This week the Malta Stock Exchange Index closed at 3,047.036 points, a drop of 3.01 per cent. During the week, seven equities were negotiated, with six closing in negative territory and one remaining stable.
Fimbank plc retained last week's price of $1.47 when on Wednesday, 11,300 shares were negotiated across four deals. Lombard Bank plc lost most ground as its share price dropped by 6.36 per cent and closed at €2.65.
During the week 239 deals were registered on the stock exchange for a turnover of over €6.3 million. In the equity market 98 transactions were carried out for a total value of €248,592. In the corporate bond market 87 transactions for a total value of €593,057 were executed, while in the government bond market 40 transactions were executed for a value of €588,066. Thirteen transactions were carried out in the Treasury Bills market for a value of over €4.9 million.
During this week Bank of Valletta plc (BOV) was the most active as 38,629 shares were negotiated across 45 deals for a total value of €98,866. The share price dropped by 3.85 per cent to €2.50. On Monday BOV issued a company announcement in relation to the performance of the bank from October 1, 2008 to date. The company stated that as communicated to shareholders in the annual report and during the annual general meeting of the bank, the first quarter of this financial year witnessed a continuing period of extreme nervousness and volatility in the international financial markets.
Markets have continued to re-price risk and to turn attention and concerns to the likely impact of the impending recession on the wider economy. As anticipated, BOV's Financial Markets portfolio has witnessed further unrealised fair value markdowns during the period under review. The company further stated that coordinated measures taken by Central Banks have included radical reductions in interest rates, in an attempt to counter the sharp downturn in economic activity being experienced on a global basis.
BOV has passed on much of this rate cut to its customers, and this will have an adverse effect on the profitability of the bank both because of the lag or delayed time effect on the re-pricing of term deposits, and also because continuing competition for deposits has resulted in a compression of the net interest rate margin.
On the corporate, retail and home loans sides of the business, there has, to date, been no evidence of any significant deterioration in credit quality, but a modest slowdown in the demand for credit, particularly on the home loans side, has been seen. Demand for investment and insurance products has remained subdued, although there has been something of an improvement since the turn of the year. Commission income on other banking services has shown a satisfactory increase over the corresponding period last year.
Costs remain under tight control, running at close to FY 2008 levels. Satisfactory growth in customer deposits has been sustained throughout the period under review.
The expectation remains that FY 2009 will be a very challenging year for the BOV group. The statement emphasised that the bank has continued with its conservative policies insofar as balance sheet management is concerned, and liquidity and capital ratios are being maintained at levels well in excess of prudential regulatory requirements.
During this week 24,561 HSBC Bank Malta plc shares were negotiated for a total value of €65,483. The share price dropped by 4.02 per cent to €2.601. On Monday the Board of Directors of HSBC Bank Malta plc announced that it is scheduled to meet on February 20, 2009, to consider and approve the group's and the bank's final audited accounts for the financial year ended December 31, 2008. It will also consider the declaration of a final dividend to be recommended to the bank's annual general meeting.
As already mentioned, Lombard Bank Malta plc lost most territory during this week. Ten deals were carried out for a total volume of 10,555 shares for a total value of €28,926.
During this week Go plc lost 5.46 per cent as its share price closed the week at €1.749. Seven deals were executed for a total volume of 14,530 shares and a total value of €25,639.
On Thursday International Hotel Investments plc saw its share price lose 1.38 per cent to €0.858 when 17,000 shares were negotiated across seven deals, making it the most active equity of the day. Then on Friday, the share price of International Hotel Investments plc dropped by 0.93 per cent to €0.85 on a single deal of 2,000 shares. For the week IHI dropped by 2.30 per cent as 19,000 shares were negotiated across eight deals.
On Thursday a single deal of just 400 shares led to a drop of 0.04 per cent in the share price of Malta International Airport plc, which closed at €2.499.
This article which was compiled by Jesmond Mizzi Financial Services Limited (JMFS) does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services by the MFSA. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact JMFS at 67/3, South Street, Valletta or on telephone 2122 4410 or e-mail jmizzi@jmfs.net.