The local equity market closed in negative territory for the third successive session today.

Bank of Valletta shed a further 1.5% to drop back to the €3.30 level on volumes of just under 8,000 shares. HSBC Bank Malta plc also edged 0.3% lower to €3.04.

Today’s downturn in the equities of the two large banks is possibly in reaction to yesterday’s publication of the ‘Financial Stability Report 2009’ by the Central Bank of Malta. This report explained that local banks, despite being well capitalized and liquid, may have to further increase their capital in view of a possible increase in non-performing loans and more stringent regulatory requirements currently being discussed at the EU level. He also said the banks may have to rethink their dividend policies (see http://www.timesofmalta.com/articles/view/20100526/local/banks-may-need-to-reassess-their-dividend-policies-governor )

Moreover sentiment towards the banks may have been impacted by the EU proposals to introduce a levy on banks to create a fund to help prevent future bank bailouts.

Meanwhile Medserv plc regained its all-time high of €4.30 as 10,000 shares traded during this morning’s session. Recently the Medserv Group published its Interim Directors Statement explaining that the Group registered a slight decline in operations when compared to the same period last year as newly contracted exploratory engagements were delayed. However these works are now expected to commence in the third and fourth quarter of 2010.

Preferred applicants in the 6% Simonds Farsons Cisk plc Bonds have until tomorrow to submit their application. Meanwhile the general public offer of the 6.6% Eden Finance plc bonds opens next Monday 31 May.

More information is available on www.rizzofarrugia.com