The local equities market closed the two-day trading week in positive territory with a marginal 0.23 per cent gain.
The MSE Equity Total Return Index (MSE) is now at 9,407.998 points which translates in a year-to-date gain of 4.5 per cent.
Back in September the local equities’ index briefly surpassed the 10,000 points level, which it failed to maintain as a number of large cap equities either lost further ground or trimmed some of their gains.
Last week, 10 equities were active as €0.2m were traded across 39 deals. Over half of the turnover took place in the two largest components of the local equities’ index while PG plc shares followed.
In the banking sector Bank of Valletta plc (BOV) turned positive with a 2 per cent gain. The banking equity was the most active as over €54,000 worth of BOV shares changed hands over 14 transactions.
The bank’s share price never dipped below last week’s close, as all trades were executed between €1.04 and a weekly high of €1.06. This was the highest closing price over the past three weeks.
Lombard Bank plc shares followed with a 1 per cent or €0.02 gain to end the week at €2.28.
A single trade of 300 shares was executed on Friday morning with no further activity being recorded.
Its peer, FIMBank plc, topped the list of fallers with a 3.2 per cent or $0.02 decline.
The banking equity closed at $0.60 after three deals of 17,378 shares were recorded. Total turnover reached $9,500 as the equity’s price fluctuated in a tight range of $0.615 and $0.60.
Retail conglomerate, PG plc added a further 0.6 per cent to close at €1.84 after announcing an encouraging interim report the previous week.
Eight deals of 16,440 shares were executed as the equity’s price fluctuated between a weekly low of €1.80 and a high of €1.84, a price reached on Friday during the session’s final hour.
On a year-to-date basis PG plc is the second best performing equity with a 38 per cent or €0.51 gain.
Malta International Airport plc (MIA) shares traded flat at €6.90 as the equity was active during both sessions.
Three trades worth nearly €52,000 were executed as 7,500 shares changed ownership.
The equity is up by 19 per cent since the beginning of the year. This is surely a positive return for MIA shareholders and a lift to investors’ sentiment, even though earlier in the year the equity’s year-to-date gain touched a high of 37 per cent.
International Hotel Investments plc gained 1.3 per cent to close the week at €0.77 as three transactions of 21,028 shares were recorded.
Likewise, one trade of 10,000 Trident Estates plc shares sent the equity’s price higher by 3.3 per cent or €0.05 to end the shortened trading week at €1.55.
Among the other active equities, two trades in GO plc left the equity’s price unchanged at €4.16 while MaltaPost plc shares traded flat at €1.30 over one transaction of 7,775 shares.
On the downside, BMIT Technologies plc closed 2 per cent lower at €0.505. Total turnover amounted to €14,600 spread across three deals.
In the bond market, the MSE MGS Total Return Index closed flat as it ended the week at 1,134.71 points. Activity was spread across 10 issues as turnover reached €0.5m.
The long-dated issues were the most traded with the 10-year 2.3% MGS 2029 (II) being among the most active issues. The 2.2% MGS 2035 (I) jumped by 200 basis points to close the week at €125, while the 4.1% MGS 2034 (I) shed 81 basis points.
The MSE Corporate Bonds Total Return Index added a further 0.3 per cent to close at 1,078.31 points. Out of 23 active issues, seven gained and six declined. The 3.75% Premier Capital Unsecured 2026 headed the list of gainers with a 3.5% gain. Meanwhile, in the Prospects MTF market only one issue was active.
Year-to-date negative performers
Given the fact that last week we had a short trading week and we will also have a short trading session, next week, we will dedicate part of this and next week’s round-up to some of the top and worse performers during the year.
This time we will start with the year’s worse performance.
In what follows, all figures are as at last Friday and hence they are not inclusive of any changes that may happen during the year’s final trading session which is tomorrow.
As at last Friday, the MSE’s year-to-date gain stood at 4.5 per cent.
At its highest level this year, reached in September, the MSE was up just over 11 per cent.
This gain hovered around the 10 per cent mark for the first half of last quarter but the gain started to diminish as the local situation took a turn for the worse.
We start with making reference to the banking sector, which is the largest sector on the local stock exchange.
HSBC Bank Malta plc topped the list of fallers both in the banking sector and in the overall index. The bank shed 35.5 per cent of its capitalisation so far this year.
BOV is down by 12.3 per cent and Lombard Bank plc lost nearly 7 per cent. FIMBank plc which operates in a different area of the banking sector, compared to the other three quoted banks, has shed almost 20 per cent.
What has led to these dismal performances?
The banking sector has gone through a number of important changes since the last financial crisis and will continue to change in line with regulations to make the banking and financial system more robust and sound.
The changes which took place were and will remain a drag on profitability. In addition,
some banks have exited a number of profitable businesses to reduce risks.
To make matters worse, the banks’ margin business has been under pressure as interest rates in Europe reached record low levels. Many expect the interest rate outlook to remain at low levels and hence banks’ profitability from this important source of revenue to remain under pressure.
In addition, Malta’s largest bank, BOV has been hit by a serious of negative news.
Given its size on the local stock market and the large investor base, the bank’s negative performance will have an impact on investors’ sentiment towards listed banking and non-banking equities.
Midi plc was heading for a positive year but investors sold off the equity in November as the local political scene turned sour. The sell-off intensified, as the company announced that Manoel Island Development between Midi plc and Tumas Group will come to a halt. The latter was expected to take a 60 per cent shareholding in the development, worth €100 million.
On a year-to-date basis Grand Harbour Marina plc (GHM) is also among the worst performers with a 21.4 per cent decline.
The company is a relatively small component on the local index and hence has little impact on the MSE’s overall performance. So far this year, GHM was active 47 times as 256,000 shares changed ownership. The equity’s price oscillated between a yearly high of €0.745 and a low of €0.50 reached in mid-November.
MaltaPost plc is down by nearly 18 per cent despite a pick-up in activity.
The share price of the postal operator fluctuated between a high of €1.58 and €1.17.
Meanwhile, in the property sector, Main Street Complex plc and Tigne’ Mall plc are down by 7.7 per cent and 6.7 per cent respectively. Plaza Centres plc is marginally lower since the beginning of the year.
I wish the readers a prosperous New Year.
This article, which was 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 a member of 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.