MSE index and BoV up in first week of trading

After a positive start for global equity indices on the first day of trading in 2009, the first full week of trading was back in the red as major European indices lost between two to nearly four per cent, while in the United States the Dow Jones Industrial Average lost just under five per cent and the S and P 500 index lost over four per cent. Germany's Xetra Dax was down 3.8% as data showed the first rise in Germany unemployment figures. However, the FTSE Eurofirst 300 gained 1.1% on the week.

On Friday, the markets reacted negatively after it was announced that the United States non-farm payrolls dropped by 524,000 in December, bringing the total job loss in 2008 to 2.6 million, the biggest drop since 1945. However, the US dollar edged higher on Friday against the euro as investors speculate the decision by the European Central Bank next week on the future direction of interest rates in Europe.

Meanwhile in the United Kingdom, the Bank of England (BoE) cut interest rates by a further 0.5 percentage points to 1.5%, a 315-year low. The BoE warned that "the world economy appears to be undergoing an unusually sharp and synchronised downturn".

The price of oil was back in the news this week as US crude traded above $50 a barrel on concerns of production cuts, but dropped back sharply, falling below $40 on Friday.

In Malta, the Malta Stock Exchange index closed at 3,227.670, a gain of 0.61% in the first week of trading of 2009. During the week, seven equities were negotiated, with two closing in positive territory, four closing in negative territory and one remaining stable. Bank of Valletta plc gained most territory with a 3.75% increase of its share price to €3.60, while Fimbank plc lost most ground as its share price dropped by 1.76% and closed at $1.45.

On Monday and Tuesday, the MSE index appreciated by 0.473% and 0.096% respectively, but on Wednesday it fell by 1.176%. On Thursday, the index increased by one per cent as a positive performance by HSBC Bank Malta plc and Go plc outweighed losses incurred in the share price of Bank of Valletta plc. On Friday, the index increased by 0.223%.

During the week, 266 deals were registered on the stock exchange for a turnover of over €9.6m. In the equity market, 121 transactions were carried out for a total value of €311,177. In the corporate bond market, 48 transactions for a total value of €450,255m were executed, while in the government bond market, 73 transactions were executed for a value of over €1.8m. Twenty-four transactions were carried out in the Treasury Bills market for a value of over €7.1m.

Trading in the corporate bond market was spread over 16 bonds while in the government bonds trading was executed over 19 bonds. This week, the bond market suffered dramatic losses as most traded corporate and government stocks lost value although on Friday all traded government stock except one increased in value. Long dated bonds suffered most with the 5.5% MGS 2023(I) falling from €113.69 to €107.44.

During the week, Bank of Valletta plc was the best performer, appreciating by 3.75% to €3.60 as 70 deals were executed for a total volume of 48,301 shares for a total value of €173,034. On Monday, BoV was the only positive performer, which pushed the index higher as its share price appreciated by 3.17% to €3.58. On Tuesday, the bank was the most active equity as its share price increased by 0.56% to €3.60. On Wednesday and Thursday, the share price dropped by 0.28% and 0.84% respectively, while on Friday, it increased by 1.12%, making it the best performer of the day and the week as it closed at €3.60.

BoV shareholders as at tomorrow will be eligible to the one-for-five bonus share issue.

On Monday, Fimbank plc lost most territory as its share price dropped by 1.76% to $1.45 on a single deal of 1,800 shares. On Tuesday, the share price remained stable at $1.45 on a single deal of 600 shares.

Go plc was a positive performer during the week as its share price increased by 0.46% to €1.76 when 13,463 shares were negotiated across 28 deals for a total value of €23,638. On Tuesday, the share price fell by 0.06%. On Wednesday, it continued to lose ground as it dropped by another 0.06%. However, on Thursday and Friday the share price appreciated by 0.17% and 0.40% respectively, closing at €1.76.

The share price of HSBC Bank Malta plc remained stable at €2.70 as 36,422 shares changed hands across 28 deals for a total value of €96,803. On Monday, the share price dropped by 0.04% and on Wednesday, the equity lost most territory with a drop of 3.67% to €2.60 as 17,300 shares changed hands across nine deals. However, on Thursday, HSBC appreciated by 3.85% to €2.70 as 2,510 shares were exchanged across six deals. On Friday, the bank's share price retained the previous day's level even though 13,892 shares were negotiated across six transactions.

Malta International Airport plc transacted on Monday, Tuesday and Friday, falling 0.08%, 0.04% and 0.28% respectively.

On Monday, a single deal of 6,000 shares led to a drop of 0.13% in the share price of RS2 Software plc, which closed at €0.799.

On Tuesday, Maltapost plc lost 0.12% as its share price closed at €0.817 on two deals for a total volume of 2,021 shares.

Next Tuesday, the announced Midi plc bond issue will open to the public. The 10-year bond issue of €30m bonds is available euro and in sterling and carries a coupon of seven per cent per annum and are due to be redeemed on December, 15, 2008. The company reserves the right to increase the bond issue by up to an equivalent of €10m.

The bonds will be unsecured and unsubordinated obligations of Midi and will rank pari passu without any priority or preference with all other present and future unsecured and unsubordinated obligations of Midi.

The company's principal business is the project of development of the emphyteutical land comprising Tigné Point and Manoel Island. The proceeds from the bonds, which net of commissions and expenses are expected to amount to €29.1m will be used mainly to finalise the construction of Tigné Point.

This article, which was compiled by Jesmond Mizzi Financial Services Limited (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services by the MFSA. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact JMFS at 67/3, South Street, Valletta or on Tel: 2122 4410 or e-mail jmizzi@jmfs.net.