Financial news

During the mid-week session at the Malta Stock Exchange, trading activity increased considerably when compared to the single equity transacted on Tuesday as four companies attracted trades. This activity, however, failed to stem a declining index as it fell by 0.21 per cent to close at 3,205 points. All components ended the day on negative ground with the only listed insurance company incurring the most notable loss for the day.

Bank of Valletta was by far the most actively traded company as 17 from a total of 23 deals were transacted by the financial services company alone for a market value of €62,248. The bank was also the most liquid equity as a total of 23,893 shares were swapped, as the price fell by a marginal 1c or 0.37 per cent to terminate the session at €2.69.

Similarly the share price for HSBC Bank Malta also made a negligible decline of half a cent; however, trading activity for the bank was spread over a single deal for a total turnover of € 4,991 and a closing price of €2.82.

Trading activity in Go was spread over two deals as the quadruple play communication company shed a further one cent to end yesterday's session at €1.85.

Middlesea Insurance was the worst performer in the equity market as the Insurance company lost five cents over three deals to end the session at €2.50. This was the first time the listing traded for the year.

In the fixed interest sector of the market activity was spread over eight government stocks and two corporate bonds.

The 7% GAP Developments 2011/13 was the best performer of the day as the corporate debt issue rose by 450 ticks as 53,750 nominal were transacted over 10 deals. The 7% MIDI 2016/18 denominated in euro registered no change in price.

The 5.10% MGS 2014 (III) was the most actively traded government bond as 146,659 nominal were exchanged over three deals to close 118 ticks less at €105.53.

Weekly UK economic review

The United Kingdom is now officially in recession. Economic activity declined for a second consecutive quarter in the last three months of last year. The drop registered tallied to 1.5 per cent quarter on quarter. This takes the total output loss from the peak to 2.1 per cent so far, which is already within touching distance of the 2.5 per cent peak to trough decline seen in the 1990s recession.

In the meantime the Bank of England (BOE) together with the UK government continued to pour further stimulus to the market. The BOE will spend £50 billion to buy up a range of assets, like corporate bonds, in order to lower cost of credit for firms. At this stage these purchases will be funded by the issuance of further government debt, so the BOE will not avail itself of its printing press, at least not yet. Nonetheless actions taken so far have failed to provide any support to the sterling as it plunged to multi-year lows.

On the housing front, approvals for new home loans in Britain rose in December from a record low according to data issued by the British Bankers Association (BBA) on Monday. Unfortunately, the data issued was not good enough to signal any turnaround as figures are still grounded at very low levels. The BBA said that 22,051 mortgages were approved last month, up from November's record low of 17,339 but almost 50 per cent lower than the same month last year.

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.