Local Equity Index settles at a fresh 12 month low

 MSE Trading Report for week ending November 24, 2017

The MSE Equity Total Return Index wasdown again for the sixth consecutive week – this time by 1.26%, to close at 8,493.306 points – the lowest point in 12 months. A total of 17 issues were active during the week of which 10 closed lower, while three ticked higher. Despite trading on relatively shallow volumes, Mapfre Middlesea plc and International Hotel Investments plc registered the weakest weekly performances. The former declined by 6.32% over seven trades worth €22,894, while the latter fell by 6.29% over nine trades, in which a total of 9,863 shares were exchanged. The price tag at the end of Friday’s session read €1.78 and €0.581 respectively. Total turnover during the week amounted to €1.65 million spread over 213 transactions.

In the banking industry, Bank of Valletta plc traded heavily as a total of 416,620 shares were exchanged over 95 deals, ahead of the bank’s rights issue. Trading in this equity accounted for almost 46% of total trading. The equity lost 0.78% of its value during the week, to close at €1.786.

Bank of Valletta plc’s peers, HSBC Bank Malta plc and Lombard Bank plc, both registered some activity but closed unchanged at €1.86 and €2.20 respectively. Turnover in reached 75,571 and 16,448 shares respectively.

Last Monday, HSBC Bank Malta plc published its interim directors’ statement, in which it stated that during the period from July 1 to November 15, 2017 HSBC Malta reported a decline in profit before tax compared to the same period in 2016. Although profitability was lower during the period, it remained broadly in line with management expectations, consistent with the bank’s prioritisation of risk management actions in 2017. Revenue for the period under review was lower than in the prior period as a result of the prevailing low interest rate environment, reduction in the corporate loan book and the risk management actions which impacted non-interest income.

Andrew Beane, the Chief Executive Officer of HSBC Malta, stated that 2017 is a year where the bank has consciously focused on the acceleration of risk management actions which it believes is the right short-term strategic priority to protect long-term value for shareholders.

On a positive note, FIMBank plc experienced a 5% price appreciation, as the equity closed at $0.63. This positive price movement came as a direct consequence of seven deals, in which 185,846 shares changed hands.

In the property sector, MIDI plc’s equity price ticked 4.62% higher over 12 deals worth €68,834. Similarly and in the same line of business, Plaza Centres plc closed in the green, as the price per share increased by 0.9%, to close at €1.011. This result was achieved over a single trade of 5,000 shares.

Malta Properties Company plcwas the sole equity within this sector which closed in the red, as it depreciated by 1.38% over nine trades worth €36,002. The price at the end of the week’s final trading session read €0.50.

Property company, Malita plc, was traded on three separate occasions but closed unchanged at €0.751 on 27,862 shares.

Despite all registering declines, GO plc, Global Capital plc, Medserv plc and PG plc experienced varying declines. Telecommunications company, GO plc and retail conglomerate, PG plc slipped by 2.36% and 2.03% respectively, while Global Capital plc and Medserv plc each depreciated by over 4.7% despite being active over low turnover. GO plc closed off the week at the €3.515 price level, following 18 trades worth a total of €271,113, while PG plc settled at €1.45 over four deals which yielded a total of 27,200 traded shares. Global Capital plc and Medserv plc closed at €0.34 and €1.205 respectively.

Last Wednesday, Medserv plc’s Directors published their interim report stating that their earnings for the second half of the reporting year are lower than forecast due to projects both in Integrated Logistics Support and Services (ILSS)and Oil Country Tubular Goods (OCTG)commencing towards the end of the year.This will impact negatively on the current year’s results. The second ILSS base, recently opened in Cyprus, will become fully active in the coming month. Four to five wells are expected to be drilled in the waters offshore Cyprus in the next twelve months.

Meanwhile, the second OCTG base opened by the Group in Duqm, Sultanate of Oman, commenced operating this month. This was in support of a contract, the largest ever won by the Medserv Group, awarded in the beginning of this year for an initial period of five years with a five-year extension option.

Projected growth for the period 2018 to 2020 remains strong for both business segments based on drilling projects and workover programs already contracted and expected to come to fruition in the coming three years, buttressed by an additional two new geographic markets by year 2018 in line with the Group’s strategy.

Malta International Airport plcshares were once again in the red, as the equity contracted by 0.43%, closing at €4.60. A turnover of €75,242 was registered, spread over 13 deals.

Similarly,RS2 Software plc shares extended their negative performance for the eighth consecutive week, as the equity settled at €1.523 price. The equity featured in six trades in which a total of 24,746 shares were exchanged.

Food and beverage firm, Simonds Farsons Cisk plc was active over six trades but closed unchanged at €8.76

In thecorporate debt market a total of 40 issues were active during the week of which 18 gained and 14 headed in the opposite direction. The 5.75% International Hotel Investments plc Unsecured € 2025 headed the list of fallers, following a 2.94% price contraction, to close at €104.80, while the6% Island Hotels Group Holdings plc € 2024 closed off the week at the opposite end of the spectrum at €107.90 – a 1.78% week-on-week gain.

In the sovereign debt market, a total of 23 issues were active of which the absolute majority amounting to 16 headed north, while six closed lower. The longer dated bonds experienced the best performances. As a matter of fact, the 2.4% Malta Government Stock 2041 (i) r closed 1.43% higher at €106.50.