Long-dated sovereign bonds rally to record highs
MSE Trading Report for week ending January 23, 2015
The sovereign bond market witnessed a turnover of just under €13.6 million this week as a total of 26 issues were active. Only three short-term issues declined marginally, the 3.75% MGS 2015 (VI) closed unchanged at €103.13 while 22 long-dated issues soared. The 4.3% MGS 2033 (I) was the top performer as it surged by 1.4 per cent, to close at €119.45.
Meanwhile, in the corporate bond market turnover amounted to just under €2 million. A total of 33 issues were active of which 13 advanced, nine declined and 11 closed unchanged. The 6.5% Island Hotels Group Holdings plc € 2017-2019 fell by 3.7 per cent, to close at €102.60, while the 5% Tumas Investments plc Unsecured € 2024 appreciated by 1.4 per cent, closing at €107.99. The 5.1% PTL Holdings plc Unsecured € 2024 was the most liquid issue as a volume of 316,500 nominal was traded to close at €105.50
This positive performance registered in long-dated issues shadowed by the European Central Bank’s (ECB) announcement on Thursday afternoon of its commitment to a quantitative easing program worth €1.1 trillion to counter deflation. The pledge made by ECB president Mario Draghi is to buy a total of €60 billion a month in assets including government bonds, debt securities issued by European institutions and private-sector bonds. These purchases are intended to start this March through to September 2016.
The MSE Index registered an increase for the sixth consecutive week as it closed 1.9 per cent higher at 3,417.823 points. Total turnover amounted to €1.06 million spread across 15 equities of which two fell in value, eight gained ground and five closed unchanged. Island Hotels Group Holdings plc (IHG) shares were the best performers, while Middlesea Insurance plc (Middlesea) shares headed the list of fallers.
In the banking sector, Bank of Valletta plc was the only negative performer as its equity declined by €0.05 or 2.4 per cent on 92 deals of 171,983 shares to close at €2.05. Conversely, HSBC Bank Malta plc more than recouped last week’s 2.2 per cent fall as its share price climbed by 3.8 per cent across 11 trades of 36,457 shares, closing €0.074 higher at €2.03. Lombard Bank Malta plc shares extended their recent gains by a marginal 0.6 per cent as four transactions of 15,878 shares were negotiated, to close at €1.81.
International Hotel Investments plc(IHI) shares soared by 13.9 per cent as 184,169 shares changed hands, closing €0.079 higher at €0.649. Meanwhile, IHG shares gained 16 per cent as 6,000 shares changed ownership, closing at €0.99, following last week’s announcement of a conditional agreement reached by IHI for the acquisition of IHG. The directors of IHGH announced that a board meeting is scheduled for February 24, 2015 when the directors will review and approve the consolidated audited financial statements of the company for the year ended October 31, 2014. The company further announced that an Extraordinary General Meeting (EGM) will be held on February 20, 2015 to consider and, if thought fit, approve an ordinary resolution so that the company will by authorised and empowered to make such disclosures, including disclosure of price sensitive information, as the directors may consider appropriate to enable IHI to consider making a binding offer for the shares of the company, subject to compliance with the terms set out in Listing Rule 5.174 of the Listing Rules.”
Malta International Airport plc shares reached an all-time high of €2.455 as 13 trades of 55,947 shares were executed to end the week 2.1 per cent higher at €2.45. MaltaPost plc shares edged 1.8 per cent higher over six trades of 17,653 shares, closing at €1.232. After close of trading on Friday, the company announced that it forecasts to host around 4.4 million passengers in 2015 – a two per cent growth over 2014, which was a record year. The growth is a result of further capacity being deployed to Malta from operating airlines and a number of new airlines and routes including Aegean, Finnair, Jet2.com and Swiss. Last year saw 4,290,304 passengers – a 6.4 increase from 2013. Throughout 2015, MIA has €4 million worth of investments planned – these include improvements to the runway, apron and taxiway, expansion of the terminal building in the non-Schengen arrivals section, a new emergency operations centre, a reorganisation of the high voltage network and investment in back-up standby power generators. The company reported that the Board of Directors is scheduled to meet on February 24, 2015 to consider and approve the company’s financial statements for the financial year ended December 31, 2014, and to consider whether to declare and make a recommendation to the shareholders for the payment of a dividend.
In the I.T. sector, RS2 Software plc shares added on to last week’s gains by a further 0.1 per cent across five deals of 41,301 shares, to close at their record high of €2.974. Meanwhile, Crimsonwing plc shares traded flat at €0.85 on a sole transaction of 20,000 shares.
The other non-movers were GO plc, Santumas Shareholdings plc, MIDI plc and Malita Investments plc shares closing unchanged at €2.595, €2, €0.21 and €0.652 respectively.
On a negative note, Middlesea Insurance plc shares stumbled five per cent lower on a single trade of a mere 576 shares, closing €0.05 lower at €0.95. Conversely, Plaza Centres plc gained a marginal 0.2 per cent across two transactions of 59,500 shares.