Bank of Valletta plc in the limelight

MSE Trading Report for week ending October 27, 2017

The MSE Equity Total Return Index oscillated in positive and negative territory as the index declined by 0.45% to close at 8,937.084 points. The index experienced the largest decline in a single session year-to-date on Wednesday, managing to recoup most of the decline during Friday’ session – as Bank of Valletta plc shares fell ex-rights on Wednesday. A total of 18 equities were active of which the absolute majority amounting to 12 gained ground, while three headed south. Total turnover marginally declined from €2.84million to €2.72million.

Bank of Valletta plc (BOV) shares closed the week €0.10 or 4.8% lower at €2.00, having traded at a low of €1.83 having recovered by 8.1% during yesterday’s sessions as turnover reached €1.25 million over 136 trades.

On Monday, BOV reported that it submitted of an application for authorisation and admissibility to listing to the Listing Authority requesting the approval of a prospectus in relation to the Rights Issue. The Rights Issue will be offered to existing shareholders who appeared on the register of members as at the close of business on Thursday.

The Rights Issue will be offered to existing shareholders appearing on the Issuers’ register of members as at close of business on Thursday. Shareholders will be entitled to one ordinary share for every four ordinary shares held.   The price was set at €1.43 per new ordinary share, consists of a discount of 27.47% to the theoretical ex-rights price (“TERP”). In calculating the TERP, the Issuer has taken into account the trade weighted average price of the Issuer’s ordinary shares over a three-month period from July 18, 2017 to October 17, 2017. Shareholders who do not take up any of their rights to subscribe for the new shares will, if the Rights Issue is fully taken up, suffer an immediate dilution of 20% in their interests in the Bank

On Friday, the BOV Group published its interim results for the twelve-month period ended September 30, 2017, and is reporting a pre-tax profit of €143.9 million for that period. This compares to a pre-tax profit of €145.9 million for the corresponding period last year.  The latter result included a one-time windfall gain of €27.5 million, resulting in an adjusted comparable profit last year of €118.4 million. Earnings per share (EPS) increased to €0.233 from €0.226 in 2016.

Core profit (profit stated before fair value movements and the contribution of associated companies) amounts to €124.0 million, an increase of almost 23% over the €101.2 million registered for the corresponding period in 2016.

Two significant items which have also strongly contributed to the Group’s overall profitability were the reversal of impairment charges against non-performing loans and a strong recovery from its associated companies in the life and non-life insurance businesses.

Group total income rose marginally over last year, to reach €256.4 million. Net interest margin, which yielded €147 million (2016: €149 million) accounted for 57% of this total income, compared to 59% last year. On the other hand, the growth in fee and commission income made up for the reduction in interest margin.

Lombard Bank plc andHSBC Bank Malta plc shares both headed in positive territory. Lombard shares added on 4.6% to its share price to close the week at €2.30, while HSBC shares followed suit as the equity gained a marginal 0.2%, closing at €1.859, having traded at a weekly high of €1.90.

Malta International Airport plcshares hit an all-time high on Thursday as the equity reached the €4.80 price level. The equity closed higher for the eighth consecutive week at €4.79 as a total turnover of €437,437 was generated among 34 transactions.

Similarly, Simonds Farsons Cisk plc shares reached a fresh all-time high, as 1,631 shares spread over three deals managed to push the price 1.90% higher to €9.65.

Retail conglomerate, PG plc settled back to its all-time high at €1.50. A total of seven trades managed to generate a total turnover of €66,229.

RS2 Software plc shares registered one of the weakest performances during the week as the equity contracted by 4.7% to close at €1.60. A total of 20 transactions managed to generate a total turnover of €91,396.

Insurance firm, Mapfre Middlesea plc traded twice on Tuesday over 10,000 shares, pushing the price by 3.6% to €1.927.

Also on Tuesday, four deals amounting to a turnover of €11,748, managed to add on 1% to Maltapost plc shares.

On the contrary, International Hotel Investments plc shares closed the week 0.7% lower at €0.61 as an abnormal turnover of 731,782 was generated among 13 transactions.

In the property sector, Plaza Centres plc, MIDI plc and Malita Investments plc, all registered gains in excess of 5%. Malita shares managed to outperform its peers registering a gain of 6.7%, closing at €0.80. Meanwhile, Plaza and MIDI shares both closed 5.6% higher, at €1.109 and €0.319 respectively.

To a lesser extent their peers, Malta Properties Company plc and Tigne Mall plc registered a gain of 0.6% and 0.5%, closing at €0.507 and €0.96 respectively.

Elsewhere, Medserv plc, GO plc and Santumas Shareholdings plc all closed flat at €1.26, €3.59 and €2.25 respectively.

In the Local Sovereign Debt market, the absolute majority of the active issues headed into negative territory, as from the 23 active only four gained ground. The 4.3% MGS 2033(II) R broke a three week winning streak as the bond price declined by 0.8% to close at €132.93.

In the local corporate debt front, a total of 42 issues were active of which 19 closed higher, while 12 declined. The newly listed Mediterranean Bank plc 5% Subordinated Unsecured Bonds 2027 managed to gain 2.5% from its opening price to close the week at €102.50.

On Friday, Anchovy Studios plc, whose bonds trade on the Prospects MTF market, announced that it had entered into agreements as part of a wider transaction which will result, on completion, in the Company being allotted 22,500 shares (equivalent to 26.25%) in Fetchit Technologies Limited, a start-up looking to offer logistics solutions to the local market.

The allotment forms part of a wider, strategic transaction which includes Food Solutions Limited-operators of Time to Eat, a take-away and food delivery online portal – who have also acquired a stake in Fetchit.