The recent rally on the local market took a breather during yesterday's trading session, as profit-taking activity in HSBC Bank Malta brought a 1.2 per cent decline to the Index which terminated at the 3,173 mark.
HSBC Bank Malta was the day's worse performer as investors sold shares in the largest listed company to collect profits from the recent rally. The day's activity consisted of 12,272 shares which were exchanged across 13 transactions. The equity however nose-dived in the final trade of the day as a residual balance was dumped at €2.86 which represents a 13c9 or 4.6 per cent discount to Wednesday's closing level. The bank will be reporting its interim results today.
On the contrary, the rest of the banking sector closed the day higher on continued purchasing activity.
Bank of Valletta was the day's most liquid and actively traded equity with a grand total of 13,120 shares, carrying a market consideration of €38,146, changing hands across 24 transactions. The equity closed the day higher by 4c at €2.94.
Activity in FIMBank consisted of 6,550 shares which were purchased across six transactions thereby pushing the price up to the €1.29 level, while Lombard Bank Malta recovered almost all of its previous session's declines as 890 shares were purchased at the €2.59 level.
Elsewhere in the market, single trades were effected in Middlesea Insurance, International Hotel Investments and Maltapost with the former two retaining their previous prices of €0.899 and €1.75 while the latter declined slightly to terminate at €0.70.
In the fixed interest sector of the market, activity was spread across eight corporate bonds and five government stocks. The segment's top performer was the seven per cent Gap Developments 2011/13 which recouped 150 ticks as 20,000 nominal were exchanged at €92.00.
Today, the Treasury Department will be announcing the prices and corresponding yields of the fungible tranches of the 3.60 per cent MGS 2013 (IV) and five per cent MGS 2021 (I) which will be issued to the public from Wednesday, August 5.
Weekly UK economic review
Last week's centrepiece of information emanating from the UK was the second quarter Gross Domestic Product which revealed that the recession deepened further during the three-month period.
Economic activity fell by 0.8 per cent quarter on quarter which, though not as bad as the 2.4 per cent decline seen in the first quarter, was still more than twice the 0.3 per cent fall expected by city analysts. The year on year rate of contraction reached a new record of -5.6 per cent, the largest annual decline since records began in 1955. From a sector perspective, construction was the standout, with another sharp drop in output (-14.7 per cent year-on-year), even worse than manufacturing (-12.7 per cent).
So far in this recession, the UK economy has shrunk by 5.7 per cent, within striking distance of the six per cent fall seen in early 1980s. On the other hand, there was further positive data coming out of the housing sector. The number of mortgage approvals for house purchases rose again, to over 35,000, according to the British Bankers Association (BBA). This is the highest number since March 2008.
New mortgage lending also ticked up slightly. Meanwhile, house prices increased for a third month in July based on the Nationwide Building Society survey. The average cost of a home climbed 1.3 per cent to GBP158,871, above the 0.2 per cent increase predicted by economists and the one per cent rise registered in June.
Elsewhere, the headline retail sales data was stronger than expected with a 1.2 per cent increase for June. This came after a revised 0.9 per cent decline the previous month as sales were boosted by favourable weather conditions and discounting.
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.