The MSE Equity Total Return Index extended the previous week’s decline by a further 1.3%, as it reached 8,060.937 points.

A total of 17 equities were active, of which gainers and losers tallied to seven-apiece.

A total weekly turnover of €717k was generated across 129 transactions. This contrasts to the broader European and US equity market, which headed north as focus shifted on the vaccine development with hope of an economy recovery in the near future – stymied by increased tensions between the US and China, showing a potential threat to the first phase of the trade deal signed earlier this year.

The weekly rally has also run out of steam as, earlier in the week, the US senate passed legislation which could restrict listing from Chinese companies on American exchanges if they do not abide by US regulations and audit standards.

In the banking industry, Bank of Valletta plc reached a six-week low of €1.00 but managed to recoup part of its lost ground by end of week, to close at the €1.02 price level. A total of 13 deals involving 35,988 shares were executed.

HSBC Bank Malta plc, traded 0.5% higher as 29,422 shares changed hands across nine transactions. The bank ended the week at the €0.96 price mark.

Last Wednesday, Lombard Bank Malta plc announced its interim directors statement and COVID-19 update.

The bank’s financial performance stands to be negatively impacted since economic forecasts have been suggesting that the local economy is set for a contraction this year. Though it is unlikely that the bank’s original objectives will be achieved, it is not considered prudent to attempt any medium-term forecasts, given the current level of uncertainty.

Apart from the reduction in international trade and increased caution by local businesses, other relevant factors are still evolving, such as higher unemployment together with a subdued business sentiment.

Some highlights taken from the latest financial information are relevant. Net interest income declined marginally due to higher interest payable on increased volumes of customer deposits and pressure from negative interest rates on excess liquidity. Fees and commission also decreased as the second quarter progresses.

Meanwhile, costs remain well under control and in line with expectations.  Net loans and advances to customers remained virtually unchanged and customer deposits continued to increase from the end of the previous year. The bank maintains a strong total capital ratio, which is well above the minimum regulatory requirements.

The bank’s balance sheet remains strong, with total assets at the same levels of the previous year, while healthy liquidity ratios continue to be actively managed and monitored. The loans to deposits ratio stands at a prudent 59%.

Moreover, the bank’s loans and advances portfolio includes facilities for medium-term projects which should not be unduly impacted by the short-term economic environment. The bank is well equipped to increase provisions should the economic situation deteriorate such that the repayment ability of its borrowing customers becomes impaired. Meanwhile, the bank has introduced its own support measures to complement those introduced by Government to assist the economy.

Despite the challenges being faced by the bank’s main subsidiary, MaltaPost plc continued to deliver postal services uninterruptedly, with only minor disruptions, mainly in deference to consideration of health and safety issues.

However, other operational activity areas have been severely impacted, not least by the sharp decline in flight connections to and from Malta.

This unplanned interruption has negatively affected some of the subsidiary’s more important revenue streams.

The bank registered a 1% drop in price, as it reached €2.08. Two deals involving a mix of 10,000 shares were executed. Meanwhile, its subsidiary, MaltaPost plc lost 3.3% as it closed at €1.17. Four deals involving 19,499 shares were executed.

A total of 15 deals involving 542,272 shares dragged the IHI price into the red by 5.3%

Last Friday, FIMBank plc issued an announcement following that published by the bank’s majority shareholder, United Gulf Holding Company BSC, on the Bahrain Bourse as well as subsequent media reports indicating that the bank has an exposure to Phoenix Commodities Pvt Ltd. The latter is an agri-trader, with offices in Dubai and Singapore, and has recently encountered significant financial difficulties.

The bank confirmed that it has a business relationship, in their capacity as co-borrowers with Phoenix Commodities and with Phoenix Global DMCC. Phoenix Commodities, being the holding company, has recently entered into liquidation. 

The bank’s assessment of net exposure towards the Phoenix Group is $8.5 million, and in this early stage, the bank is evaluating its legal position and implementing all risk mitigants which have been created when establishing the facility in discussion.

The equity last traded on April 1, 2020.

Malta International Airport plc registered a positive 0.8% change in price, as 42 deals involving 30,488 shares were executed. The equity reached an intra-week high of €5.05 to then end the week at €4.94.

Last Tuesday, GO plc announced that the board has not yet taken a final decision regarding the re-evaluation of the recommendation to pay a dividend of €0.14, net of tax.

The equity reached a 20-month low of €3.56 during the week but managed to off-set the loss by end of week.

The previous week’s closing price of €3.60 was not impacted, as 19,058 shares changed ownership across 11 transactions.

Its subsidiary, BMIT Technologies plc, was up by 4% as it closed at €0.478. Two deals involving 1,000 shares were executed.

On the other hand, RS2 Software plc was down by 1% as it closed at €1.95 as 6,292 shares were spread over four deals.

International Hotel Investments plc registered the highest liquidity with a total weekly turnover of €294,036.

A total of 15 deals involving 542,272 shares dragged the price into the red by 5.3%.

The equity closed at a six-week low price of €0.54.

Heading the list of fallers, Mapfre Middlesea plc shares plunged by 12%, as two deals of 2,171 shares led to a closing price of €2.28.

On the other hand, second to none, GlobalCapital plc registered a double-digit gain of 43%. Two deals involving 29,055 shares pushed the price upwards to €0.33.

Simonds Farsons Cisk plc registered a 2.4% decline, ending the week at a one-month low of €8.05. Nevertheless, this was registered over a mere volume worth €4.5k.

Conversely, retail conglomerate, PG plc, closed 2.7% higher, reaching a nine-week high price of €1.90. A total of 9,143 shares changed hands across six transactions.

In the property sector, two equities were active. Malita Investments plc traded five times over a mix of 25,843 shares. The equity’s previous closing price of €0.89 was not impacted. On a similar note, four deals for Malta Properties Company plc did not alter the equity’s previous closing price of €0.54. A total of 8,650 shares were executed.

Main Street Complex plc closed 7% higher at €0.496.

A total of 21,782 shares change ownership across three transactions. Similarly, three deals involving 4,525 Harvest Technology plc shares pushed the price 2% higher. The equity ended the week at €1.49.

The MSE MGS Total Return Index remained relatively flat as it registered a 0.01% increase, ending the week at 1,107.17 points.

A Franco-German proposal for a €500 billion recovery fund is expected to be an essential relief, ECB president Christine Lagarde said.

In the local sovereign market, a total of 15 issues were active, of which eight advanced while another seven closed in the red. The 2.3% MGS 2029 (II) headed the list of gainers with a 5% increase, as it closed at €121.20. Meanwhile, the 4.3% MGS 2033 (I) lost 6%, ending the week at €141.49.

The MSE Corporate Bonds Total Return Index lost 0.234% as it reached 1,062.54 points.

Out of 38 active issues, nine headed north while another 19 closed in the opposite direction. The top performer was the 4% International Hotel Investments plc Unsecured € 2026, as it closed 0.7% higher at €99.00. On the other hand, the 3.75% AXI 2029 S2 lost 2.2%, to close at €100.75.

In the Prospects MTF market, seven issues were active. The 5.75% Pharmacare Finance plc Unsecured EUR Bonds 2025-2028 was the most liquid, with a total turnover of €10,000.

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, or on Tel: 21224410, or email info@jesmondmizzi.com

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