Index dips as HSBC share price falls by 14%

February 26, 2010

MSE Trading Report for week ending February 26, 2010

The Malta Stock Exchange Index edged 5.65 per cent lower this week having closed the week at 3,620.153 points. Following three negative trading sessions, the Index closed in decline, dragged down primarily by the two major banks. Trading volume throughout the week was the lowest since the beginning of the year, as activity was mainly concentrated in the large capitalised equities. Negative sentiment in the equity market propelled risk averse investors to opt for safer government securities. As activity increased, the majority of active bonds ended in positive territory. Eleven equities were active, as two registered gains, three closed in decline and the remaining six closed the week unchanged.

The total amount of transactions on the local exchange declined slightly to 300 with a total turnover of Eur17.5m up from Eur6.6m recorded last week. In the equity market, 181 deals were executed for a total value of Eur508,571 while in the Corporate Bonds market 61 transactions of Eur356,203 were executed. Fifty-five deals in the Government Bonds Market were effected for a total value of Eur13.6m up from last week’s Eur868,364. Three transactions of over Eur3.08m in the Treasury Bills market were executed.

This week proved to be a negative week for financial equities, as on Monday, after the closure of the trading session HSBC Bank Malta plc announced its annual results for the year ended December 31, 2009, which showed a decline in profit before tax of 25.9 per cent. Following the Bank’s announcement, the equity recorded three negative sessions, during which it lost Eur0.57, while closed yesterday’s session at Eur3.30, hence recording a hefty loss of 14.46 per cent on the week. HSBC was this week’s most active equity as 92 deals of 76,488 shares were executed, with the highest volume concentrated in the last three trading sessions. Despite this sharp decline, year-to-date, the equity is still up at 2.17 per cent.

Bank of Valletta plc followed the negative trend, having registered losses during the initial four sessions, while recovering some of these losses yesterday. On the week, the equity edged 3.80 per cent in the red, having traded at a high of Eur3.498 and a low of Eur3.30, while closing the week at Eur3.365. Activity in this equity declined for the third week running as 50 deals of 41,488 shares were traded, down from over 70,000 shares negotiated last week. Year-to-date the equity is now outperforming HSBC as it is up 8.69 per cent.

Meanwhile, International Hotel Investments plc managed to regain all of last week’s losses, as the equity closed 2.56 per cent up at Eur0.80. In fact, IHI was this week’s best performer, having gained 0.77 per cent and 1.78 per cent on two sessions. The total number of shares traded amounted to 8,860 shares across five deals.

The other equity which managed a gain this week was GO plc which closed up 0.39 per cent or Eur0.009. Similar to last week, the equity was only active during three sessions, however, the number of transactions almost doubled during the week, while liquidity increased to 14,300 shares from last week’s yearly low of 11,200. The equity traded at a weekly low of Eur2.29 and a high of Eur2.30, while yesterday the quadruple operator closed the trading week at Eur2.299.

Meanwhile, MaltaPost plc closed the week at Eur0.759 down from last week’s Eur0.775 hence, a loss of 2.06 per cent on the week. The equity was active during three trading sessions, all of which closed in decline, and transactions for the week amounted to five deals of 33,700 shares, down from over 190,000 shares traded last week.

FIMBank plc was active only during the mid-week session as 3,450 shares changed hands across two deals. The equity closed unchanged at USD1.18 for the second consecutive week; however one transaction was satisfied at the weekly low of USD1.175.On the year the equity is 7.27 per cent up.

Similarly, Lombard Bank plc closed flat at Eur3.09, as 4,200 shares were traded on three deals. The equity was again active during one session, during which it traded at a low of Eur3.00 with the equity’s year-to-date performance standing at a positive 3.34 per cent.

Seven deals of 8,532 shares in Middlesea Insurance plc were traded throughout the week as the equity managed to close unchanged at Eur0.75, having traded at a weekly low of Eur0.72 during Tuesday’s session.

Likewise, Medserv plc closed the week unchanged at Eur4.25 as 2,000 shares were active across two deals, while Malta International Airport traded unchanged at Eur3.00 on two trading days, as 3,770 shares were traded across three transactions. Similarly, 400 shares in Island Hotels Group Holdings plc left the price unchanged at Eur1.01 over two deals. Island Hotels Group Holdings this week announced a profit before tax of Eur1.6 million for the financial year ended October 31, 2009. The Board of Directors resolved to recommend for the approval at the Annual General Meeting the payment of a net dividend of Eur423,230(net Eur0.012 per share).

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