MSE Trading Report for Week ending 29 July 2022
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The MSE Equity Total Return Index (MSE) closed lower by 0.4% at 7,750.833 points. Out of 26 active equities, 12 headed north, while another 11 closed in the red. During the week, turnover more than doubled to €0.7m, up from €0.3m last week. Since the beginning of the year, the MSE is down by 5.5%.
Last Wednesday, Malta International Airport plc (MIA) approved the group’s interim financial statements for the six months ended June 30, 2022.
MIA welcomed 2.3m passengers in the first half of 2022, which figure roughly equals the airport’s full-year passenger traffic for 2021. Revenues for the same six-month period amounted to €37.3m, with Q2 revenues contributing 71% of this total, in line with the strong traffic recovery registered in this quarter.
While MIA started witnessing encouraging signs of recovery in the second quarter of 2022, it continues to navigate a very challenging global aviation landscape, characterised by industrial actions, staff shortages and other operational constraints.
In addition to industry-specific challenges, a combination of economic and geopolitical factors, including the steep rise in inflation rates, rising fuel costs, diminished disposable income and the ongoing war in Ukraine, may also have an impact on the demand for travel during the upcoming winter season, which may result in a shift in airline pricing.
Considering MIA’s positive performance for the first six months of the year and the flight schedule that has been secured for the upcoming winter season, the company expects to end the year with approximately 5.4m passengers.
The board did not recommend the payment of an interim dividend. MIA will be in a position to reassess this recommendation at the end of the year when it would know if its traffic and financial targets have been reached.
MIA’s positive interim financial results were reflected in the equity’s share price, as five transactions pushed the equity 0.8% higher to the €6 price level. A total of 16,140 shares exchanged hands, generating a turnover of €96,190.
Likewise, International Hotel Investments plc enjoyed a positive week, as it recorded a 4.2% rise in price, closing at the €0.75 price level. This was the result of three deals involving 18,834 shares.
Meanwhile, four dals of 2,786 Simonds Farsons Cisk plc shares resulted into a 2% increase in price, as it closed at €7.60.
In the banking industry, Bank of Valletta plc (BOV) was the only negative mover, having declined by 5.4%, as 33 deals involving 110,365 shares were executed. BOV closed the week at €0.87, after trading at a weekly high of €0.93.
On Thursday, the board of BOV approved the group’s and bank’s condensed half yearly financial statements for the six-month ended June 30, 2022. BOV registered a loss after-tax for the six months period of €51m.
This result includes €102.7m in net settlement of the Deiulemar litigation which took place in May 2022. Excluding the impact of the Deiulemar settlement, the interim results for the first six months resulted in a pre-tax profit of €26.1m.
The group recorded an increase in revenue of €17.5m, or 15.4% over the comparable period in 2021. This increase came on the back of consistent growth in lending – particularly in home loans, coupled with increased revenues from payments and cards business.
Net interest income (NII) continued to be the main revenue driver with €87.2m, compared to the first half in 2021 of €73.4m, an increase of 18.8%. Furthermore, NII results were enhanced by a one-off alignment of effective interest rates for stepped-up type loans.
Fees and commissions, foreign exchange trading and other income revenues were at €44.1m for the period ended June 30, 2022. This resulted in a €3.7m increase when compared to the same period in 2021 due to solid growth in payment fees and increased cards commission as a result of higher turnover, partially muted by weaker performance in investment services.
Year-to-date operating costs amounted to €87.7m, an increase of €6.2m, or 7.6% compared to the same period in 2021. In Q2 2022, the bank incurred cost associated with external specialist support to embed ESG requirements. Adjusting for this specific non-recurring item, the underlying cost growth was €4.6m or 5.6%.
The board has decided that, notwithstanding the resolution of the Deiulemar litigation and the sustained commercial performance of the bank during the first half of 2022, no interim dividend is being declared.
In the same line of business, APS Bank plc (APS) recorded a positive 0.8% change in price, finishing the week at €0.655. This was the result of 18 deals involving 81,798 shares.
The board of APS met on July 28, 2022 and approved the condensed interim financial statements for the six months ended June 30, 2022. APS registered €1.9m profit before tax at the group level when compared to €12.2m in 2021 and €13.6m profit before tax at the Bank level when compared to €11.5m in 2021.
The group’s revenues remain largely driven by net interest income which grew to €29.8m for the period under review, resulting in 13.2% higher than the comparable figure of €26.3m for 2021. Despite the tight interest rate conditions which prevailed, the growth in the lending book across both personal and commercial credit lines, and to a lesser extent in the syndicated book, created opportunities for spread. Interest payable remained around the same level of the same period in 2021 at €6.9m, evincing the management’s ability to achieve more efficient cost of funding with stable interest pricing on higher deposit liabilities.
Net fee and commission income grew by 35.1% over 2021, reaching €3.8m. This growth is driven by general business activity in loans, payments and cards and a wider customer base which provides new sources of revenue generation.
For the six months under review, the group’s other operating income went into red territory by €6.6m. This was largely due to the recent financial markets instability and rising fixed income yields which negatively affected the investment in the group’s sub funds. These results reflect the performance of major bonds and equity indices, both in Malta and internationally, which have retracted by double-digit figures since the start of the year. Other operating revenues from business operations amounted to €1.6m, representing an increase of €1.1m over the comparative period.
Operating expenses for the six months ended June 30, 2022 were €23m, up by €3.2m or 15.9% on 2021. Main contributors include a higher accrual of €1m in relation to the deposit compensation scheme. Staff costs also increased, reflecting rising labour prices across all levels to attract and retain highly skilled resources. Other increases are noticeable for most classes of insurance, security and certain sub-contracted services. Concurrently, various initiatives are under way to improve efficiency through greater automation, digitisation of records, centralisation of processes from the network and greater use of robotics and new technologies.
The board is recommending an interim net dividend of €1.8m, payable through the issuance of new ordinary shares at the nominal value of €0.25 per ordinary share. The net dividend equates to €0.005 per ordinary share.
Lombard Bank Malta plc (Lombard) and FIMBank plc (Fimbank) were both active on a sole deal each of 6,833 shares and 2,878 shares respectively. Lombard gained 2.7% to its share price, closing the week at €1.90, while Fimbank ended the week at $0.185, up by 1.7%.
In the IT Services sector, three out of four active equities registered a decline in their share price. The only exception was Harvest Technology plc, after a sole trade of 125 shares pushed the share price 3.3% higher to €1.26.
Similarly, BMIT Technologies plc was active on trivial volume which eased the share price by 1.3% to €0.474.
Both RS2 Software plc Ordinary shares (RS2) and RS2 Software plc Preference shares (RS2P) registered a negative movement in their share prices. RS2 declined by 2.6% to €1.50, as a result of three deals of 3,701 shares. RS2P declined to €1.48, translating into a 1.3% change in share price. A total of 10,000 shares were traded over a single trade.
In the property sector, MIDI plc headed the list of fallers as a result of two transactions worth €10,106. The equity closed the week at €0.30, down by 11.8%.
Similarly, AX Real Estate plc registered a 1.8% decline, ending the week at €0.54. A total of 45,000 shares exchanged ownership across three transactions.
Meanwhile Malta Properties Company plc (MPC) closed lower by 0.4% to end the week at €0.496. Four trades of 22,600 shares were executed.
The board of MPC is scheduled to meet on August 10, 2022 to discuss the group interim unaudited financial statements for the six-month period ended June 30, 2022.
No movement was noted in the share price of Trident Estates plc and Malita Investments plc. Both equities were active on a single deal, as they traded at €1.35 and €0.70, respectively.
A sole transaction involving 1,500 Main Street Complex plc shares did not impact the equity’s previous week’s closing price of €0.40.
Mapfre Middlesea plc was also active on a single deal, which eased the share price 0.6% lower to €1.78.
PG plc was the most active, as total weekly turnover stood at €195,715. The share price of the retail conglomerate closed 1.9% lower at €2.10, as 92,875 shares changed hands across seven transactions.
The board of PG announced that it shall be meeting on August 25, 2022 in order to consider and, if thought fit, approve its Annual Report and the audited financial statements for the year ended April 30, 2022.
Oil and gas logistics specialists, MedservRegis plc, joined the list of fallers with a double-digit decline of 10%. Two deals involving 15,000 shares were executed.
Medserv Regis plc submitted an application for admissibility to listing with the MFSA, for a new secured bond issue of €13m.
The company also announced that it intends to effect a pro-rata early redemption payment of €7m to the holders of the €20m Secured and Guaranteed Notes around September 30, 2022. An early redemption notice to this effect will be issued in due course.
Following the early redemption payment, the company intends to redeem the remaining outstanding amount of €13m of the said Secured and Guaranteed Notes from the proceeds of the new bond.
The Early Redemption Payment and the new bond will form part of the company’s re-financing exercise in response to the company’s improved financial position and performance.
MaltaPost plc also closed in the red at €1.06, translating into a 2.8% fall in price. A total of 3,000 shares were traded across two transactions.
Loqus Holdings plc registered the best performance, as five deals pushed the price 181% higher to €0.45.
Two deals of 4,300 Tigne Mall plc shares lifted the share price 6.2% higher, as it closed the week at the €0.69 level.
M&Z plc added €0.005 or 0.7% to its share price, ending the week at €0.755. This was the outcome of a single transactions of 4,000 shares.
The board of M&Z shall be meeting on August 30, 2022 in order to consider and approve the company’s unaudited financial statements for the six months ended June 30, 2022.
Telecommunications company, GO plc, traded at a weekly low of €3, but managed to recoup the loss on Friday, to close 0.7% higher on the week at €3.04. Eight deals involving 19,770 shares were executed.
Plaza Centres plc (PZC) ended the week in positive territory, as it registered a 49% change in price. The equity closed at €0.82, as 16,250 shares were spread over four deals, worth €13,075.
On July 22, 2022, PZC approved its interim financial statements for the six months ended June 30, 2022.
During the first six months of the year, the group generated revenue of €1.4m resulting in an increase of 24.5% on 2021 results, while EBIDTA increased by 33.9% to €1.1m. Profit after tax increased by 73.3% to €0.5m, compared to €0.3m in 2021. During the previous financial period, the parent company, Plaza Centres plc, received an extraordinary dividend of €3.4m from the subsidiary company, TignePlace Limited. During the current period, the group continued with the bond redemption exercise and redeemed a further €1.67m of its unsecured bonds.
The directors do not anticipate a significant change in the group’s performance in the next six months.
The board recommend the payment of an interim net dividend of €250,000 equivalent to €0.0098 per share, which is eligible to shareholders who are on the registrar of members by August 5, 2022.
In terms of IPO activity, Merkanti Holding plc announced that it has been granted approval by the MFSA for the admissibility to listing on the Official List of the MSE of 16,673,333 Ordinary A shares of a nominal value of €3per share by not later than September 30, 2022.
The MSE MGS Total Return Index increased by 1.5% as it reached 953.589 points.
Out of 14 active issues, 12 advanced while just one closed in the red. The 2.1% MGS 2039 (I) headed the list of gainers, as it closed 11% higher at €100. On the other hand, the 2.2% MGS 2035 (I) traded 5.8% lower, to close at €95.18.
The MSE Corporate Bonds Total Return Index added 0.3% to the previous week’s 0.2% increase, closing the week at 1,152.481 points. A total of 56 issues were active, of which 20 registered gains while another 24 lost ground. The best performance was recorded by the 5.9% Together Gaming Solutions plc Unsecured Callable Bonds € 2024-2026 as it closed 3.1% higher at €101. Conversely, the 4% International Hotel Investments plc Secured € 2026 lost 2.3%, ending the week at €100.
In the Prospects MTF market, three bonds were active, generating a total turnover of €27,100. The 4.75% KA Finance plc Secured Callable Bonds 2026-2029 was the most liquid with a total weekly turnover of €18,900.
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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. Jesmond Mizzi Financial Advisors Limited is acting as sponsoring brokers for the upcoming BNF Bank plc bond issue. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]