US stocks rallied on Friday after comments by Federal Reserve chairman Ben Bernanke that economic activity appeared "to be levelling out both in the US and abroad". US indices reached new highs this year to date, with the Nasdaq Composite now up 28%, the Standard and Poor's 500 up 13.6%, and the Dow Jones Industrial Average up 8.3%.
In the UK, the FTSE 100 gained nearly three per cent last week and is now at a 10-month high, with a year-to-date positive performance of just under 10%. The index has registered a 14 per cent gain since June 30, its best summer rally in 25 years.
Equities in Europe also had a good week as positive economic data helped European indices to return to a 10-month high as the FTSE Eurofirst 300 index gained 2.6% last week.
The weekly trend of the Malta Stock Exchange (MSE) index was mainly flat last week, following up-and-down oscillations that practically nullified each other. The few investors who entered the market lacked direction, with buyers and sellers at a stalemate position.
The index lost a trivial 0.07%, ending the week at 3,063.503 points. However, this was the MSE's lowest point of the week after having risen slightly to 3,078.462 on Wednesday.
Volumes traded in the equity markets were still very typical of this holiday period, with only 123,005 shares changing ownership. Price movements of the eight equities traded were also very limited barring RS2 Software shares, which saw their value plunge 7.69%. The other seven equities experienced little or no change in their closing prices.
HSBC Bank Malta plc was the most traded equity of the week, with the volume of shares exchanged double that of last week. The equity's undulating share price influenced the overall index, which otherwise would have remained practically unchanged.
The bulk of trading in HSBC shares occurred on Friday with the equity closing the week's trading down an insignificant €0.001 or 0.04%. Throughout the week the price fluctuated between a high of €2.71 on Wednesday and a low of €2.67 at which it ultimately closed. Just over 41,000 HSBC shares were exchanged over 29 deals.
By contrast, Bank of Valletta plc's share price remained totally flat throughout the week. The equity was traded in every session with nearly half of the volume traded occurring on Monday. The share price remained constant at €2.90 with 21,510 shares changing hands in 22 deals, although the highest traded price of the week was €2.97.
This week saw a much higher-than-normal volume of Lombard Bank plc shares being traded on the MSE. A total of 17,231 shares were exchanged in four deals in two trading sessions. Such quantities of the bank's shares have never been traded over the past four months. However, the price remained unchanged at €2.55.
The best performer of the week was Medserv plc which saw its share price climb 1.29% to return to its early June level. 10,000 shares were traded in five deals, pushing the price up to €3.545. However, being a very small market player this failed to have any influence whatsoever on the overall performance of the MSE index.
At the other end, RS2 Software plc shares sustained its downward trend, losing 7.69% in value during last week's trading, to close at €0.60. The equity has lost market value on a continuous basis this year, failing to recover at any time during the past eight months. Its market value has deteriorated by 25% since the beginning of the year.
The company announced that the board of directors had approved the half-yearly financial statements for the six-month period up to June 30 at the meeting held this week. The group registered a decline of over €2.15 million in its profit after tax in the first half of 2009, falling from €2.35 million in 2008 to €0.20 this year. Earnings per share for the period decreased from €0.072 to €0.005. No interim dividend is being recommended.
Go plc, Malta International Airport plc and Maltapost plc share prices were static last week. Trading was sporadic with the volume of shares exchanged being very light.
6PM Holdings plc and Go plc announced last week that their respective board of directors are scheduled to meet on Tuesday and on August 31 respectively to discuss the companies' half-yearly financial statements for the first half of the year.
Middlesea Insurance plc announced that its board of directors will issue the company's interim financial statements for the six months ending June 30, following a board meeting due to be held on Tuesday. The company also issued a profit warning, saying "the very difficult trading conditions experienced by Middlesea's Italian subsidiary, Progress Assicurazioni SpA, referred to in the 2008 annual report, have persisted and will have a material adverse impact on the half-yearly results".
Long-dated Government stock prices saw a further improvement during last week's trading, mirroring the European benchmark counterparts. Price gains were reaped across the whole range of Government stocks traded, yet as is often the case, long-dated bonds are much more susceptible and volatile to any change in movements in yields. The 7.8% MGS 2018 was up 1.09%. Volumes traded were also much higher compared to the previous week, with nearly €5.9 million woth of stock being traded in 53 deals.
The volume of trading was also up in the Corporate bond market, though prices were generally unchanged.
Trading in the Treasury Bills market amounted to €3.7 million.
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 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, call 2122 4410 or e-mail jmizzi@jmfs.net.