The Covid-19 pandemic took over the world, and uncertainties for the future still remain as the healthcare system remains under pressure while the vaccine has not reached the masses yet.
However, the positive vaccine results in November gave financial markets much to cheer about.
The MSE Equity Total Return Index posted a 12% decline during the year, as it closed at 8,471.335 points. A sharp decline was registered in March with the outbreak, as the index reached 7,761.132 points.
Sentiment across local equities improved, as local Covid-19 cases were contained and as a number of large cap equities gained ground. However, the positive sentiment did not last long, as various equities turned negative once again.
Yet, similar to its international counterparts, various local equities recovered some of the lost ground, as positive news about potential vaccines were announced in November.
Since then till the year’s last trading day, the local equities’ index gained nearly 20%.
Undoubtedly, Malta International Airport plc (MIA) was among the worst hit companies during such unprecedented times. As the first Covid cases were recorded in Malta, MIA’s share price nose-dived to €3.50.
The sell-off was short-lived as investors’ demand surged, despite the lack of clarity about the future of travel. As local Covid cases seemed to be well under control during the summer, the equity’s price traded just shy of the €6 level before it headed south once again.
The vaccine news lifted investors’ sentiment, with the equity gaining nearly 35% since the beginning of November. On a year-to-date basis the equity still closed 10% lower.
The pandemic also had its toll on the hotels and leisure industry. In the early weeks of the year, International Hotel Investments plc was performing ahead of budget, until the implications of the coronavirus were becoming apparent.
As enforcements were being imposed to contain the virus, the company decided to shut down or significantly scale back operations.
As a result, the equity ended the year with a negative 13% movement in price, as it closed off 2020 at €0.72. The equity reached a yearly high of €0.82 while it traded at a low of €0.452 in September, before a vaccine-induced rally sent the equity higher by 60% in the last few weeks of the year.
In the banking sector, Bank of Valletta plc (BOV) ended the year at €0.95 to record an annual decline of 10%. In March, the share price of the banking group touched a 10-year low of €0.84.
As restrictions were eased, elements of improvement were experienced. However, the prolongation of the situation entailed overall lower business volumes and revenues compared to the previous year. The share price of the bank managed to recoup a substantial part of the loss experienced earlier, as news of a possible vaccine hit the wire.
During the year BOV shares traded at a yearly high of €1.12.
BOV was the first bank to launch the Covid Assist Scheme which was made available at very attractive interest rates and which is accessible to all local business facing liquidity shortages. In terms of home loans, the bank added that demand for home loans also picked up lately after a sharp slowdown earlier in the year.
Following the European Central Bank’s recommendation, the board postponed the payment of the final proposed dividend for the financial year 2019. It also resolved not to declare an interim dividend for June 2020.
HSBC Bank Malta plc (HSBC) declined by 31% during the year, as it closed at €0.90 – translating into a €0.40 difference.
The equity’s price traded at a yearly high of €1.25 back in January. In line with the ECB’s recommendation, no interim dividend was declared.
Lombard Bank plc registered an annual gain of 3.5%, as it closed at €2.36.
In the same sector, FIMBank Malta plc registered an annual decline of 17% to close the year at $0.50. The banking equity’s share price reached a low price of $0.284 but managed to recover some of the lost ground in December.
MIA was among the worst hit companies during such unprecedented times
Mapfre Middlesea plc shares jumped by 14% to close the year at €2.46 after trading at a yearly low of €1.80.
In the property sector, Malita Investments plc ended the year flat at €0.90. The equity reached a low of €0.755 but managed to offset the loss until end of year. During the Annual General Meeting in September, the board approved the payment of a final gross dividend of €0.035 per share, consisting of an interim dividend which was paid on September 6, 2019, and an additional gross dividend on May 12, 2020.
This equates to a final net dividend of €0.02711 per share.
Malta Properties Company plc was among the worst performers, as it recorded a negative 21% movement in price, closing at the €0.50 price level.
Meanwhile, the equity was also traded at a yearly high of €0.685 during the first quarter of the year, before the first Covid cases were reported.
MIDI plc, also closed in the red with a 17% loss.
The equity’s price declined, as investors were trying to understand the negative impact of the pandemic on the local property sector. In fact, the equity touched a yearly low price of €0.322 before recovering by 40% to close the year at €0.448.
On a similar note, Tigne’ Mall plc lost 5.6% or €0.05 last year.
The equity reached a five-year-low price of €0.65 in August but recovered a lot of ground since then to end the year at €0.85. For the period ending June 30, 2020, the company registered an 83% drop in profit after tax to €0.2 million.
This was mainly due to lower rental revenue as a consequence of tenant support initiatives and a decrease in revenue from the operation of the car park as consumer confidence declined.
Trident Estates plc ended the year with a positive 7% change in price, as it closed at €1.66. In March, the equity reached a low of €1.25, possibly due to investors’ panic and lack of demand for certain local equities.
Retail conglomerate, PG plc, finished 2020 on a positive note as the equity’s price increased by nearly 9% to close at €2.
In March, the equity traded at a yearly low price of €1.60 as a consequence of the virus outbreak. Both Pavi and Pama registered an increase in turnover, exceeding expectations.
On December 10, 2020, an interim dividend of €2 million in respect of the first six month of the financial year ending April 30, 2021, was distributed.
The worst performer was Simonds Farsons Cisk plc as it registered a double-digit decline of over 32%. In November the equity declined to a 2020 low of €6.75 but managed to recover some of the lost ground, as it ended the year at €7.80.
Early in January 2020, the share price of the company was active at a high of €11.50.
Telecommunications company, GO plc, closed the year down by 17% to €3.54.
The equity also traded at a yearly low of €2.80 in November while it reached the highest of €4.28, in January. In light of the pandemic, the board revised the final dividend payment lower to €0.10.
On a similar note, RS2 Software plc recorded a yearly decline of 6.5% as it ended the year at €2.00.
In February, the equity was trading at €2.56 and dropped to a yearly low of €1.69 in March, when panic selling was the order of the day.
The company reiterated that its strategic focus is on becoming the company of choice in the global payments industry and towards this end, the company requires further substantial investment in infrastructure and business development. For this reason, the board did not declare an interim dividend.
Note: We would like to thank our readers and clients for their support during the past 12 months. Our whole team wishes you happiness and success in the upcoming year.
This article, compiled by Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such.
The company is licensed to conduct investment services by the MFSA and is a member of the Malta Stock Exchange and the Atlas Group.
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 Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, tel: 2122 4410, or email info@jesmondmizzi.com.