MSE Trading Report for Week ending 15 May 2020

MSE Equity Total Return Index:

Chart of the Week: GO plc

Highlights:
  • The MSE Equity Total Return Index declined by 2.4%, reaching 8,169.326 points. A total of 14 equities were active, of which one advanced while another 12 lost ground. A total weekly turnover of €771,213 was generated across 159 transactions.
  • Last Wednesday, Malta International Airport plc announced its financial performance for the first quarter of the year. Passenger traffic registered a decline of 16.1% over the same quarter in 2019. Consequently, the group’s revenue during the first three months dropped by 17.5% to €12.8 million, when compared to the same quarter of 2019. Following the implementation of cost-cutting measures, total operating expenditure also decreased from €8.3 million to €7.8 million in Q1 2020, representing a drop of 5.9%. The Group’s capital expenditure for the first quarter of the year totalled €1.8 million.
  • Malta International Airport’s aviation and non-aviation activities, in a scenario characterised by a travel ban to and from Malta, evidently remain very limited. Accordingly, its revenue generation remains significantly impaired, when compared to normalised operations. This is further compounded by the uncertainty of the duration of the current situation which renders the short-term outlook for the group to be negative. The group reiterated that notwithstanding the adverse impact which the current COVID-19 situation has brought about, the directors have reason to believe that with the measures taken so far, and others which are planned to be taken should the need arise, the company is sufficiently resilient to be able to sustain the current conditions and that, during the current financial year, it has sufficient resources to meet all of its financial obligations.
  • The equity registered a 2% drop in price during the week as it reached the €4.80 price level. A total of 63,624 shares were spread across 59 transactions. Total turnover stood at €310,538 – being the most liquid for the week.
  • In the banking industry, Bank of Valletta plc closed the week at €1.04 – translating into a 1% fall in price, having recovered from a weekly low of €1.025.  A total of 44,334 shares changed ownership across 22 transactions. Similarly, seven deals involving 5,327 HSBC Bank Malta plc shares dragged the price by 6.37% lower. The bank closed the week at €0.955. On a year-to-date basis, this translates into a 26.5% decline in price.
  • Last Saturday, PG plc announced that further to the closure of the “non-essential” retail and commercial outlets with effect from March 23, 2020 and the re-opening on May 4, the group remains committed to ensuring the highest standards of care towards its employees and customers by operating strictly in line with the directives issued by the public authorities. The equity was active last Monday, as 13,080 shares changed hands over four deals. As a result, the price declined by 1.6% to €1.85. From a year-to-date perspective, the company registered a positive 0.5% movement in price.
  • Telecommunications company GO plc¸ lost 6.7% as it closed at €3.60 over 19,754 shares which were exchanged across 12 transactions. Similarly, its subsidiary, BMIT Technologies plc, was down by 4.2% as nine deals involving 70,150 shares were executed, closing the week at €0.46.
  • Last Tuesday, International Hotel Investments plc (IHI) issued a company announcement regarding to Hal Fehr.  IHI, the holding company for the Corinthia Hotels Group, thereby the owner of the site formerly known as Hal Ferh in Golden Bay. The company holds title held by way of a perpetual emphyteusis acquired from Government in 2009, limiting development to a footprint of 20% of the site’s overall area. Half the built footprint can be developed over two floors, and the other half to a single storey. The site currently enjoys a valid planning permit issued early in 2013 for a mass-market timeshare development comprising 216 self-catering apartments and a number of villa-style pavilions. The emphyteutical deed of 2009 cites tourism as a use for the site but included a mechanism for the conversion of part of the gross floor area to residential.
  • The company added that upon taking over the site in 2015 as part of the acquisition of the Island Hotels Group, it had declared its intention to re-design the development, whilst retaining the limitations on the overall footprint and volumes, as also a maximum height of two floors for half the buildings, and one floor for the rest. This is in keeping with its rural, Maltese context. On this basis, IHI reported that it intends to pursue an upmarket low-rise mixed development focused principally on a luxury hotel and spa complemented by serviced villas and bungalows. Having signalled these intentions, as per contractual mechanisms in the emphyteutical deed and the current planning permit, a series of processes has now commenced, the first being a public consultation on changes to the development brief for the site. When this process is complete, the normal planning application process will commence in parallel to a triggering of the emphyteutical deed’s mechanisms for the adoption of a mixed-use scheme, all of which are public processes.
  • IHI reaffirmed its intention to exalt the Maltese character of the development and retain the current limitations on footprints, heights and development volumes cited in the original title and development briefs for the site. This in keeping with Corinthia’s international positioning as a luxury brand which aims to target a more discreet clientele by proposing a low-rise, extensively landscaped mixed-use development as found across the more upmarket destinations in the Mediterranean.
  • Last Thursday, IHI issued the report prepared by MeDirect Bank (Malta) plc in terms of the Listing Authority policy on sinking funds for the year ended December 31, 2019. In December 2016, the International Hotel Investments plc sinking fund reserve was set up whereby Charts is the appointed custodian to hold and administer the sinking fund’s assets. Charts confirmed that as at the date of this report, the sinking fund amounts to €5,484,482.56, which is in accordance with the table of the sinking fund contributions included in the prospectus. Such proceeds have been properly applied in accordance with the investment parameters as described in the prospectus and the policies of the listing authority.
  • The equity reached a five-week low price of €0.57, translating into a 3.4% decline. Four deals involving 20,385 shares were executed.
  • Last Wednesday, Trident Estates plc announced the approval of the annual report and consolidated financial statements for the financial year ended January 31, 2020. These shall be submitted for shareholders’ approval during the forthcoming Annual General Meeting, to be held when the situation permits. The board has resolved not to recommend the declaration of a dividend at the AGM.
  • The company report that revenue was up by €0.1 million as it amounted to €1.2 million. The group’s operating profit improved by 68% as it amounted to €0.5 million, arising from higher revenue and lower costs. Profit before tax declined by 70% to €0.3 million when compared to the previous financial year’s figure. No fair value gains on investment property were recorded during the year, versus the €0.8 million posted in the previous year.
  • Borrowings stood at €2.2 million, representing a partial drawdown of the secured long-term facility from a third party bank granted to part-finance the Trident Park project, of which €26.3 million remain available and unutilised.  The group’s equity was up by 39% to €52.5 million, mainly reflecting the €15 million increase in share capital resulting from the rights issue that took place in November 2019.
  • The equity did not record any trading activity during the week.
  • On May 8, after market close, MaltaPost plc announced that during these difficult and unprecedented times, the company has continued to keep the health and safety of all its employees at the top of its priority list in strict adherence to the guidelines issued by Government and the National Health Authorities from time to time. This underlying principle has been extended throughout their network of offices in Malta and Gozo where preventive measures continued to be implemented also for the benefit of all their customers.   Delivery of postal services has been uninterrupted, with only minor disruptions, mainly in deference to consideration of health and safety issues.   However, other areas of operational activity have been significantly affected, not least by the sharp decline in flight connections to and from Malta. The company added that this unplanned interruption is having a negative impact on some of the more important revenue streams and which are in part being rigorously mitigated through the efficient and judicious management of costs, together with other related efficiencies.
  • The Company continues to focus attention on the Risk Management strategies which it has in place in order to minimise the related adverse effects on the Company’s stakeholders, and it is however reassured by the loyalty and dedication of all its staff members who continue to perform well in the face of extremely challenging times.  The board is scheduled to meet on May 29, 2020 to consider and approve the interim financial statements for the six months ended March 31, 2020.
  • The equity did not trade during the week.
  • The MSE MGS Total Return Index lost 0.3% as it closed at 1,107.03 points. In the local sovereign market, 15 issues were active, of which two registered gains while 11 lost ground. The 4.65% MGS 2032 (I) registered the best performance with a positive 4.53% change in price, to close at €151.00. Conversely, the 5.1% MGS 2029 (I) was down by 3.05% to €140.58.
  • The decline in the local market was a reflection of what was happening globally. Comments by the Chair of the United States Federal Reserve, Jerome Powell that the economy requires more support, impacted the markets negatively. Likewise, the European market sentiment was dampened after economic data was published. The Eurozone gross domestic product (GDP) plummeted 3.8% during the first quarter of the year. German GDP plunged 2.2% during the first three months when compared to the last quarter of 2019, resulting into the sharpest decline since the financial crisis.
  • The MSE Corporate Bonds Total Return Index advanced by 0.5% to 1,065.03 points. Out of 43 active issues, 18 headed north while another 12 closed in the opposite direction. The best performer was the 5.5% Mediterranean Investments Holding plc Unsecured € 2020 as it closed 5.27% higher at €100.01. On the other hand, the 4.85% Melite Finance plc Unsecured 2028 dropped by 8.39%, ending the week at €98.00.
  • In the Prospects MTF market, six issues were active. The 5.75% Pharmacare Finance plc Unsecured EUR Bonds 2025-2028 was the most liquid as total turnover stood at €16,119. The bond closed unchanged at €99.50.
Upcoming Events
Best Performers:
1. MSC+3.11%
27 MAY 2020MT: Simonds Farsons Cisk plc – Results2.
29 MAY 2020MT: MaltaPost plc – Interim Results3.
29 MAY 2020MT: Medserv plc – Results
04 JUN 2020EU: ECB – Monetary Policy MeetingWorst Performers:
10 JUN 2020US: FED – Monetary Policy Meeting1. MDS-12.50%
2. GO-6.74%
3. HSB-6.37%

 

 

 

Price (€): 15.05.2020Price (€): 08.05.2020Weekly Change (%)2020 Performance (%)
MSE Equity Total Return Index8,169.326 8,366.239-2.354-15.042
BMIT Technologies plc0.4600.480-4.17-11.54
Bank of Valletta plc1.0401.050-0.95-1.89
FIMBank plc (USD)0.4700.4700.00-21.67
GlobalCapital plc0.2300.2300.00-17.86
Grand Harbour Marina plc0.7500.7500.0036.36
GO plc3.6003.860-6.74-15.49
Harvest Technology plc1.4601.4600.00 -2.67
HSBC Bank Malta plc0.9551.020-6.37-26.54
International Hotel Investments plc0.5700.590-3.39-31.33
Lombard Bank plc2.1002.1000.00-7.89
Loqus Holdings plc0.0970.0970.0050.39
MIDI plc0.4200.4200.00-22.22
Medserv plc0.7000.800-12.50-36.36
Malta International Airport plc4.9005.000-2.00-28.99
Malita Investments plc0.8900.900-1.11-1.11
Mapfre Middlesea plc2.6002.6000.0020.37
Malta Properties Company plc0.5400.550-1.82-14.29
Main Street Complex plc0.4640.4503.11-22.67
MaltaPost plc1.2101.2100.00-7.63
PG plc1.8501.880-1.600.54
Plaza Centres plc0.9800.9800.00-2.97
RS2 Software plc1.9702.000-1.50-7.94
Simonds Farsons Cisk plc8.2508.300-0.60-28.26
Santumas Shareholdings plc1.3601.3600.00-3.55
Tigné Mall plc0.8500.8500.00-5.56
Trident Estates plc1.5501.5500.000.00

 

 

 

 

* Trading commenced on January 7, 2020.

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. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected].