At the end of trading in the holiday-shortened week the Malta Stock Exchange ended a significant 3.82% up on the week, 9% up over the month of December, and 9.27% up over the year, to close at 3,781.237 points.
A positive surge in share prices is typical at the end of the year; however, this was also backed by the generally positive sentiment the market has enjoyed towards the end of the year, with long rallies of positive daily and weekly performances.
Trading in the equity market was characterised by increased volatility following new procedures regarding the establishment of trade ranges came into force towards the end of July.
The new policies not only widened the trade ranges to 10% on the trade-weighted average price, but also revised the policies for the temporary lifting of trade ranges, allowing more flexibility and activity in a company’s shares. In fact, activity in the equity market increased by over 28% on the year, to a total of 8,757 deals.
This increased activity was dominated by Bank of Valletta plc (BoV). With over 3.3 million BoV shares changing hands it clearly outperformed the next most traded equity by over 400,000 shares.
BoV’s year-to-date performance was also impressive, with a 24.6% gain making it by far the best performing banking equity for the year. The positive sentiment surrounding this equity was no doubt boosted by the BoV Group’s strong financial results announced in mid-October, after which its share price soared.
Middlesea Insurance plc’s share price climbed 26.24% on the year. This equity’s performance spiralled downwards in the first half of the year, reaching a yearly low of €0.68 following the company’s poor results as at December 31, 2009, mainly due to the performance of its Italian subsidiary, Progress Assicurazioni SpA.
The de-recognition of its Italian subsidiary allowed the company to re-focus its strategy on local business. In fact, the company’s interim results returned to profit before tax for the first half of 2010 and from then on the equity’s share price started a steady upward trend.
Maltapost plc shares ended the year at its yearly high of €1, breaking its previous yearly threshold of €0.95 on its final day of trading this year. This represents a €0.30, or 42.86% climb in Maltapost’s share price since the beginning of the year.
Maltapost’s profit after tax for the six-month period ending March 31, 2010, also increased 3.5%. Volume traded in this equity was one of the highest reported in 2010, with a total of 2.68m shares exchanged.
Malta International Airport plc was among the best performers last year, as month after month the company declared record high passenger movements as well as a 16.5% increase in profit after tax for the first six months of 2010. The equity’s price was adjusted in June to reflect the company’s share split of 2:1.
The value of International Hotel Investments plc (IHI) shares rose by 18.13% this year, and due to IHI’s large capitalisation, this yearly increase was instrumental to the index’s overall positive performance.
The equity showed mixed trends throughout the year, sliding gradually after the company reported a loss for the first six months ending June 30, 2010. A surge in the equity’s share price occurred in mid-December following IHI’s announcement that it intends to issue new shares by way of a public offering on a major international stock exchange as soon as market conditions are right.
In the last week of trading, IHI shares surpassed the highest level previously reached – €0.90 – to end at a yearly high of €0.945. A significant volume of 2.12m IHI shares were traded throughout the year.
HSBC Bank Malta plc shares registered a mild increase of 0.77% last year. The share price only managed a gain in the final trading session of the year, closing at €3.255. All previous trading last week closed below 2009’s closing price of €3.23.
HSBC’s share price fluctuated between a high of €4.05 and a low of €2.75 throughout the year, opening at the high level and gradually declining, only to pick up steam towards the end of the year as the bank approaches the end of its financial period and investors await the announcement of the bank’s results, which is expected in early 2011. This equity ranks fourth in terms of trading volume, with 2.64 million shares traded.
A steep 178% increase, or €0.128, was registered in Loqus Holdings plc’s share price as the equity ended the year at €0.20. However, trading in this equity remained sporadic throughout the year, touching a high of €0.32 which, however, was not maintained; total volume traded reached almost 45,500 shares.
It was a happy ending for Global Capital plc shares as this equity traded between a widely spread range throughout the year to finally close at €1.50. This was also the case for Plaza Centres plc, which ended the year at €1.69, recovering from a yearly low mid-year level of €1.516.
Two banking equities, namely Lombard Bank plc and Fimbank plc were among the most negative performers in 2010. Lombard shares shed €0.19 to end the year at €2.80, while Fimbank’s share price fell by a steep 13.64% to close at $0.95. Fimbank was the runner-up in terms of volume traded, with 2.95 million shares changing hands.
Go plc’s share price fell by a significant 7.8% last year. This decline occurred gradually after the first quarter of the year, picking up momentum when the equity went ex-div in April.
In the company’s interim results for the period ended June 30, 2010, the group reported an operating profit of €11.24m, compared to a €0.25m loss in 2009. This notwithstanding, the group suffered a loss before tax of €0.65m after taking into consideration finance costs and the Go’s investment in Forgendo Ltd.
Losses were reported by the lower capitalised equities, with 6PM plc topping the list with a 20.9% decline.
There was a noticeable increase in activity in the fixed income market throughout 2010 both in the primary as well as the secondary market. With the introduction of various new issues and the roll-over of various maturing bonds all being fully subscribed, and most often being oversubscribed.
This was also the case in the last issue of Malta Government Stocks for 2010, where applications for the 5.25% stock maturing in 2030 were scaled down due to heavy demand.
There was also an increase in activity and value traded on the secondary market both in corporate bonds and government stocks. On the other hand, interest in Treasury Bills was on the decline as yields remained low throughout the year.
I wish readers a prosperous 2011.
This article, which was compiled by Jesmond Mizzi, joint managing director of Atlas JMFS Investment Services Ltd, does not intend to give investment advice and the contents therein should not be construed as such. Atlas JMFS is licensed to conduct investment services by the MFSA and is a member firm of the Malta Stock Exchange. 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 Atlas JMFS at 67/3, South Street, Valletta, or on Tel: 2122 4410 or e-mail jesmond.mizzi@atlasjmfs.com.