MSE Trading Report for week ending June 18, 2010

Investors continue to focus on bonds

The Malta Stock Exchange (MSE) Index edged 0.07 per cent lower to 3,412.471 points. The local market failed to keep to the upbeat of the opening two sessions as the three trading sessions which followed closed in negative territory. Outlook towards banking equities remained rather mixed with some gaining ground and the others keeping the negative trend experienced lately. Risk appetite increased this week as investors opted for corporate bonds which saw a hefty increase in turnover, while demand for safer government stocks declined marginally.  Thirteen equities were active over the week, as four gained, another four closed in the red and five equities closed flat.

Transactions across all traded securities increased to 369 deals for a total value of over Eur7.2m. In the equity market, trading volume increased further as 410,614 shares were dealt over 156 transactions. In the Corporate Bonds market liquidity soared from 275,909 nominal traded last week to over 1m nominal over 105 deals, with turnover reaching Eur1m. In the Government Stocks market 106 transactions of 2.1m nominal were executed totalling Eur2.3m, while in the Treasury Bills market two deals over a single security was recorded for a value of Eur3.3m.

For the second consecutive week Middlesea Insurance plc headed the list of gainers having gained 5.56 per cent or Eur0.05. However, this gain was backed up by only 7,016 shares dealt across nine deals, down from 55,495 traded last week. Since the beginning of the year the equity climbed by 18 per cent as it ended the week at Eur0.95.

After a string of negative sessions HSBC Bank Malta plc shares managed to move up as the equity posted gains of 1.81 per cent or Eur0.051 to close the week at Eur2.871. The Bank started the week with a strong 2.13 per cent gain, edged slightly lower in the following two sessions, and regained some ground during yesterday’s session. Trading volume declined to nearly 35,000 shares dealt across 25 deals, which was more or less spread evenly throughout the five sessions.

On the contrary, Bank of Valletta plc shares maintained their downward trend as the equity closed Friday’s session at Eur3.25, hence 0.61 per cent down on the week. Liquidity improved slightly with over 29,700 shares changing hands over 36 deals. The equity managed to gain in the opening session however, the losses recorded in the closing three days of the week were enough to propel the equity in decline.

Similarly, Lombard Bank plc lost 2.05 per cent over five deals of 8,288 shares to close the week at Eur2.919.  Meanwhile, FIMBank plc was the only financial equity to close unchanged at $1.01. The equity was the week’s most liquid as nearly 115,000 shares were active over 12 deals.

Malta International Airport plc shares maintained their positive momentum as the airport operator moved 2.5 per cent higher to close at Eur1.64. Trading volume went up to nearly 34,000 shares dealt across 22 deals. On Thursday the company announced that the Board of Directors has confirmed Mr Julian Jaeger as CEO for another three-year term.

There seems to be no respite for GO plc shares which closed down by a hefty 9 per cent as 23,200 shares were traded over 12 transactions. Similarly, Grand Harbour Marina plc closed lower by one per cent at Eur1.96 as one deal of 1,500 shares was executed.

In the IT Sector RS2 Software plc was the only active equity. On Tuesday the company’s share price gained 0.19 per cent to close the week at Eur0.53. A total of 8,000 shares were dealt across three transactions.

MaltaPost plc managed to close flat at Eur0.90 after some deals were executed at a weekly low of Eur0.879. Trading volume was the second highest across all active equities with over 93,000 shares changing hands over 14 deals. International Hotel Investments plc also closed unchanged at Eur0.825 as 14 deals of 47,541 shares were registered.

Similarly one deal of 658 shares in Simonds Farsons Cisk plc left the equity’s price flat, while Medserv plc traded flat at Eur4.28 across two deals of 7,750 shares.

On Wednesday Mediterranean Investments Holdings plc announced that it will issue the equivalent of Eur30m Bonds in Euro, Sterling, and US Dollar subject to an over-allotment option not exceeding the equivalent of Eur10m. The Bonds carry an interest rate of 7.15 per cent on an annual basis and are redeemable on any dates between July 23, 2015 and 2017. The funds are principally earmarked to finance the Company’s 25 per cent equity participation in the Medina Tower project in the centre of Tripoli, Libya.

Meanwhile, Hotel San Antonio plc announced that it intends to buy-back the Company’s 7.5 per cent Bonds from its bondholders. The company stated that this is not an early redemption, but it will purchase Bonds on the open market, the total value of which shall not exceed the maximum consideration of Eur2m.

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].