MSE index rebounds as 7 equities register gains

After steadily declining for nearly three weeks, the Malta Stock Exchange index rebounded slightly last week, nearly reclaiming all the ground lost in the first week of February. There was a positive tone throughout the holiday-shortened week, with the index rising in every session to close 2.54% higher at 3,826.691 points.

The MSE's performance was generally in line with that of major international equity indices, most of which saw a brief comeback following weeks of downward pressure.

The volume of trading last week was much lower than the previous one due to the national holiday on Wednesday and somewhat lower than that reported in the initial weeks of the year. Nearly 237,000 shares were traded, spread out among 14 equities, seven of which reported gains; one equity lost market value with the rest remaining unchanged.

Notwithstanding some market-moving company announcements made during the week, investors did not focus on specific equities, possibly preferring to adopt a 'wait-and-see' attitude to digest the news before deciding on a particular direction in their daily trading.

The largest volume of trading occurred in Malta International Airport plc, with 38,400 shares changing ownership in two sessions. This is the highest volume recorded in this equity for nearly a year. The price was very volatile, jumping from €2.90 to €3.09 on Monday, before retreating to €3.05 in Friday's session. The bulk of volume backed the fall. Notwithstanding the retreat, MIA is still up 5.17%, making the equity the best performer of the week. MIA announced on Thursday that it had registered an encouraging 7% increase in passenger movements in January compared to same month last year.

HSBC Bank Malta plc shares experienced a tepid recovery last week following the losses of previous weeks. The share price reached a weekly high of €3.88 on Friday, ending the session at €3.85, a 2.4% increase from the previous week, snapping the correction that started in mid-January. A total of 37,525 shares were traded, mostly in Thursday's session during which the price rose from €3.819 to €3.85.

Despite a choppy start, Bank of Valletta plc shares ended the week with a healthy 4.65% gain to climb to €3.40, thereby retracing all the previous week's losses. However, the total volume of shares traded in this equity amounted to a mere 28,855 shares, which was somewhat lower than usual in this equity. This possibly indicates a certain indecision regarding direction, particularly given the very unsettled international markets - a notable influence on BoV's performance. The bank announced last week the issue of €50 million 4.8% subordinated bonds redeemable in 2020 issued at par and subject to an over-allotment option of up to a further €20m.

Go plc equities struggled to find direction last week, with the share price spending most sessions drifting aimlessly. The bullish sentiment surrounding this equity seems to have run out of steam following the huge gains since the beginning of October 2009. However, the signals are still not strong, resulting in little or no change to its equity price. The share price rose by a mere €0.001 to €2.30, with volume amounting to just over 37,000 shares.

Although the share price of Middlesea Insurance plc (MSI) ended the week 2.7% up, this slight improvement on moderate volume masks important and radical developments. In the week's first two sessions the equity soared rapidly from €0.73 to €0.81, a 10.9% jump. On Thursday, the company announced that its Italian subsidiary, Progress Assicurazioni SpA, had applied to the Italian regulatory authorities to cease writing business and to start winding up the company due to the "very serious adverse developments affecting the Progress operations".

It added that notwithstanding the intense measures taken by MSI, the subsidiary's losses worsened, exhausting the parent company's financial support. Hence it could not continue operating in conformity with Italian law.

Following the announcement, MSI's share price fell from to €0.75 at which it closed the week, with a significant pick-up in volume traded in Friday's session. However, at 31,677 shares the total volume traded over the week was fairly subdued.

Maltapost plc's price improved 2.67% on Monday on decent volume but retraced this gain the following session, and ended the week at €0.75. On the other hand, Fimbank plc's share price spiked by 3.51% to reach the $1.18 price yet again.

International Hotel Investments plc's share price increased 2.56% to reach €0.80, backed by a moderate volume of 17,128 shares, thereby continuing the zigzag pattern of this company's share price over the past months.

Simonds Farsons Cisk plc, Plaza Centres plc, Global Capital plc, 6PM plc and Medserv plc remained unchanged last week, with trading in each of equity varying between 1,000 and 3,000 shares. On the other hand, Grand Harbour Marina plc shed nearly 7% on minor volume, making it the worst performer of the week.

Crimsonwing plc announced last week that the company is experiencing increased demand for its software and services solutions. It also said that although the recession affected its markets last year, revenues held steady and compare favourably with the previous year. The was no trading of shares in this company last week.

Nearly €970,000 worth of local government stocks was traded last week. Most of the 15 issues traded lost value due to rising yields internationally. Similar to last week, 18 local corporate bonds were traded but the value of trading fell to €530,000.

Last Thursday, the Treasury announced the prices of the new Malta government bonds due to open tomorrow, with the 3.75% 2015 MGS priced at €100.25, and the 4.6% 2020 MGS FI to be priced at €100.

There were two trades in the Treasury Bill market valued close to €1.2m.

This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Ltd (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed 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, on Tel. 2122 4410 or e-mail jmizzi@jmfs.net.