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HSBC records drop in short-term profits

Stays in line with long-term strategy

The MSE Equity Total Return Index surrendered the previous week’s gain having declined by 1.43 per cent last week, closing at 8,605.25 points.

In the equity market, a total of 16 securities were active, of which gainers and fallers amounted to six. Investment activity declined significantly, as a turnover of €1.4 million was generated over 234 deals.

On Monday, HSBC Bank Malta plc published its interim results for the first six months of 2018, reporting a profit before tax of €16.2 million. This translates to a decline of 38 per cent, or €9.8 million over the corresponding period last year.

This downturn in profits was somewhat expected, as it was the result of a strategy focused on mitigating risks and overhauling the bank’s compliance function. This profit figure was also impacted by the continuing low interest rate environment.

The implementation of these de-risking actions is now nearing completion, and thus, the bank is now transitioning into a new phase of its long-term strategy, shifting its main focus to growth and value creation by enhancing return on equity.

The equity traded heavily throughout the week as 179,885 shares changed hands across 45 trades. The share price temporarily posted a loss following the announcement, but eventually bounced back to recapture the €1.89 price level, thus closing the week unchanged.

Its peer, Bank of Valletta plc was once again dominated by selling pressure, as it extended its negative streak to four straight weeks. Last week, the share price drifted 3.75 per cent to €1.54. The equity was the most liquid as 288,228 shares changed ownership across 100 deals.

Also, in the banking industry, FIMBank plc was up by 0.93 per cent to €0.545, as four deals of 25,981 shares were struck.

In the telecommunications sector, GO plc published its interim financial results for the first six months of 2018. The group registered an improved performance when compared to the corresponding period last year, as indicated by the significant 13.2 per cent increase in profit before tax which reached €15.3million.

Revenue was up by 4.1 per cent to €84.3 million, also resulting in a slight increase in EBITDA.

One of the main drivers of retail revenue growth was a larger mobile customer base as well as growth in usage of mobile data. This growth was in line with the group’s strategy of growing its telecommunications business in Malta and Cyprus, in spite of the intense competition in the telecommunications industry.

On Wednesday, Malta International Airport plc published its traffic results for July 2018. Unsurprisingly, the results were very positive, setting a new monthly traffic record of 756,356 passengers during the month.

This figure translates to an increase of 12.1 per cent over the same month of the previous year.

This positive performance was observed in parallel with an 11.3 per cent increase in aircraft movements, an 11.5 per cent rise in seat capacity, and a seat load factor of 87.1 per cent.

While four of the top markets registered growth that ranged between 14.4 per cent and 34.3 per cent, Germany’s passenger movements decreased by 4.3 per cent. This decrease resulted from a reduced schedule by TUI cruises, affecting the cruise and fly passenger traffic throughput.

During the week, the equity was down 0.88 per cent to€5.65, as 10,553 shares traded over 10 deals.

International Hotel Investments plc was the worst performer, as it sank a sizeable 7.69 per cent, to close at €0.60. Trading volume amounted to 27,157 shares over six deals.

In the insurance industry, the gain registered by Mapfre Middlesea plc during the previous week’s trading proved unsustainable, as the equity surrendered 2 per cent in value, to return to the €1.96 level. A total of just three transactions were recorded, in which 9,278 shares were exchanged.

Retail conglomerate PG plc advanced 1.49 per cent in value, to close at €1.36, as a substantial 115,400 shares changed ownership over 11 trades.

Bank of Valletta plc again dominated by selling pressure

On Monday, Malta Properties Company plc provided an update with regards to the promise of sale agreement between its wholly owned subsidiary, SLM Property Company Limited as seller, and Toncam Properties Limited as buyer, for the property known as the Sliema Old Exchange.

The final deed of sale has now been officially executed between the two parties for a consideration of €5m, of which €500,000 was paid upon the execution of the promise of sale agreement, and €4.5m paid upon the final deed of sale. The proceeds from this sale are expected to go towards funding MPC’s development projects or any acquisition opportunities.

The equity was up 1.96 per cent, to close at €0.52, as a result of eight transactions of a combined 28,289 shares.

Main Street Complex plc announced that its board of directors is scheduled to meet on August 24, 2018, to approve the interim financial statements for the six month period ended June 30, 2018.

The board of directors of RS2 Software plc is set to meet on August 28 to approve the interim financial statements for the first half of 2018. Contrasting performances late during the week were registered, with the share price ultimately closing unchanged at €1.19.

Medserv plc traded seven times as 31,500 shares were negotiated. The result was a 0.91 per cent gain in price.

In the property sector, Plaza Centres plc recorded two trades of 15,475 shares during the week. The share price ended the week at €1.02, translating to a negative change in price of 1.92 per cent.

MIDI plc set a new all-time high of €0.494, which 2.92 per cent higher than last week’s closing. The equity traded heavily as 291,500 shares were exchanged over 11 deals.

During a board meeting held last Friday, the board of Directors of Malita Investments plc approved the Company’s condensed interim financial statements for the six months ended June 30. Profit before tax decreased year-on-year from €9.69 million in 2017 to €6.52 million in 2018. Profit after tax increased substantially from €1.68 million in 2017 to €5.50 million in 2018, mainly due to the substantial deferred tax during the same period in 2017.

The directors of the company have approved the payment of an interim net dividend of €1,270,767 or €0.00858 per share. The interim dividend will be paid on September 7, 2018 to the Shareholders on the Company’s share register at close of business at the Malta Stock Exchange on August 23, 2018.

In total, three transactions of 39,200 shares were executed last week, dragging the price down by 1.69 per cent to €0.87.

Tigne Mall plc posted a significant gain in value of 2.11 per cent ahead of its dividend cut-off date on Tuesday, August 14. The share price closed at €0.97 as 17,000 shares changed hands across a couple of deals.

It was a positive week for the local sovereign debt market, as out of the 23 active issues, 18 posted gains.

The largest gains were recorded by the longest-dated securities, particularly the 2.4% MGS 2041(I), which registered a positive movement of 1.27%, to close the week at €105.93.

The worst performer was the 1.5% MGS 2027 (I), which was down 0.94% to €102.53, as a result of a single trade of 3,000 shares. The local corporate debt market posted rather mixed performances, as out of 40 active issues, 19 traded higher while 12 lost ground.

The top performer was the 5.5% Pendergardens Developments plc Secured € 2020 Series I, as it appreciated by 3.27% to €105.85. On the other hand, the 4.5% Medserv plc Unsecured € 2026 fully erased two weeks’ gain, as it drifted 2.44 per cent to trade at par.

http://www.jesmondmizzi.com/

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