MSE index falls by 1.33% in November

This week the Malta Stock Exchange Index closed at 3,317.114 points, at a loss of 0.58% over last week.  In November the MSE index fell by 1.33% and since the beginning of the year the Index has now lost 32.82%.  During the week, twelve equities were negotiated, with six equities closing in negative territory, five closing in positive territory and one remaining stable. Shares of Datatrak Holdings plc lost most territory as its share price dropped by 35.16% whilst Grand Harbour Marina plc gained most territory with an appreciation of 2.78% and closing at Eur1.85.

A total of two hundred forty six deals were registered on the stock exchange for a turnover of over Eur5.1 million.  In the equity market one hundred thirty eight transactions were carried out for a total value of Eur478,111.  In the corporate bond market fifty-one transactions for a total value of Eur231,052 were executed. Whilst in the government bond market forty-three transactions were executed for a value over Eur2.4 million.  Fourteen transactions were carried out in the Treasury Bills market for a value of over Eur1.9 million. 

The two large banks remain the most active equities on the stock exchange.  Bank of Valletta plc saw its share price increase by 0.56% to Eur3.62 as 36,715 shares changed hands across forty-two deals.  Shareholders of Bank of Valletta will be asked to approve a final dividend of Eur0.0675 per share and a 1 for 5 bonus share issue, for which shareholders on the Bank’s register on the 12th January 2009 will be eligible, during the Annual General Meeting due to be held on the 17th December 2008.  HSBC Bank Malta plc, on the contrary, saw its share price drop by 1.03% to Eur2.89 as 60,221 shares changed hands across forty-one deals.

The share price of Lombard Bank Malta plc increased by 0.07% to Eur2.95 when 2,699 shares were negotiated across two deals.  Meanwhile the share price of FIMBank plc dropped by 0.43% to $1.394 as 47,849 shares changed hands across nine transactions.

On Tuesday the share price of MaltaPost plc dropped by 6.70% to Eur0.70 on a single deal of 2,000 shares.  However this drop was recovered on Wednesday when its share price climbed to the limit of Eur0.749.  This resulted as 6,089 shares were negotiated across six deals.  By the end of the week the share price of MaltaPost plc appreciated by 1.33% to Eur0.76 as a total of 22,398 shares were negotiated across ten deals.  As mentioned earlier the share price of Datatrak plc fell 35.16% to an all-time low of Eur0.201.  This was the result of a single transaction carried out on Tuesday during which 1,000 shares were negotiated. 

On Wednesday Crimsonwing plc published its Interim Results for the six months ended 30 September 2008. The Group’s turnover during the first half of the year increased by 45.5% to €6.3 million but the Company’s after tax profits declined from €442,201 to a loss of €58,677.  No trades has been executed in the Equity since the 5th November 2008.

As mentioned earlier the share price of Grand Harbour Marina plc increased by 2.78%.  This was the result of a single deal of 249 shares carried out on Thursday.

On Thursday, 6pm Holdings plc issued an Interim Directors’ Statement whereby it was stated that following the Company’s Half-Yearly Report in August 2008, where it was suggested that the promised 1st half year performance may persist for the remainder of the year, as anticipated, they increased the order book substantially, particularly in relation to Public Sector activities.

However 6pm has been affected by the current conditions in the UK economy which are leading to the postponement of work starting.  Although in the remaining weeks to the end of this financial year, a few of these orders could still come to fruition, if these are also postponed 6pm will commence this work in the first 3 months of 2009 and move into next financial year with its strongest order book yet.  However the Company has been negatively affected by the rate of exchange between the euro and GPB as well as escalating logistics costs.  The Company is therefore taking appropriate measures to limit the impact on its profitability.

These include the redistribution of work delivered from the UK and Malta and the optimisation of resources.  The company continues to build upon its strategy of vertical alignment and the creation of specialism. In the current recession the board of directors is confident that this strategy will be essential for client growth, the achievement of economies of scale in delivery and will allow 6pm to maintain premium sales rates to protect its revenues and margins. 

On Friday, Simonds Farsons CIsk plc issued an Interim Directors’ Statement where it was stated that during the first nine months of the current financial year, the Group registered increased turnover levels over the corresponding period last year in its brewing, production and sale of branded beers and beverages segment, in its food importation business and the operation of franchised food retailing establishments. Moreover, the initial efficiency problems encountered with the newly commissioned production lines are being addressed, and the targeted production efficiencies are expected to be attained by the beginning of next year.

The substantial reduction in sales value per litre of carbonated soft drinks continues to have a negative impact on the profitability of this segment.

Although the Company continues with the implementation of a permanent cost reduction programme, with the targeted reductions in head count and overheads being attained as planned, the expense related to early retirement schemes will, have a negative effect on the results of the Company for the current financial year, together with the impact of the recently announced utility rates.

The Directors expect that the Group’s results for the current financial year will show a material decline in profitability over those for the year ended January 2008. Still, the Directors believe that the Company, through the measures being undertaken, remains well positioned to handle the challenges ahead.

During this week Middlesea Insurance plc experienced a drop of 5.45% in its share price which closed at Eur2.55.  This came as the result of two trades for a total volume of 2,000 shares.  Malta International Airport plc was another negative performer with a drop of 0.44% in its share price which closed at Eur2.24. A total of 13,900 shares were negotiated across five transactions.

The share price of International Hotel Investments plc dropped by 1.10%% to Eur0.90, following the issue of a Company’s Interim Directors’ Statement on the 14th November where it was stated that IHI expects the overall results for the second half of the year to be adversely affected by lower room rates and levels of occupancy.  A total of 20,252 shares were negotiated across eleven deals.

The share price of GO plc appreciated by 0.05% to Eur1.90 as 8,536 shares were negotiated across eleven deals.  Meanwhile the share price of RS2 Software plc remained stable at Eur0.75 as 30,000 shares were traded across three deals.

This article which was complied 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 JMFS at 67/3, South Street, Valletta or on Tel: 21224410 or email [email protected].