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MSE Equity Price Index enters correction territory

Four consecutive days of losses

The MSE Equity Price Index moved lower for the fourth consecutive day as it slipped by a further 0.91% to a fresh 32-month low of 4,256.120 points, reflecting the drops in the share price of five large caps whilst only Malita and GlobalCapital performed positively. With today’s drop, the local equity index has now entered “correction” territory – meaning a decline of more than 10% lower from the previous high of 4,763.682 points recorded on 3 March 2017.

RS2 Software plc tumbled 5.9% to the €1.27 level across 26,582 shares. On Wednesday, RS2 reported a net profit of €0.61 million for the financial year ended 31 December 2017 which is almost 36% higher than the previous comparable period. The Directors are recommending the payment of a net dividend of €0.0146 per share to shareholders as at close of trading on 16 May 2018. The company explained that it has intensified its efforts on expanding its client base. In fact, it secured strategic deals for its managed services which will secure substantial revenue for the Group once the customers move into production.

Bank of Valletta plc closed 1.7% lower at the €1.71 level after partially recovering from a new 2018 low of €1.70. A total of 68,202 shares changed hands. The bank is due to hold its Annual General Meeting on 10 May 2018.

Malta International Airport plc moved back to the €4.86 level (-0.8%) on three deals totalling 8,800 shares. The company is due to hold its AGM on 8 May 2018.

GO plc (700 shares) and HSBC Bank Malta plc (17,880 shares) both lost 0.6% to €3.44 and €1.72 respectively. GO’s AGM will be held on 14 May 2018.

Malita Investments plc added 1.2% to regain the €0.83 level across 25,000 shares. The company held its AGM today. The net dividend of €0.01853 per share will now be paid on 4 May 2018.

A single deal of 6,300 shares lifted the equity of GlobalCapital plc 10% higher to the €0.33 level. Yesterday, GlobalCapital reported a pre-tax profit of €4.64 million compared to €2.78 million in 2016. The increase in profitability was mainly driven by the performance of the life insurance business which continued registering growth across all lines of business. Meanwhile, the Statement of Financial Position shows that total equity of company increased to €18.2 million as at the end of 2017. This translates into a net asset value per share of €0.6083. In their commentary, the Directors made reference to the company’s application for a €6 million rights issue which, in turn, is mainly directed at supporting the business strategy of GlobalCapital.

Low trading activity also took place in the equity of PG plc which maintained its 2018 low of €1.30 across 3,800 shares.

FIMBank plc (20,000 shares) and Malta Properties Company plc (50,000 shares) maintained the USD0.53 and €0.47 levels respectively. On Wednesday, FIMBank announced the result of the recent USD115 million rights issue. The total amount of subscriptions amounted to USD99.06 million, representing an 85.9% take-up. Excluding the participation of the three major shareholders, shareholders from the general public subscribed for only USD2.5 million. Trading in the new shares is expected to be possible as from next Wednesday 2 May 2018.

Today, Tigne’ Mall plc publish the financial statements for the year ended 31 December 2017. The company reported a net profit of €2.32 million which is 13.3% higher than that of the previous comparable period, reflecting higher rental income on the back of full occupancy and stronger customer footfall. The Directors are recommending the payment of a final net dividend of €0.0128 per share (+2.4%) which is payable on 18 July 2018 subject to shareholders’ approval during the AGM scheduled to be held on 25 June 2018. The equity remained inactive today.

The RF MGS Index extended yesterday’s gains as it surged by 0.2% to 1,116.086 points. Bond yields in the euro area remained under downward pressure after the European Central Bank (“ECB”) yesterday kept its monetary policy unchanged and promised to maintain interest rates at their current record low. Moreover, the ECB today published a report showing that inflation within the single currency area is expected to continue trailing its target of just under 2% until this finally reaches 1.9% in 2022. On the economic front, data pointed to a slowdown in economic growth in France and Spain. On the other hand, however, the unemployment rate in Germany held at its all-time low of 5.3% whilst indices gauging the level of consumer confidence and industrial sentiment across the euro area exceeded expectations.

This article is provided by Rizzo, Farrugia & Co. stockbrokers

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