MSE Trading Report for week ending August 21, 2009

Global economic downturn impacts RS2 profits

The Malta Stock Exchange Index retreated a marginal 0.07 per cent this week, closing at 3,063.503 points. Most equities remained unchanged this week, as eight equities were traded, with five remaining unchanged, two closing in negative territory, and one closing in positive territory.

Due to HSBC’s high market capitalisation, the index trailed HSBC’s gains and losses during the week. The increases in the value of the index of 0.344 per cent and 0.358 per cent registered on Monday and Wednesday respectively were not sufficient to maintain the index up on the week. The highest loss of the week was registered on Thursday, with the index falling 0.367 per cent.

A total of 222 deals were registered over the week with a turnover of over EUR 11.72m. In the equity market 81 transactions were executed for a total value of EUR 288,226, while in the government bond market 53 transactions were registered for a value traded of over EUR 5.88m. A total of 75 deals were registered in the corporate bond market for a value of over EUR 1.85m. In the treasury bills market a total of 13 transactions were registered for a total value of over EUR 3.69m.

Bank of Valletta plc (BOV) remained unchanged throughout the week as the equity registered 22 deals of 21,510 shares. Although the share price remained unchanged week on week, the equity traded at a high of EUR 2.97 and a low of EUR 2.90 at which it closed the week.

The decrease in the share price of HSBC Bank Malta plc (HSBC) of 0.37 per cent registered yesterday had a marginal negative impact on the week-on-week performance. The equity which closed the week at EUR 2.67 lost 0.04 per cent on a volume of 41,433 shares across 29 deals. HSBC traded at a low of EUR 2.65 and a high of EUR 2.71.

Lombard Bank plc traded on Tuesday and Wednesday, as the equity remained unchanged, closing the week at EUR 2.55, with 17,231 shares changing hands on four deals.

GO plc remained unchanged this week, trading only on Wednesday as the equity closed the week at EUR 1.80, as 5,500 shares changed hands over three deals. During the week, the Company announced that the Board of Directors is scheduled to meet on August 31, 2009, to discuss the Company’s Half-Yearly Financial Statements for the period ending June 30, 2009.

The share price of RS2 Software plc depreciated by 7.69 per cent on the week, closing at EUR 0.60, EUR 0.05 lower than last week’s closing share price. The equity’s share price decreased on Tuesday by 4.62 per cent and by 3.23 per cent on Thursday, registering six deals of 14,973 shares. On Wednesday, the Group announced that, the Board of Directors approved the Half-Yearly Financial Statements for the period ended June 30, 2009.

The Group registered a decline of over EUR 2.15 million in its Profit after tax in the first half of 2009, from EUR 2.35 million in 2008 to EUR 200,829 in 2009. The Group stated that “since the revenue mix has a significant impact on profit margins, the reduction of licence and service fees recognised during the period is a direct contributor to the decline in profit for the period.” Revenue for the first six months of 2009 decreased by 49.62%, to EUR 2.68 million. The Group said that “this reduction is a direct result of the timing and nature of the contracts achieved during the two periods, involving different accounting treatment. The statement added that “as previously anticipated in light of the international economic conditions, the Group is experiencing a slow down in requests for services from its current customers.” Earnings per share for the period decreased from EUR 0.072 to EUR 0.005. The Group also announced that no interim dividend is being recommended.

Medserv plc was the only equity to register a rise in its share price, increasing by EUR 0.045. Medserv closed the week at EUR 3.545, appreciating by 1.29 per cent, with 10,000 shares changing hands on five deals.

Both MaltaPost plc and Malta International Airport plc were the other equities to close the week unchanged at EUR 0.69 (7,558 shares on seven deals) and EUR 2.35 (4,800 shares on five deals) respectively.

6PM Holdings plc and Middlesea Insurance plc (MSI) this week announced that the Board of Directors are scheduled to meet on August 25, 2009,  to consider and if thought fit, approve their Half Yearly Financial Report for the period ended June 30, 2009.

In the same announcement, MSI stated that “the very difficult trading conditions experienced by Middlesea’s Italian subsidiary, Progress Assicurazioni S.p.A., referred to in the 2008 Annual Report and in the Company Announcement issued on May 15, 2009, have persisted, and will have a material adverse impact on the half yearly results.”

This article which was compiled by Jesmond Mizzi, Managing Directors of 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].