Trading for the first day of the week at the Malta Stock Exchange resulted in an increase to the Index of 0.73 per cent to rise slightly above the 2,700 level. Activity in the equity market was spread over 38 deals with a total of three listings active for the session. The day's trades resulted in no losers with two components registering an increase in price to further support the Index.
Go was the day's best performer as the equity gained 9c7 or almost seven per cent to close the session at €1.497. The quadruple play communications company was also the day's most actively traded listing with activity spread over 16 deals and a market consideration of €43,729. Investors deemed fit to up the price of the equity after last Friday's results, where the company's financial statements highlighted an improvement in the company's gross profit margin thanks to cost cutting. The Board of Directors also recommended the payment of a final net dividend of 12c per share. HSBC Bank Malta was also a gainer for the day as the equity rose by 2c which equates to almost a one per cent increase to terminate at €2.18, thereby reverting Friday's decline in price. The bank was also the most liquid component as 31,362 shares were exchanged over 15 deals with a market value of €68,299.
Bank of Valletta was also active for the day albeit on a low volume of 2,655 shares struck across a total of seven deals. The financial services company was the sole non-mover of the session as the price closed unchanged from last week's closing price of €2.20.
In the fixed interest sector of the market activity was relatively widespread as over 11 government stocks and four corporate bonds were traded on the day. In the government securities nine out of 11 stocks ended the day on a positive note with the five per cent MGS 2021(I) registering the most significant gain, as the issue rose by 35 ticks to a closing price of 103.35. The government also announced that it will be issuing a fungible tranche of the recently issued 3.6 per cent MGS 2013 in the coming days.
Weekly US economic review
A surprise announcement from the Federal Reserve made all the economic data released during the week look less important. The Fed geared up its quantitative easing programme as it announced that it will purchase up to $300 billion in longer-term Treasury securities over the next six months.
According to the New York Fed, the purchases will focus on the two- to 19-year sector of the nominal Treasury curve. The Fed also announced that it will purchase an additional $750 billion of agency Mortgage Back Security, thereby reaching an aggregate of $1.25 trillion and it will also purchase another $100 billion of agency debt up to a total of $200 billion. The agency MBS and agency debt purchases should help drive mortgage rates down. Overall, no one knows whether these measures will indeed work, but at least we can see that the Fed is doing everything it can to improve the current situation.
Meanwhile, housing starts soared by 22 per cent in February while building permits also rose by three per cent. The spike in housing starts is likely to have been caused by the unexpected warm weather. Although smaller at face value the rise in building permits is somewhat more encouraging as the impact of seasonal factors should be practically non-existent.
Producer price figures and consumer price inflation were both on the upside, though marginally. Inflationary figures at both gate way factory levels and retail levels are expected to move back in negative territory in the coming months.
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.