent over Friday's reading, to end the session at €2.70. Later this month the Bank will be publishing its full year results for the period ending December 2008.
Lombard Bank Malta was the worst performer for the day as the listing dropped by 8c or a 2.8 per cent to end the session at €2.75. Trading activity was spread over eight deals for a market value of €25,850.
In the fixed interest sector of the market activity was above average and spread across 11 government stocks and five corporate bonds. Government stocks performed positively during the session with a total of seven out of 11 securities registering an increase in price.
The 6.35% MGS 2013 (II) registered the most notable increase, moving higher by 0.77 per cent.
Both the euro and sterling tranche of the 7% MIDI 2016/2018 traded during yesterday's session and both moved higher by 50 ticks to close at €101.00 and £101.25 respectively.
Weekly US economic review
The US economy was flushed with economic data over the past week. There was no surprise from the Federal Open Market Committee (FOMC), while the fourth quarter Gross Domestic Product (GDP) came in above expectations, although still on the negative side.
The FOMC's statement reiterated many of the themes from the prior meeting, although there was a perceptible downward shift in the assessment of economic conditions and inflation. Economic information issued since December pointed to further economic deterioration. On the inflation front the Committee commented that "some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term". This puts the spotlight firmly on deflationary concerns.
Meanwhile, US GDP contracted by 3.8 per cent in the fourth quarter, a significantly smaller contraction than the expected rate of 5.5 per cent. The business segment joined the consumer during the quarter in question, to contribute to the decline in economic activity, as fixed investments plummeted by -20.1 per cent. Inventory surplus was largely responsible for this better than expected figure. This overhang of inventories bodes extremely negative for the US economy, as the upcoming run down of these inventories will drag the GDP into further misery.
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.