Financial news

Trading for the mid-week session at the Malta Stock Exchange was characterised with low activity and spread over an aggregate 29 deals. The Index persisted in its negative trend as it declined by 0.33 per cent to close at 2,913 points. The two equities in the financial services sector which were active for the day both registered a decline in price. Conversely, all securities in the government stock segment of the market all ended the day's session with further increases in their value.

Bank of Valletta commenced trading early in the session at the €2.299 level. During the session, a residue balance of 50 odd shares, forming part of a larger order, was executed at the €2.40 level, which momentarily moved the price higher by 10c.

However, parity was restored soon after and the equity even dipped lower, terminating the session weaker by 3c or 1.3 per cent at the €2.27 level on the transaction of a total of 11,303 shares across 11 deals. At the end of the session, 150 shares were best bid at €2.10 while supply of 1,950 shares were left outstanding on the offer side asking for €2.27.

HSBC Bank Malta was also active for the day as the equity also registered a further marginal decline of one-tenth of a cent of share price, to terminate the session at €2.39. Trading activity was spread over five deals and a market consideration of €12,000.

Activity in the fixed interest sector of the market was also lower than usual and spread over three government stocks and four corporate bonds. The best performer in the government stocks was the 5% MGS 2021 (I) which registered an increase of 65 ticks with activity spread over a single deal for 100,000 nominal.

On the corporate bond market, the 7.5% Mediterranean Investment Holdings was the most significant gainer for the day, recovering the full 250 ticks the security lost during Tuesday's session to close back at €102.50 over 10,000 nominal.

Weekly UK economic review

There were no signs of any positive data from the United Kingdom, as even inflationary figures failed to slow as much as expected.

The reason for the limited fall in headline Consumer Price Inflation from 3.1 per cent to 3.0 per cent (the consensus stood for 2.7 per cent) was predominantly due to the rise in the core figures (that is excluding food and energy) that rose from 1.1 per cent to 1.3 per cent. This pace is unlikely to be sustained as it was also stated in the Bank of England's (BOE) Inflation Report.

The BOE gave a strong signal that the Monetary Policy Committee is intending to implement significant further policy easing, with quantitative easing perhaps set to start as soon as next month. The forecast for Gross Domestic Product growth has been pulled down sharply, with growth now bottoming at around -4 per cent later this year. The Governor also repeated that the fall in rates already seen, combined with the sharp fall in the pound, will provide the economy with strong support. The BOE also expects the huge amount of spare capacity in the economy to keep price pressures very weak for a prolonged period.

Meanwhile, the unemployment figure came in just shy of two million. The number of job seekers moved up to 1.97 million in December, 150,000 more than three months earlier, taking the unemployment rate to 6.3 per cent.

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.