The MSE Equity Total Return Index surrendered last week’s gain having declined by 1.43% on the week, closing at 8,605.25 points. In the equity market, a total of 16 securities were active, of which gainers and fallers amounted to six. Investment activity declined significantly, as a turnover of €1.4 million was generated over 234 deals.

 

On Monday, HSBC Bank Malta plc published its interim results for the first six months of 2018, reporting a profit before tax of €16.2 million. This translates to a decline of 38%, or €9.8 million over the corresponding period last year. This downturn in profits was somewhat expected, as it was the result of a strategy focused on mitigating risks and overhauling the bank’s compliance function. This profit figure was also impacted by the continuing low interest rate environment.

 

The implementation of these de-risking actions is now nearing completion, and thus, the bank is now transitioning into a new phase of its long-term strategy, shifting its main focus to growth and value creation by enhancing return on equity.

 

Net interest income for the period under review was down by 10% compared to the first half of 2017, partly as a consequence of a lower average yield on the investment book, and the contraction of the commercial banking loan book. On the other hand, non-interest income remained relatively stable as net fee income was recorded at €11.9 million.

 

With regards to the group’s financial position, customer deposits were 1% higher than the end of 2017, as deposits increased in all segments of customers of the commercial banking business. The bank has also managed to maintain a strong capital position, thus enabling the board to sustain the 65% dividend pay-out policy. In fact, a net interim dividend of 2.6 cents per share is being recommended by the board of directors, to be paid on September 18, 2018 to all registered shareholders as at August 17, 2018.

 

The equity traded heavily throughout the week as 179,885 shares changed hands across 45 trades. The share price temporarily posted a loss following

the announcement, but eventually bounced back to recapture the €1.89 price level, thus closing the week unchanged.

 

Its peer, Bank of Valletta plc was once again dominated by selling pressure, as it extended its negative streak to four straight weeks. This week, the share price drifted 3.75% to €1.54. The equity was the most liquid as 288,228 shares changed ownership across 100 deals.

 

Also, in the banking industry, FIMBank plc was up by 0.93% to €0.545, as four deals of 25,981 shares were struck.

 

On Wednesday, Malta International Airport plc published its traffic results for July 2018. Unsurprisingly, the results were very positive, setting a new monthly traffic record of 756,356 passengers during the month. This figure translates to an increase of 12.1% over the same month of the previous year.

 

This positive performance was observed in parallel with an 11.3% increase in aircraft movements, an 11.5% rise in seat capacity, and a seat load factor of 87.1%.

 

While four of the top markets registered growth that ranged between 14.4 per cent and 34.3 per cent, Germany’s passenger movements decreased by 4.3 per cent. This decrease resulted from a reduced schedule by TUI cruises, affecting the cruise and fly passenger traffic throughput.

 

During the week, the equity was down 0.88% to €5.65, as 10,553 shares traded over 10 deals.

 

In the telecommunications sector, GO plc published its interim financial results for the first six months of 2018. The group registered an improved performance when compared to the corresponding period last year, as indicated by the significant 13.2% increase in profit before tax which reached €15.3million.

 

Revenue was up by 4.1% to €84.3 million, also resulting in a slight increase in EBITDA. One of the main drivers of retail revenue growth was a larger mobile customer base as well as growth in usage of mobile data. This growth was in line with the group’s strategy of growing its telecommunications business in Malta and Cyprus, in spite of the intense competition in the telecommunications industry.

 

The board has decided to determine the extent of dividend distribution on the basis of the full results for the year, and as such, no interim dividend shall be distributed.

 

A total of 23,763 GO shares were exchanged across 13 transactions during the week, however no week-on-week change was recorded

 

International Hotel Investments plc was the worst performer, as it sank a sizeable 7.69%, to close at €0.60. Trading volume amounted to 27,157 shares over six deals.

 

In the insurance industry, the gain registered by Mapfre Middlesea plc during the previous week’s trading proved unsustainable, as the equity surrendered 2% in value, to return to the €1.96 level. A total of just three transactions were recorded, in which 9,278 shares were exchanged.

 

Retail conglomerate PG plc advanced 1.49% in value, to close at €1.36, as a substantial 115,400 shares changed ownership over 11 trades.

 

On Monday, Malta Properties Company plc provided an update with regards to the promise of sale agreement between its wholly owned subsidiary, SLM Property Company Limited as seller, and Toncam Properties Limited as buyer, for the property known as the Sliema Old Exchange.

 

The final deed of sale has now been officially executed between the two parties for a consideration of €5m, of which €500,000 was paid upon the execution of the promise of sale agreement, and €4.5m paid upon the final deed of sale. The proceeds from this sale are expected to go towards funding MPC’s development projects or any acquisition opportunities.

 

The equity was up 1.96%, to close at €0.52, as a result of eight transactions of a combined 28,289 shares.

 

Main Street Complex plc announced that its board of directors is scheduled to meet on August 24, 2018, to approve the interim financial statements for the six month period ended June 30, 2018. A single transaction of 2,000 shares had no effect whatsoever on the share price of €0.665.

 

The board of directors of RS2 Software plc is set to meet on August 28, 2018 to consider and approve the interim financial statements for the first half of 2018. Contrasting performances late during the week were registered, with the share price ultimately closing unchanged at €1.19.

 

Medserv plc traded seven times as 31,500 shares were negotiated. The result was a 0.91% gain in price, closing the week at €1.11.

 

In the property sector, Plaza Centres plc recorded two trades of 15,475 shares during the week. The share price ended the week at €1.02, translating to a negative change in price of 1.92%.

 

In the same sector, MIDI plc had a very positive week, setting a new all-time high of €0.494, which 2.92% higher than last week’s closing. The equity traded heavily as 291,500 shares were exchanged over 11 deals.

 

During a board meeting held on Friday, the board of Directors of Malita Investments plc approved the Company’s condensed interim financial statements for the six months ended June30, 2018. Profit before tax decreased year-on-year from €9.69 million in 2017 to €6.52 million in 2018. Profit after tax increased substantially from €1.68million in 2017 to €5.50million in 2018, mainly due to the substantial deferred tax during the same period in 2017. Meanwhile Earnings per share increased from 1.13 to 4.59 in 2018.

 

The Directors of the Company have also approved the payment of an interim net dividend of €1,270,767 or €0.00858 per share. The interim dividend will be paid on September 7, 2018 to the Shareholders on the Company’s share register at close of business at the Malta Stock Exchange on August 23, 2018.

 

In total, three transactions of 39,200 shares were executed this week, dragging the price down by 1.69% to €0.87.

 

Tigne Mall plc posted a significant gain in value of 2.11% ahead of its dividend cut-off date on Tuesday, August 14. The share price closed at €0.97 as 17,000 shares changed hands across a couple of deals.

 

It was a positive week for the local sovereign debt market, as out of the 23 active issues, 18 posted gains, while only five declined.

 

The largest gains were recorded by the longest-dated securities, particularly the 2.4% MGS 2041(I), which registered a positive movement of 1.27%, to close the week at €105.93.

 

The worst performer was the 1.5% MGS 2027 (I), which was down 0.94% to €102.53, as a result of a single trade of 3,000 shares.

 

The local corporate debt market posted rather mixed performances, as out of 40 active issues, 19 traded higher while 12 lost ground.

 

The top performer was the 5.5% Pendergardens Developments plc Secured € 2020 Series I, as it appreciated by 3.27% to €105.85.

 

On the other hand, the 4.5% Medserv plc Unsecured € 2026 fully erased two weeks’ gain, as it drifted 2.44% to trade at par.

 

This article which was compiled by Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member of the Malta Stock Exchange and a member of the Atlas Group. 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 Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected] https://www.jesmondmizzi.com/