Another bad week for bank shares

This week the Malta Stock Exchange Index closed at 2863.007 points, a drop of 3.60% on the week. During the week, seven equities were negotiated, with one closing in positive territory, five closing in negative territory and one remaining stable.  Fimbank plc was the best performer of the week as its share price appreciated by 0.33% to $1.50 on a single trade of 1,260 shares.  On the other hand Bank of Valletta plc lost most ground as its share price dropped by 7.91% and closed at Eur2.247.

During the week 257 deals were registered on the stock exchange for a turnover of just under Eur7.59m.  In the equity market 130 transactions were carried out for a total value of Eur406,103.  In the corporate bond market 69 transactions for a total value of Eur572,096 were executed. While in the government bond market 40 transactions were executed for a value of over Eur1.65m.  Seventeen transactions were carried out in the Treasury Bills market for a value of over Eur4.94m.   

On Monday the Central Bank of Malta Stockbroker lowered most bid prices of the longer-term Malta Government Stocks.  A number of corporate bonds were traded with a mixed performance.  On Tuesday the Central Bank of Malta Stockbroker increased its Malta Government Stock bid prices as eurozone yields dropped to the 3.02% level as all traded government stocks gained ground.  Various corporate bonds were traded and gained ground. On Wednesday the Central Bank of Malta Stockbroker continued to lift its Malta Government Stock bid prices as eurozone yields continued to decline up to the 2.95% level. Trading activity was high with prices gaining ground.  As eurozone yields reached once again the 3.05% level, the Central Bank of Malta Stockbroker reduced its MGS.

During this week trading in the equity market was centered around the banking sector.  As stated above, over the week, the share price of Bank of Valletta plc (BOV) dropped by 7.91% and closed at Eur2.247.  One hundred and fourteen thousand two hundred fifty two shares were negotiated across 75 deals.  On Monday the share price of BOV dropped by 1.68% to Eur2.399 as 27,951 shares were negotiated across 25 deals. On Tuesday BOV lost most ground as its share price dropped by 4.13% to Eur2.30 as 12,325 shares were negotiated across 14 deals. On Wednesday it was the equity which shed most off the index as it dropped by 1.30% to Eur2.70 when 11,303 shares changed hands across 11 deals. On Friday BOV was the most traded equity of the day as 62,673 shares were negotiated across 25 deals.  This activity led to a drop of 1.01% in the share price which closed at Eur2.247.

Over the week HSBC Bank Malta plc (HSBC) lost 6.94% and closed at Eur2.28 as 38,467 shares were negotiated across 40 deals.  On Monday the share price of the Bank dropped by 0.04% to Eur2.449 as 5,600 shares were negotiated across seven deals.  On Tuesday HSBC lost most ground as it dropped by 2.00% to Eur2.40 when five trades were executed for a total volume of 4,842 shares. On Wednesday HSBC continued with the negative trend and its price dropped by 0.42% as 5,000 shares were negotiated across five deals. On Thursday HSBC saw its value drop by 1.67% to Eur2.35 as 12,145 shares were negotiated across 13 deals. On Friday HSBC continued to lose ground as its share price dropped by 2.98% to Eur2.28 when 10,880 shares were negotiated across ten deals.

On Friday the Board of Directors of HSBC has approved the Preliminary Statement of annual results for the financial year ended 31 December 2008.  For the year ended December,31, 2008 profit before tax stood at Eur96.1 million, down Eur18.6 million, or 16.2%, when compared with Eur114.6 million in 2007.The Board of Directors resolved to recommend that the Annual General Meeting to be held on 1 April 2009 approves the payment of a final ordinary dividend of Eur0.096 gross per share (Eur0.062 net per share) which will be paid on April, 20, 2009 to shareholders registered with the Company as March,4, 2009. 

This week the share price of Lombard Bank Malta plc (Lombard) dropped by 5.77% and closed at Eur2.45.  Seventeen thousand and eighty eight shares were negotiated across seven deals.  On Tuesday a single deal of 4,088 shares left the share price of Lombard stable at Eur2.60. On Thursday the equity lost most ground among those traded to reach a 37-month low as it dropped by 5.77% to Eur2.45 as 13,000 shares were negotiated across six deals.

Although Maltapost plc was not traded during this week, on Tuesday the Company held its Annual General Meeting during which shareholders approved final accounts as at September 2008 and a final net dividend of Eur0.04 per share.

On Thursday the share price of Middlesea Insurance plc dropped by 0.19% to Eur2.575 on a single deal of 160 shares.

In an interim statement published on February 19, 2009, Crimsonwing plc stated that due to the financial markets turmoil during the third quarter it has been dealing with difficult trading conditions and this challenge has continued in the final quarter of the financial year. Overall, and before exchange rate effects, the Crimsonwing business units will show a combined operational profit for the year of circa Eur100,000, and this includes an allowance for losses of around Eur400,000 at VDA (acquired in July 2008). All the business units (apart from VDA) are profitable, despite the difficult global economic conditions.

The further weakening of the UK Sterling against the Euro in Q4 has compounded the effect of the general economic downturn that could have a material impact on the Group’s profitability. Unless there is significant recovery in the exchange rate scenario over the remaining two months until the Group’s financial year-end it is likely that the Group will make a loss of circa Eur400,000 on exchange that will result in the year-end position of Crimsonwing plc reporting losses of around Eur300,000 overall.

Malta International Airport plc was traded on Friday and lost some ground as its share price dropped by 0.08% to Eur2.427 when 2,800 shares changed hands across five deals.

On Friday a single deal of 200 shares left the share price of Plaza Centres plc stable at Eur1.68.

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 contact JMFS at 67/3, South Street, Valletta or on Tel: 21224410 or email [email protected].