Index back in negative territory

MSE Trading Report for week ending May 14, 2010

Index back in negative territory

Trading on the Malta Stock Exchange (MSE) Index slid back into negative territory following two weeks of gains. The local exchange kicked off the initial two sessions of the week in negative territory, recouped some losses in the following two days however closed down on the final session of the week. Outlook towards financial equities remained rather bleak, as nearly all traded equities ended the week in the red. Trading volume in the equity market declined on the week, a clear sign of investors’ mixed sentiment towards listed equities. Only three equities managed a gain, six equities closed in the red, while five closed flat.

Transactions across all traded securities increased to 531 deals on the week, for a total value of Eur10.8m. In the equity market, 290,535 shares were dealt over 175 deals, down from 219 deals executed the previous week. Trading volume more than doubled in the Corporate Bonds market as 79 deals were recorded for 727,650 nominal. In the Government Stocks market activity increased further to over 8.1m nominal traded across 276 transactions spread over 23 issues. In the Treasury Bills market one single transaction of 795,000 nominal was traded.

Trading volume in MaltaPost plc remained more or less in last week’s territory, which remains far from liquidity reached in the opening months of the year. In fact, 42,351 shares were dealt across 13 deals. On Thursday, the postal operator reached a new 25-month high of Eur0.88, this week’s closing price. This amounted to a gain of 2.33 per cent or Eur0.02, which enhances further the equity’s year-to-date performance which now stands at 25.71 per cent. On Thursday, the Company announced its interim financial report for the six months ended March 31, 2010 reporting a profit after tax of Eur1.18m, up 3.5 per cent over the corresponding period last year. The company also said that it intends to diversify the business into low-cost financial services and the provision of tailor-made back office processes.

Out of the financial equities traded this week, Middlesea Insurance plc was the only gainer. Trading volume declined to 24,700 shares to end the week up by 2.74 per cent or Eur0.02 at Eur0.75 dealt over 12 transactions. Outlook towards the insurance firm improved as the equity topped the list of financials for the second consecutive week. Despite recent positive market movement the equity is still down by 6.72 per cent on the year.

Meanwhile, Bank of Valletta plc (BOV) suffered a loss for the second consecutive week as the equity shed 2.1 per cent in the opening sessions, while closing unchanged in the final three trading days of the week. This remained the most liquid equity of the week although trading volume decreased to 74,483 shares dealt over 63 transactions. BOV closed the week at Eur3.26 after having fluctuated between a weekly low of Eur3.25 and a high of Eur3.299.

HSBC Bank Malta plc share price slipped back in the red as the Bank’s equity lost 0.82 per cent to end the week at Eur3.035, down from last week’s close of Eur3.06. Trading volume also declined, from over 88,168 shares dealt last week to 32,150 shares this week.

Activity in Lombard Bank plc remained on the low side when compared to its larger peers, as the Bank was active only during the opening and closing sessions of the week. This equity lost 1.69 per cent or Eur0.05 on the week as trading volume increased to 15,716 shares over seven transactions. The equity’s performance stands at 3 per cent in negative territory year-to-date, having closed the week at Eur2.90.

In the IT Sector, 6pm Holdings was the overall best performer as the equity gained 3.54 per cent over five deals of 7,066 shares, to end the week at £0.497. Crimsonwing plc and RS2 Software plc closed the week unchanged at Eur0.45 and Eur0.48 respectively, while Loqus Holdings plc lost Eur0.014 across 2,000 shares dealt over one single transaction.

Malta International Airport plc retracted all of last week’s gains as the airport operator ended the final session of the week down by 3.38 per cent on the week at Eur3.14.

GO plc closed the week under review flat as the equity ended all the trading sessions during which it was active unchanged at Eur2.12, last week’s closing price. Trading volume also declined as just over 24,000 shares were traded across 14 deals.

Medserv plc also maintained last week’s closing price of Eur4.28 as liquidity soared to 14,400 shares over three deals. Meanwhile, one transaction of over 4,000 shares in Grand Harbour Marina plc left the price untouched at Eur1.98, while a single deal in Plaza Centres plc depreciated the share price by 1.86 per cent to Eur1.639.

Throughout this week the issuance of three corporate bonds was announced as well as the prices of the three Government bonds announced last week. Farsons Group announced a Eur15m unsecured bond issue at 6 per cent, Tumas Investments plc announced a new bond issue worth Eur20m carrying a coupon of 6.2 per cent, while another bond issue for Eur15m at 6.6 per cent was announced by Eden Finance plc. All issues mature between 2017 and 2020

The prices of the three new Malta Government Stocks were also announced, subscriptions for which open next Monday and close on Wednesday. The prices for these issues are as follows; 3.75% MGS 2015 (VI) at Eur102.80, 4.6% MGS 2020 (II) at Eur102.50 and 5.25% MGS 2030 (I) at Eur99.50.

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].