Financial news

The Malta Stock Exchange closed the first day of a shortened week due to today's public holiday, in red as the Index dropped below the psychological level of 3,000 points. Trading activity in the equity market was higher than usual as a total of 47 deals were struck over seven listings.

Five equities registered a loss in price with the largest listing in terms of market capitalisation incurring the most significant loss.

HSBC Bank Malta was the most actively traded equity for the day as a total of 20 deals were exchanged for a market value of €52,449. The equity lost a further a 10c or 3.9 per cent to close the day at €2.46, which is a new low for the financial services company.

Similarly, Lombard Bank Malta also decreased by a further 10c in share price as the equity closed at €2.55 over four deals for a value of €13,005.

Highest turnover was registered in Go as a total of 20,700 shares were exchanged over 10 deals. The quadruple play communication company also registered a loss in price of five cents to end the session at €1.70.

Bank of Valletta was another laggard on the day as the banking equity registered a decline of 4c in share price over a total of nine deals to end the day at €2.46, which is also a new low for the Bank. Trading activity was spread over 14,850 shares for a market value of €36,531.

Plaza Centres was also active for the day as activity was restricted to a single deal with a total turnover of 1000 shares. This resulted in an overall decline of eight cents in share price to terminate the session at €1.60.

FIMBank Malta was the only gainer for the day as the listing increased by three cents over one deal to close at €1.50, registering a new high for this year. Datatrak Holding registered no change in prise as it closed at €0.19. This was the first time the listing traded for the year.

In the fixed interest sector of the market, trading activity was relatively muted as activity was spread over just two government stocks and five corporate bonds. The best performance for the session was registered in the 4.8 per cent MGS 2016(II) as the bond increased by 78 ticks over 18,635 nominal.

Weekly US economic review

Employment figures in the US were horrible, providing further evidence of a sharp decline in economic activity in the current quarter. Nonfarm payrolls dropped more than expected at 598,000 in January and December figures were also revised lower to -577,000 compared to a previous figure of 524,000, with unemployment rate rising to an alarming 16-year high of 7.6 per cent.

Temporary hiring, a leading indicator of future labour demand, fell for the 13th consecutive month, down 76,000.

Over the past three months, the economy has shed an average of nearly 600,000 jobs a month, the biggest decline in employment since the end of the World War II.

On the manufacturing front, the manufacturing Index issued by the Institute of Supply Management was slightly above expectations, as the figures released came in at 35.6 versus an expected 32.9. However, this level is still consistent with a declining Gross Domestic Product.

Pending home sales staged a rebound in December, suggesting that lower mortgage rates may be boosting activity. On the other hand this may be simply reflecting a surge in sales of foreclosed properties at heavily discounted prices.

In a normal market environment, an increase in savings rate would be very much welcomed, but in the current financial market stagnation, consumption is a critical factor. Savings rates rose from 2.8 per cent in November to 3.6 per cent in December, this once again bodes negatively for current GDP figures.

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.