MSE Trading Report for week ending July 23, 2010

Index up despite investors’ focus on bonds

For the third consecutive week the Malta Stock Exchange (MSE) Index closed in positive territory as it closed the week at 3,519.694 points a level last reached in May 2010, gaining 1.07 per cent on the week. Turnover in the equity market declined, while liquidity improved slightly, boosted by unusually high trading volume in the two hotel operators listed on the MSE during yesterday’s session. Once more, investors focused their attention on the fixed income markets as turnover in this sector soared on the week, and heavy trading volume was also recorded.   

Transactions across all traded securities increased to 511 deals from 369 deals recorded last week. Turnover more than quadrupled as over Eur13.3m was traded. In the equity market 140 transactions of 279,874 shares were executed for a total value of Eur418,892. In the Corporate Bonds market over 2.2m nominal was dealt across 142 deals for a total value of over Eur2.2m, while in the Government Stocks market 228 transactions for a value of Eur6.5m were executed. One deal of 4.1m nominal was recorded in the Treasury Bills market.

The positive outlook towards financial equities waned slightly as Bank of Valletta plc (BOV) was the only equity to gain ground in this sector, while another two closed lower. Over a slight decline in liquidity BOV shares climbed 0.93 per cent or Eur0.03 to end the week at Eur3.27. The equity’s price fluctuated abnormally this week, having ranged between a low of Eur3.13 and a high of Eur3.301. A total of 31,123 shares changed hands over 46 deals.

Despite having started the week on a negative note, International Hotel Investments plc emerged as the best performer of the week. The equity’s price jumped by 8.75 per cent after the equity yesterday posted an 8.89 per cent gain. Trading volume in this equity more than doubled on the week as 86,903 shares were traded across 18 transactions. This week’s gain pushed the equity’s year-to-date performance to 8.75 per cent in positive territory.

Following an uneventful week, Island Hotels Group Holdings plc shares moved 0.1 per cent higher on the last trading session of the week. Trading value reached almost Eur69,000, as ten deals of 69,000 shares were executed with the share price barely fluctuating as it closed at Eur1.

MaltaPost plc shares also performed strongly having posted a 5.46 per cent or Eur0.044 gain. However, there were only 2,504 shares to back this gain, after the postal operator had tumbled by 5.18 per cent the previous week. With this week’s gain the equity managed to recoup last week’s lost ground as the price now stands at Eur0.85.

On the negative side FIMBank plc topped the list with a 4.29 per cent or $0.045 loss. As was the case last week trading volume was on the low side, with a total of 6,100 shares being dealt across three transactions. The equity’s price approached the lowest price reached this year of $0.999, having closed the mid-week session at $1.001, retracting some of its losses during the following session to end the week at $1.005.

Conversely to last week HSBC Bank Malta plc shares moved against its peer as it recorded a 1.29 per cent loss. The equity’s price slipped 0.3 per cent and 1.66 per cent lower during the opening two sessions, erasing some of these losses on Wednesday as it closed the session at Eur2.99. Throughout the following two trading sessions the equity’s price barely changed with both sessions closing at Eur2.99. Trading volume declined drastically from over 77,000 shares active last week to 18,634 shares dealt over 19 transactions this week.

Active only on one trading day, Lombard Bank plc shares failed to register a change in price as 1,500 shares dealt over one transaction were traded at last week’s close of Eur2.91. Similarly, Middlesea Insurance plc closed flat at Eur1.15. This is the second consecutive week for the equity to close unchanged, despite having closed Tuesday’s session 1.74 per cent higher at Eur1.17. During Thursday’s session however, the equity’s price shed all its previous gains. A total of seven transactions of just over 8,000 shares were executed throughout the week.

GO plc also closed unchanged as the equity managed to regain the lost ground of the week’s opening session. In fact on Monday the equity edged minimally lower to close the session at Eur1.92, maintaining this closing price during the following two trading days. On Thursday over an insignificant 405 shares dealt across one deal the equity gained 0.52 per cent to return to last week’s position at Eur1.93.

Malta International Airport plc (MIA) shares posted a 1.27 per cent gain as the equity gained in the opening session, lost some ground in the following session and back again in positive territory during the mid-week session ending the week at Eur1.60. Trading volume remained more or less in last week’s territory with a slight pick up as 41,280 shares were traded over 22 deals.

Meanwhile, one deal of 2,000 shares in Medserv plc depreciated the price by 1.18 per cent or Eur0.05 to end the week at Eur4.20.

On Tuesday the Treasury announced the issue of two Malta Government Stocks for a total amount of Eur100 million subject to an over-allotment option of up to Eur50 million in the case of over-subscription. The two stocks will be fungibility issues of the 3.75% MGS 2015 (VI) and the 5.25% MGS 2030 (I). The Treasury is also offering Eur30 million in a new fungible stock linked to the 6-month Euribor. Prices for these stocks will be announced on Thursday July 29, 2010.

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].