MSE Weekly Round-Up Report: 19th — 23rd November 2007

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Strong response to MIH bond issue

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A bad week for the local bourse as eight of the ten active equities closed in negative territory. The MSE Index in fact declined by 0.7% to close at 4,845.69 points during a week which saw International Hotel Investments and Lombard Bank suffer the largest declines. On the other hand, the only equity to advance on a weekly basis was Medserv, while Maltacom shares closed unchanged from the previous week.

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A total of 249 deals were registered on the local bourse for a turnover just below Lm1.6 million. In the equity market, 139 deals were executed for a traded value of Lm233,094, while 101 transactions were performed in local corporate bonds and government stocks for a turnover close to Lm1.05 million. In addition, 9 deals were executed in Treasury Bills for a value of Lm314,239.

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In the banking sector, HSBC Bank Malta (HSBC), Bank of Valletta (BOV) and Lombard Bank registered share price losses. HSBC had 30,572 shares change hands across thirty-five deals to close at Lm1.965, this representing a 0.7% decline on the week. BOV traded 22,285 shares over fifty-three transactions to close 0.3% lower at Lm3.568, while Lombard shares ended 1.9% lower at the Lm5.10 level.

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On Monday, HSBC issued its interim director’s statement in which it was stated that it maintained good business growth, continuing the positive profit and loss balance sheet trends reported in the first half of 2007. It was also noted that customer’s deposits and customers’ loans increased strongly over the same period last year (as at 31st October 2007). The core income and profitability levels disclosed in the first half of 2007 were sustained while it was also reported that there was no deterioration in the quality of credit lending and liquidity and solvency indicators remained sound.

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Turning back to trading on the local stock exchange, Medserv was the sole positive equity performer on a week-on-week basis having gained 0.9% or 1c5 to close at Lm1.75. This was however attained across two mere trades which totalled 4,700 shares and with one of the transactions being executed at Lm1.78.

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International Hotel Investments registered the largest volume traded this week as 75,712 shares change hands across six deals. Its equity price however declined by 1.9% to close at EUR1.01 during a week in which, it also issued its interim director’s statements. It was stated that following the injection of new equity, IHI is now actively seeking the acquisition of other hotel properties which fit its strategy. Meanwhile, the refurbishment project at Corinthia Lisboa Hotel has also been completed on time and the main construction contract for the Corinthia Nevskij Palace Hotel project in St. Petersburg has been signed. Moreover, it was reported that overall the operational performance of the IHI Group 2007 remains on the forecasted targets which are an improvement over the results registered in 2006.

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Plaza Centres’ and Simonds Farsons Cisk shares were also traded and both closed in the red. Plaza had 1,600 shares transacted over two deals to close 1.4% lower Lm0.73, while Farsons’ shares dropped 0.9% or 1c to close at Lm1.11 on low activity. Moreover, Malta International Airport had 8,550 shares change hands across fourteen transactions to close marginally lower at Lm1.399, less than 0.1% lower over the previous week. GlobalCapital was amongst the negative performers on a weekly basis having shed 1c or 0.6% to end the week at Lm1.78.

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The only equity to trade and close unchanged was that of Maltacom in which nearly 20,000 shares were transacted over eighteen deals. Its shares were also traded at a weekly high of Lm1.37, before retreating to Lm1.34 and closing stable on a week-on-week basis.

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During the week, Grand Harbour Marina announced in its interim report that even though no material events and transactions have taken place that would have an impact on the financial position of the Company, the Company has not completed any berth sales during the first 10 months of the current financial year.

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With regard to trading in the bond market, the majority of the Malta Government Stocks which were traded registered price increases with the total turnover amounting to nearly Lm1 million. Meanwhile on Wednesday, the €15 million MIH bond issue public offering was oversubscribed within a few hours from opening.

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This article which was compiled by Jesmond Mizzi Financial Services Limited (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 please contact JFMS at 67/3 South Street Valletta or on tel:  21224410 or email [email protected]