In its first week of trading for 2015, the Malta Stock Exchange (MSE) index gained a marginal 0.28 per cent after failing to sustain a five-month high of 3,380.817 points reached on Tuesday. This was mainly the result of fluctuations in shares of Bank of Valletta plc (BOV) and HSBC Bank Malta plc, and due to a drop in the share price of International Hotel Investments plc (IHI). The index’s positive weekly performance was buoyed by increases in the share prices of Go plc and Malta International Airport plc (MIA).
Turnover in the more volatile equity market stood at €1.11 million, as 17 issues were negotiated. This was in stark contrast to the €473,000 traded during the previous holiday-shortened week. Almost half of the traded securities closed the week unchanged, five outperformed the index’s performance, while another four fell out of favour.
Meanwhile, trading activity in the sovereign debt market shot up to €28.05 million, with issues having the longer maturity dates accounting for most of the deals, as yields were further compressed.
BOV and HSBC shares accounted for almost 60 per cent of the trading value in the equity market. These two equities drove the index higher at the beginning of the week, as they touched multi-week highs.
The highest turnover for the week, worth €433,000, was in BOV shares. An intra-week high of €2.30 faded away by the end of the week, as the banking equity’s share price settled back to €2.24. Similarly, by Tuesday’s trading session, HSBC shares reached a 10-week high of €2.03, but ended the week at €2, a 2.6 per cent rise.
Meanwhile, shares of Lombard Bank Malta plc retreated by 2.7 per cent, to close at a one-month low of €1.75. This drop occurred after four transactions of 8,023 shares.
In the same sector, 13 deals of 27,226 shares lifted the share price of Middlesea Insurance plc by 0.6 per cent to an 11-week high of €1. Meanwhile, Fimbank plc shares traded flat at $0.60 as two deals of 12,300 shares were negotiated.
Following the strong performance of Go plc shares in 2014, the telecomms company ended its first week of the year up by a further 1.8 per cent to a two-month high of €2.595 after 13 deals worth €61,000.
Shares of MIA retouched their all-time high of €2.40 in Monday’s session, but then contracted to €2.361 by Friday’s session. The airport operator’s share price rose by 0.5 per cent over the week after a total of 24,072 shares changed hands in 15 transactions.
One other gainer for the week was Malita Investments plc, whose shares settled at yet another record high of €0.642. It registered a marginal gain of 0.3 per cent as three deals of 64,000 shares were struck.
A 1.6 per cent decline in the share price of IHI – the third largest issue on the MSE by market value – hindered the index’s positive performance, albeit it was active on thin volume, worth €9,000.
The surge in volume in sovereign debt securities was primarily attributable to an increase in buying interest in long-dated issues
Grand Harbour Marina plc shares closed at a nine-month low of €1.82 as three deals of 7,300 shares cut the equity’s price by 2.4 per cent.
Heading the list of fallers were shares of Midi plc, as selling pressure drove the equity’s price down by 12.5 per cent, to retouch their all-time low of €0.21. The equity was active in 10 deals of 241,786 shares.
Despite €65,000 worth of trading in postal services company Maltapost plc, the equity’s price remained intact at €1.20, as it failed to maintain an intra-day high of €1.211.
Likewise, Crimsonwing plc closed unchanged at €0.86 as 59,812 shares changed hands in eight deals.
The week’s other non-movers were Loqus Holdings plc, Santumas Shareholdings plc, Medserv plc, and Tigné Mall plc, all of which experienced relatively thin trading.
Out of the 29 issues traded in the corporate bond market, 21 rose in value, three shed value, while five closed unchanged. The recently issued six per cent Mediterranean Bank plc subordinated unsecured € 2019-2024 jumped by 3.9 per cent to close at €106, with a yield-to-worst – if the bond is called in its first callable year – of 4.6 per cent. On the other hand, the five per cent Hal Mann Vella Group plc secured bonds € 2024 was the most traded issue, accounting for 31 per cent of total turnover.
Meanwhile, the surge in volume in sovereign debt securities was primarily attributable to an increase in buying interest in long-dated issues. In fact, the four issues maturing between 2032 and 2034, in aggregate, accounted for over 72 per cent of the €28.05 million in total trading value.
Yields across such stocks have been pulled down to around three and 3.2 per cent. This follows a week of deflationary concerns in Europe, as international oil prices continued to plummet, while investors await the European Central Bank to start on a quantitative easing programme at its upcoming January 22 meeting.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Advisors Ltd, 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 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 at 1/2 St Joseph High Street, Ħamrun or on Tel. 2122 4410 or e-mail jesmond.mizzi@jesmondmizzi.com.