The local stock market started the month with moderate losses which, coupled with those of the previous week, erased all this year's gains. The Malta Stock Exchange index was dragged lower in every session, ending the week 1.42% lower at 3,449.32. The index's performance over the past two weeks has thus plunged the index below the December 2009 closing level of 3,460.553.
The index's sudden boost in January was gnawed at slowly as months progressed, and following last week's performance, this has resulted in a year-to-date moderate loss of 0.32%.
The local stock exchange continues to show a certain disconnection or decoupling from the major economies' equity indices, most of which experienced a mixed fortnight, but fell sharply on Friday afternoon as US employment figures disappointed the market amid growing concerns over the state of the Hungarian economy. Rather than being disengagement, it might be more appropriate to speak of a lag effect, with last month's significant losses in most indices reaching our shores only now.
However, not all was doom and gloom. There were still pockets of positive performances in at least four equities of the 12 traded last week. But seven other equities provided a drag on the overall market, with losses in the largest capitalised company dampening the whole mood considerably. One equity remained unchanged.
Activity in the equity market picked up from 267,286 shares traded the previous week to 334,760 shares last week. However, this increase is hard to interpret, as not all the increase backed the lower prices. In fact, a good part of the increase in volume actually occurred in those equities that performed positively. Notwithstanding the falling index, the increased volume is not necessarily an indication of strong selling conviction.
One of the equities registering a much higher volume of trading was Maltapost plc, the price of which rose 3.3% to end the week back at €0.899. This is €0.001 shy of its all-time high price of €0.90 reached in Monday's session. The equity took the lion's share of the total volume of shares traded - a healthy 85,200 shares.
Last week, HSBC Bank Malta plc was the most traded stock, with 87,417 shares changing ownership over 61 deals spread out throughout the week. The equity provided the most negative bias for the week, suffering consistent losses every trading session. The price plunged 3.3% to end the week well below the €3 level, at €2.93. The year-to-date losses have worsened to 9.3% following last week's downfall.
Bank of Valletta plc's share price defied the negative mood to end the week in positive territory, thereby continuing to widen the year-to-date variance between the performances of the two leading banks. The share price rose to €3.30 - a 1.54% gain for the week. Interestingly, the gain was backed by a higher volume as a total of 67,501 shares were traded last week.
There was also higher volume of trading in Malta International Airport plc (MIA). In accordance with the resolutions approved at MIA's annual general meeting the nominal value of the company's authorised share capital was re-denominated from €0.50 to €0.25 per share, and accordingly its authorised share capital rose from 93,174,800 ordinary shares to 186,349,600 ordinary shares which came into effect last Tuesday. Based on this, the share price was adjusted to €1.575 during Thursday's session, marking a slight gain of 0.32% on Friday's to end the week at €1.58.
The slight gain in International Hotel Investments plc's share price the previous week was completely eroded as it returned to €0.82, the same price as two weeks ago. However, the volume backing the fall was just under half as much as that pushing the price higher the previous week.
Middlesea Insurance plc outperformed the overall index last week, edging 0.58% higher to close at €0.86. On the other hand, the fall in Go plc's share price has gathered momentum over the past month, with a further loss of 3.37% last week. The share price closed Friday's session at €2.01 as volume traded was unusually low for this stock with only 9,500 shares backing the downward move.
Four trades for a total of 6,675 shares in Fimbank plc executed on Monday led to a hefty 6.48% fall in price. No further trading occurred during the week with the share price therefore closing at $1.01. Similarly, low volume led to sharp volatility in the share price of Loqus Holdings plc, which saw a drop of 19.35% after a single trade of 2,548 shares.
Lombard Bank plc and Simonds Farsons Cisk plc registered losses of 1.88% and 2.7% respectively. However, volume traded in both equities was minimal. Medserv plc's share price remained unchanged at €4.30.
Last week, trading in local corporate bonds was slightly subdued. Value traded barely surpassed €500,000. Corporate bond prices remained generally unchanged, with some minor falls in five bonds. The bulk of trading occurred in the 4.8% BoV plc 2020 bond, which resulted in a 0.90% rise from €101.10 to €102.
Following weeks of turbulence and volatility in Malta Government Stock yields, most yields remained fairly unchanged last week. This was mostly a result of a lifting of the negativity affecting investments worldwide and possible return to risk-taking, although this seems to have receded on Friday afternoon. Volume of trading in MGS was also quite subdued with less than €500,000 being traded and prices remaining generally unchanged.
There was no trading in Treasury Bills.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Ltd (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed 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, on Tel. 2122 4410 or e-mail jmizzi@jmfs.net.