Financial news

The equity market opened the week on a negative note as the MSE index terminated lower for the sixth consecutive session, once again dragged lower by the two major commercial banks listed on the Exchange. As a result the MSE index closed weaker by 0.52 per cent to close the session at 4,688.787 points.

Bank of Valletta plc continued on its negative performance with the share price moving down a further €0.05 to close the day at €5.60. The share immediately opened at the €5.65 level before selling activity saw the equity drop €0.15 to €5.51. However, towards the end of the session the share price moved up €0.09 to settle at yesterday's closing price. By the end of the session a total of 25,031 shares, carrying a market capitalisation of €139,802 were exchanged across 45 trades.

HSBC Bank Malta was the day's biggest loser with the share price losing 1.10 per cent or €0.051 to close the session at €4.599 as just 9,580 shares were exchanged yesterday across eight transactions.

After the session, the Bank's board of directors approved the annual results for the financial year ended December 31, 2007. For the year under review, the Bank and its subsidiaries generated a profit before tax of €114.7 million, an increase of €18.3 million or 19 per cent compared to 2006. The board of directors is also recommending the payment of a final dividend of €0.148 gross per share payable on April 29, to shareholders who are on the company's register of shareholders as at February 29.

Trading activity in Crimsonwing plc remained strong with 13,350 shares changing hands lowering the price by just €0.007 to close at €0.59.

Plaza Centre was the day's top gainer with the equity gaining €0.089 or 5.56 per cent to close the session at €1.689. Similarly, FimBank shares gained a minimal of US$0.00,9 to close the session at US$2.00,9.

Demand for Go shares continued to pull the price higher by a further €0.01 up to €3.06. Go's board of directors is scheduled to meet on Wednesday, February 27 to consider and approve the Company's Audited Financial Statements for the financial year ended December 31, 2007.

Maltapost remained the most liquid equity with a grand total of 45,484 shares being swapped throughout the session. The equity closed higher by the slimmest of margins to terminate the session at €0.666.

Elsewhere in the market, trades in Grand Harbour Marina and Malta International Airport did not alter their previous closing price of €1.73 and €3.18 respectively.

US economic review - weekly round-up

The highlight over the past week was the Federal Reserve chairman's testimony to the Senate Banking Committee. Ben Bernanke stated that the Fed stands ready to deliver further monetary policy easing in the coming months, although the tone of the statement indicated that the pace of easing will probably slow going forward. The Fed is still concerned on the downside risks to growth and therefore more rate cuts are likely.

The recent 225bp cuts are yet to leave their mark on the economy, moreover as the monetary base has not reacted to the easing of monetary policy. The Fed is still hoping that the economy will be able to avoid recession although former Fed chairman Alan Greenspan suggested otherwise in comments made last week.

January retail sales figures were up 0.3 per cent, but core spending (excluding autos and gasoline) fell by 0.3 per cent. In fact, over the last year, core retail sales have grown just 2.6 per cent, a level that in the past has been consistent with recession. Fortunately, the upcoming tax stimulus package should help lift consumer spending next quarter and possibly aid the economy stay out of recession.

This article has been prepared by Bank of Valletta p.l.c. (the Bank), which is licensed to conduct investment services business by the MFSA, for your general information only. This information is not a solicitation or offer by the Bank to acquire or sell securities. Nor does it constitute any form of advice by the Bank. Appropriate advice should be obtained before making any such decision. Past performance is not necessarily a guide to future performance and the value of your investments may fall or rise.