The previous week's slight gains on the local stock exchange were nearly nullify last week as sellers reasserted control, particularly in the first two sessions. Thereafter, the week progressed uneventfully. However, it is interesting that last week's falls were backed by only half as much trading volume as that of the previous week.
A fall in the volume of trading may be interpreted as falling conviction but is also indicative of caution. Nevertheless, the local market remains totally detached from the severe volatility in worldwide equity markets. Most indices abroad gained sharply last week following the previous week's rout, backing off once again on Friday due to continued concerns over European debt burdens and its impact on global economic recovery.
Trading in local corporate bonds last week increased considerably, totalling nearly €733,000 in value. Most prices remained unchanged but both the 6% Gasan Finance Company plc 2014-16 and the 4.8% BoV plc 2020 bond lost some ground, with the former shedding just under 3% and the latter losing nearly 2%.
During the week, both Eden Finance plc and Simonds Farsons Cisk plc announced the issue of two bonds, the former being a 6.6% bond maturing between 2017 and 2020, and the latter being a 6% bond maturing between 2017 and 2020. Proceeds from both bonds will primarily be used for redemption of previously issued bonds maturing later this year.
Unlike local equities, Malta Government Stock prices continue to mirror the extreme volatility in markets abroad, with most MGSs prices falling, following weeks of choppy oscillations. The longer-term stocks suffered most last week. A total value of €8.7 million was traded.
Last week the Treasury announced the prices for the upcoming issue of three MGSs. The 3.75% MGS 2015 (VI) FI will be issued at €102.80, therefore yielding 3.19%, the 4.6% MGS 2020 (II) FI will be issued at €102.50, with a yield of 4.29%, and the 5.25% MGS 2030 (I) will be priced at €99.50 with a yield to maturity of 5.29%.
The value of trading in Treasury Bills last week amounted to almost €800,000.
The Malta Stock Exchange index closed Friday's session at 3,506.881, shedding a mere 0.87%. The major local banks hampered the broader market, particularly on Monday, with the index failing to make up for this loss in the remaining four sessions.
The volume of shares traded fell to 290,535, with most of the reduction occurring in the two major banks. Fourteen equities were traded last week, three of which outperformed the market and ending the week in positive territory. Six equities edged lower while the prices of the remaining five remained unchanged.
Bank of Valletta plc was the most widely traded equity last week with 63 deals involving nearly 75,000 shares, a slight fall from the previous week's volume. For the second week in a row, sellers dragged BoV's price southwards, at least for the first two trading sessions. The share price fell 2.10% from €3.33 to €3.26 by Friday.
Similarly, HSBC Bank Malta plc's equity price plunged on Monday, and improved marginally during the rest of the week to end Friday's session down 0.82%. Volume traded halved to just over 32,000 shares last week as conviction among investors dried up. With last week's decline, HSBC shares have lost 6.04% in value year-to-date while BoV's share price is up 5.30%.
By sharp contrast, Maltapost plc's share price powered on last week, gaining 2.33% and reaching new highs for the year. Its year-to-date performance has improved to a very attractive 25.7%. These unrelenting gains continue to be backed by decent volumes week after week.
Last week the company issued its review of performance for the six months up to March 31. Pre-tax profits came in at €1.86m compared to €1.92m for the same period in 2008-9. The main factors underlying the positive performance were marginal increases in revenues, and decreases in expenses. On the other hand, an increase in employee benefits expense and depreciation reduced earnings.
The board of directors' outlook remains generally positive, as a deterioration in traditional mail continues to be substituted by increases in international inbound mail as a result of growth in internet mail-order. The company also intends to further diversify its business into low-cost financial services.
Middlesea Insurance plc's share price rose yet again last week, gaining 2.74% to push the price to the psychological upper limit of €0.75, a level it has not been able to surpass over the past three months.
Last week Malta International Airport plc saw some profit-taking following a decent climb over the previous weeks. The share price shed 3.38% to close at €3.14 by Friday. On the last day of trading alone it shed 1.91% on a mere 1,400 shares. Similarly, Lombard Bank plc shares lost 1.69% in value, resuming the downward trend it started in January. Nevertheless the year-to-date losses amount to a moderate -3.01%.
Last week saw a larger than normal volume being traded in RS2 Software plc equities. A total of 28,150 shares were dealt in six transactions on Tuesday. However, the price remained unchanged at €0.48. Similarly, equity prices of Grand Harbour Marina plc, Go plc, Medserv plc and Crimsonwing plc remained unchanged at the previous week's prices.
Minimal trading resulted in some hefty price movements last week in both Loqus Holdings plc, which fell by 7%, and 6PM plc, which gained 3.54%. Plaza Centres plc's share price also fell 1.86% last week on scant trading.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Ltd (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed by the MFSA. 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 JMFS at 67/3, South Street, Valletta, on Tel. 2122 4410 or e-mail jmizzi@jmfs.net.