Financial news

The losses being suffered by shares in the banking sector continued to put pressure on the Malta Stock Exchange yesterday, as the index lost another five points, or more than 0.1 per cent, to close at 3497.401 points.

Despite the loss to the index, Maltapost plc managed significant gains on the day, moving up 3c5, or 4.6 per cent, to finish the session at €0.80 and closing as the biggest mover on the day in extremely heavy volume of 151,064 shares in 28 trades. Before trading yesterday the company announced that its board of directors will be meeting on May 13 to consider and approve its interim results for the six months ending March 31.

The other gainer on the day was Bank of Valletta plc, whose shares were up 2c3, or 0.7 per cent, to close at €3.318 in 22 trades of 33,985 shares.

Yet, despite BOV's gains on the day, the banking sector continued to disappoint investors. HSBC Bank Malta plc lost 2c, or almost 0.7 per cent, to close at €3.08, in nine trades of 4821 shares while FIMBank plc also lost 2c, or 1.8 per cent, to close at US$1.07 in six trades of 11,850 shares.

Other shares to trade, yet failing to register a change in market price were Go plc, which closed at €2.175 in eight trades of 25,000 shares and Medserv plc which ended at €4.30 in two trades of 11,500 shares.

Weekly US economic review

In the United States, the Federal Open Market Committee minutes highlighted that policy makers saw an inflation pressure slowdown during March. The Fed kept interest rates at their record low, however saying that it is not restricted from taking any action if needed, despite the pledge of keeping the main rate low for "an extended period of time".

On a positive note, wholesale inventories during February in-creased to their highest level since October 2008, increasing by 0.6 per cent following an upwardly revised 0.1 per cent rise the previous month. This topped market expectations of a 0.4 per cent rise, which may suggest a stronger growth for the first quarter of this year. On the contrary, consumer credit declined for the 12th in 13 months which shows that consumer spending may be limited until job prospects improve further. This has fallen by $11.5 billion (equivalent to 5.62 per cent annual rate) during February, the most in three months, which reversed the prior month's surprise increase of $10.6 billion.

In the meantime, the US reported a budget deficit for the 18th straight month in March. During this month government spending exceeded its revenue by $65.4 billion, compared to a shortfall of $191.6 billion during the same month last year. The Treasury Department said that the budget gap for the fiscal year 2010 stood at $716.99 billion, compared to $781.39 billion for the fiscal year 2009. Finally, the trade gap widened by 7.4 per cent during February to $39.7 billion, while the trade deficit with China was the smallest since last March as this widened to $16.5 billion compared to $14.2 billion in 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.