MSE Trading Report for week ending March 5, 2010

Local equity market lacks lustre

The Malta Stock Exchange Index closed the first week of the month in decline having closed yesterday’s session at 3,603.56 points, hence 0.46 per cent lower on the week. The major banks disappointed again this week as both lost ground during three consecutive sessions, while activity took place across 13 equities, as four managed a gain, five equities closed in the red, and the remaining four closed flat. The Index’s negative streak now tallies to three weeks. During the week under review however trading volume reached a high since the beginning of the year, as high volume in MaltaPost reached an impressive level for the week.  

The total amount of transactions on the local exchange increased to 335 as total turnover increased for the second week in succession having reached Eur28.2m. In the equity market, 193 deals were executed for a total value of Eur812,000 while in the Corporate Bonds market 68 transactions of Eur490,234 were executed. Seventy-three deals were executed in the Government Bonds Market for a total value of nearly Eur27m up from Eur13.6m recorded last week.

The gains registered in the share price of Bank of Valletta plc in the initial and closing sessions of the week were not enough to make up for the losses in the other trading sessions, as the equity closed in decline for the second week running. Throughout the week trading volume increased to 47,135 shares as 49 deals were executed. The equity traded at a high of Eur3.369 on Monday, however closed the week at Eur3.31, having reached a weekly low of Eur3.27 during Thursday’s session. Hence, on the week the Bank’s performance dropped by 1.63 per cent.

The negative effect on the share price of HSBC Bank Malta plc brought about by last week’s annual results also prevailed this week as the equity lost ground on the last three trading days. As expected, on Monday the equity traded at a gain as investors rallied to acquire the equity to be eligible to the next dividend payment. On Tuesday’s session as the shares went ex-div, the equity closed unchanged at Eur3.389, however losing almost Eur0.10 as at close of yesterday’s session. In fact, the equity ended the week at Eur3.29, 0.3 per cent down on the week as liquidity declined to 51,050 shares over 53 deals.

Meanwhile, MaltaPost plc managed to retract all of last week’s losses as the equity closed yesterday’s session at Eur0.78, having traded at a weekly high of Eur0.80 and a low of Eur0.75. Trading volume in the equity reached an impressive level this week as 410,624 shares changed hands over 43 deals. The postal operator year-to-date performance now stands at 11.43 per cent.

On the contrary, GO plc erased all of last week’s gains as the equity closed yesterday’s session 0.39 per cent down at Eur2.29, having opened the week at Eur2.299, while closing unchanged across the previous four sessions, as a total of 16 deals were executed.

On a similar amount of transactions, Malta International Airport plc registered a respectable gain of 1.67 per cent or Eur0.05 on the week. Over 27,000 shares were transacted as the equity traded at a low of Eur3 and a high of Eur3.05, this week’s closing price. Year-to-date the equity is now up 27.08 per cent.

Similar to last week FIMBank plc was active during one trading session as 2,600 shares were traded over three deals, which left the equity unchanged at last week’s price of $1.18. Conversely, Middlesea Insurance plc closed 1.33 per cent in decline as six transactions of 7,475 shares were executed, to push the equity to a price of Eur0.74.

From the IT sector, two equities were active during Tuesday’s session as the gain of 5% registered by Loqus Holdings plc (formerly known as Datatrak Holdings plc) was offset by the 5.66 per cent loss suffered by RS2 Software plc both over one deal, the former closing at Eur0.21 and the latter at Eur0.50, a new-all time low for the equity.

Island Hotels Group Holdings plc was active only during the opening session, having closed flat at Eur1.01 on one deal of 1,000 shares, while Santumas Shareholdings plc also traded unchanged on Monday as one deal of 1,500 shares was executed at Eur2.60. Similarly, one transaction of 4,300 shares in Grand Harbour Marina plc pushed the share price by 1.60 per cent to close the week at Eur1.90.

International Hotel Investments plc (IHI) shares were only active on the mid-week session, as the equity closed at Eur0.80 having traded at Eur0.819 during the session. On Tuesday the company announced a Eur25m Bond issue redeemable between 2017 and 2020 at a coupon rate of 6.25 per cent. The proceeds from this issue are earmarked for the 5 per cent IHI redemption and for the repayment in full of an existing loan facility. Preference will be given to holders of the maturing bond and shareholders and bondholders of companies falling under the umbrella of Corinthia Group.

On Wednesday, Premier Capital plc, the licensee company for McDonald’s in Malta, Latvia, Lithuania, and Estonia announced a Eur20m Bond issue maturing in 2020 at a coupon of 6.8 per cent, subject to a further Eur5m in the event of over-subscription. The net proceeds from the issue of the Bonds will primarily be used towards the financing of the Group’s expansion and development strategies such as identifying and securing title on land and/or premises for development or conversion into McDonald’s restaurants in key locations. Funds will also be used to remodel McDonald’s restaurants presently operated by the Group also through the conversion of such outlets into hybrid McDonald’s restaurants and McCafes. Part of the bond proceeds will be used for the part-refinancing of the Group’s existing bank debt amounting to Eur7.6 million.

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].