MSE Trading Report for week ending May 4, 2018

The MSE Equity Total Return Index partially recovered last week’s loss as the index closed 1.18% higher at 8,470.845 points. A total of 17 equities were active during this four-day week, of which gainers amounted to eight and fallers totalled five. In the equities market, a total of 144 deals generated a turnover of €910,608, which is slightly lower than the previous week.

 

Bank of Valletta plc was the most liquid equity as 88,347 shares were exchanged across 37 deals. The result was a 1.17% increase in value to €1.73, at which price the equity closed each session of the week. Next Thursday the bank will be holding its annual general meeting.

 

The only other active banking equity was HSBC Bank Malta plc, which also traded heavily as traded volumes amounted to 62,139 shares over 13 transactions. The share price was up 0.58%, closing at parity with its peer at €1.73.

 

On Monday, Lombard Bank Malta plc announced that Virtu Holdings Limited have increased their total shareholding in the company from 4.42% to approximately 9.41%, following the acquisition of just over 2.2 million ordinary shares, through an off-exchange transaction. No trades were recorded during the week.

 

Telecommunications company, GO plc also posted a modest gain of 0.58%, reaching a price of €3.46. The equity traded six times as 10,840 shares changed ownership.

 

International Hotel Investments plc published its financial statements for the year 2017, which show a net profit after tax figure of €14.9 million, up from a loss of €7.7 million in 2016. This profit figure is the highest in the company’s 18 year history. The positive results were backed by improved performances across all the operating hotels, as total revenue increased from €157.9 million to €242.4 million. The increase in revenue is mainly attributable to the consolidation of the Corinthia Hotel London which contributed €68.7 million of the increase, the remaining €15.8 million is the result of continuing performance improvements in the other operations of the Company. Earnings per share stood at €0.02 per share, compared to the previous year’s figure of €0.01.

 

Despite the positive results, no dividends were declared for 2017, however, the Chairman, Mr Alfred Pisani, insisted that the board intends to adopt a dividend policy in the near future, suggesting that an interim dividend might be issued during 2018, as soon as the process of rationalising the dividend from an accounting and cash flow point of view is complete. 

 

Investors reacted positively to these results, as IHI topped the list of gainers with a 7.5% hike to €0.645 as 130,570 shares traded over 18 deals.

 

Malta International Airport plc was also very active this week as 17 deals were recorded in which 29,939 shares changed hands. The equity edged 0.41% lower, settling at €4.84.

 

In the insurance sector, Mapfre Middlesea plc closed unchanged at €1.90, despite a turnover of €7,464 over three deals.

 

RS2 Software plc published its Annual Report and Financial Statements for 2017. The group’s profit after tax for 2017 was €614,796, up by 35.7% from 2016. Operating profit for the year increased by 92% to over €1.6 million. A major drag on the net profit was the fact that finance costs more than tripled throughout the year, to €466,616. This was mainly due to changes in currency exchange rates, as a non-operating unrealised exchange loss of €357,939 was recorded in 2017, compared to an unrealised gain of €143,807 in 2016. Earnings per share were up to €0.005, from €0.003 in 2016. The board has resolved to recommend for approval at the AGM the payment of a final net dividend of €0.0146 per share to all shareholders on the register as at close of business of May 18, 2018.

 

The equity gained 2.4 per cent in 12 deals of 48,742 shares to close at a weekly high of €1.30.

 

On Monday, Simonds Farsons Cisk plc announced that the 71st Annual General Meeting will be held on Thursday, June 21, 2018. The equity traded flat at €6.70 across two deals of a combined 4,442 shares.

 

Retail conglomerate PG plc advanced 0.77% to €1.31 as seven trades of 28,130 shares were recorded.

 

On Monday, Medserv plc announced the financial results for the year ended December 2017. The company was negatively affected by slowdown in demand for its services, delays in drilling projects, and pressure on profit margins due to a downturn in the oil and gas service industry. As a result, a loss after tax of €7,633,559 was registered by the group, compared to a profit figure of €3 million in the previous year. Revenues were down by 12.3% from €32.8 million in 2016, to €28.8 million last year. Cost of sales however decreased at a slower rate of 6.1% due to a high portion of fixed costs, while administrative expenses increased by 34.5% to €6.9 million. Another major factor for the loss registered, was a 55.2% increase in finance costs, to €4.4 million. The company also stated that the delayed drilling projects are still in place, so these are expected to contribute during the coming year.

 

In another announcement, the company gave an update to the market on its performance for the first quarter of 2018, showing signs of improvement over 2017. Turnover was up by 19% over the same period last year, which translated to a 56% improvement in earnings before interest, taxation, depreciation and amortisation (EBITDA).

 

In a separate announcement, Medserv declared that its two main shareholders, Mr Anthony S. Diacono, and Malampaya Investments Limited, have informed the board that they intend to source a strategic purchaser to acquire all, or part of the major shareholders’ holdings in the company. The process is still at a very early stage and at this point, there is no certainty that a suitable purchaser will be found or that negotiations will be successful, once commenced.

 

The equity traded flat at €1.10 as 18,700 shares changed hands over three deals.

 

Loqus Holdings plc was the worst performer as it sank 24% to €0.076 as a result of just one transaction on slim volume.

 

In the property sector, Plaza Centres plc erased last week’s gain as it drifted 1.89% to return to the €1.04 price level. In total, 111,850 shares traded over six deals.

 

MIDI plc bounced back from the previous week’s loss, climbing 1.13% to €0.358. Trading volume amounted to 58,000 shares over two deals.

 

Its peer, Malita Investments plc followed suit, putting on 1.81% to reach a price of €0.845. Nine deals of a combined 58,029 shares were registered.

 

A single transaction of 1,555 Tigne Mall plc shares had no impact on the share price of €0.95.

 

Malta Properties Company plc surrendered all gains registered last week, dropping 3.83% to €0.452 across 5 transactions of 36,268 shares.

 

Trident Estates plc announced on Monday that the 18th Annual General Meeting shall be convened on Wednesday, June 27th, 2018. The company also announced that its three major shareholders have disposed of a number of their shares in order to secure full compliance with the 25% free float requirement for listing. The equity extended its negative streak to three successive weeks, as a couple of transactions of 16,500 shares dragged the price down by 0.62% to €1.60.

 

In the corporate debt market, gainers outweighed fallers as out of 35 active bonds, 17 traded higher and ten drifted lower.

 

The 4.35% Hudson Malta plc Unsecured € Bonds 2026, which commenced trading on Thursday, had positive first days on the Malta Stock Exchange having closed 3.99% higher than its nominal price, at €103.99.

 

On the other hand, the 6% Medserv plc Sec. & Grntd € Notes 2020-2023 S1 T1 3 were down a substantial 4.25% to €101.50.

 

Yields in the local sovereign debt market were down, as from 18 active issues, 17 headed north and the other traded flat. The longer dated issues posted the larger gains, particularly the 3% MGS 2040 which increased 1.23% in value to close at €118.80.