The MSE Equity Total Return Index continued its recent recovery during the four-day trading week, as it reached 8,283.81 points – translating into a 0.72 per cent increase over the week, a 6.73 per cent gain on the month, while a 9.29 per cent rebound since the low reading in March. Out of 16 active equities, eight gained ground while another five headed south. A total weekly turnover of €1.4 million was generated over 214 trades.
Last Tuesday, HSBC Bank Malta plc announced its interim directors’ statement and COVID-19 impact update. The bank anticipates Malta’s economy will contract sharply this year. The bank started off the year on a strong note, as business volumes exceeded those of the prior year.
Progress continued on cost reduction, as operating expenses for Q1 were lower than in the same period last year. Liquidity continues to be robust, with customer deposits increasing since December 2019.
This positive stance has changed. So far, the bank has not experienced material increases in specific credit losses. This reflects the benefit of support measures introduced by government, policy guidance from regulators and the bank’s conservative risk culture. The board has made judgements to reflect the potential impact of COVID-19 at a portfolio level and booked an expected credit loss provision of €7 million in the first quarter results.
The bank’s capital position remains exceptionally strong and exceeds the regulatory requirements. The bank recorded a two per cent increase in price as it reached a six-week high price of €1.02. A total of 22 deals involving 83,655 shares were executed.
Last Thursday, Bank of Valletta plc announced that this year’s Q1 financial performance was somewhat below expectations, as some adverse effects began to emerge towards the end of March due to the consequential economic impact. Meanwhile, the bank’s asset balances and customer deposits are in line with expectations and no reduction in asset growth or customer balances have been reported to date. The loans to deposit ratio remains solidly at 44.5 per cent.
Potential declines in commission and exchange income are starting to be detected as a result of reduced customer interactions. Although still early to estimate the full impact of the pandemic, lower income and potentially increasing credit losses will lead to lower profitability in 2020.
As at March 31, 2020, net interest income declined marginally when compared to the previous year’s figure.
This is driven by volume growth in the loan book and the continuing preference for very low yield deposit products. This remains being offset, however, by lower returns on treasury investments as we continue to move towards lower risk investments.
Earlier in the week, the bank also announced the appointment of its new chairman by the government, Gordon Cordina.
Cordina will be assuming this role at the bank on October 7, 2020, and subject to regulatory approval. The bank declined by 0.9 per cent as it ended the week at €1.05. A total of 63,890 shares changed hands across 18 transactions.
The most liquid equity was Malta International Airport plc, as total turnover amounted to €514,626. The price reached a low of €5.00 during the week to close at the €5.10 price level, translating into a one per cent increase on the week. A total of 102,664 shares changed hands over 50 deals.
Earlier in the week, BOV announced the appointment of its new chairman by the government, Gordon Cordina
Last Monday, the RS2 Software plc board approved the audited consolidated financial statements for financial year ended December 31, 2019. These shall be submitted for shareholders’ approval during the forthcoming AGM. The group’s revenue increased by nearly 14 per cent from the previous year adjusted revenue figure of €19.4 million, as it stood at €22.1 million. RS2’s strategic shift from providing perpetual licences of its platform to managed services, merchant acquiring services and issuing services abroad resulted in international growth and expansion. Processing revenue increased by 129 per cent in 2019.
A €0.2 million increase in the group’s gross profit for the year was recorded, as it amounted to €7 million. The group’s assets increased by 12 per cent to €31.8 million. Equity saw a 22 per cent decline, as it stood at €14.1 million. No dividends shall be recommended for year ended December 31, 2019. The equity advanced by three per cent to €2.06, as 39 deals involving 90,986 shares were executed.
GO plc ended the week on a negative note, down by 5.6 per cent at €3.70. This was recorded on slim volume of just 6,100 shares. Its subsidiary, BMIT Technologies plc was down by 2.8 per cent as it closed at €0.48. 12 deals involving 56,421 shares were executed.
On Friday, April 24, after market close, Harvest Technology plc announced the board approved the auditedfinancial statements for the financial year ended December 31, 2019. The group’s profit before tax increased to €3.04 million, while earnings per share also increased from €0.0255 to €0.0917. The group’s revenue was up by 3.09 per cent from the previous year as it stood at €16 million. The equity closed flat at €1.46. Three deals of a mere 3,200 shares were executed.
Simonds Farsons Cisk plc was up by 1.8 per cent as 8,037 shares changed hands across 14 transactions. The equity closed the week at €8.30. Similarly, PG plc advanced by 1.6 per cent as it reached the €1.85 price level – the highest since mid-March.
Last Monday, the Plaza Centres plc board approved its consolidated financial statements for the year ended December 31, 2019. The group registered a strong financial performance with average occupancy increasing by three percentage points, reaching 91 per cent in 2019. The group registered an 8.56 per cent increase in revenue, when compared to the previous year, as it amounted to €3.55 million. During the AGM, to be held on July 28, 2020, the directors have resolved to recommend the payment of a final net dividend of €320,000 to all shareholders. This amounts to a total net dividend of €0.0113 to be proposed. The equity did not record any trading activity during the week.
The property sector enjoyed a positive week as out of four active equities, three headed north while another one closed unchanged.
Tign� Mall plc registered high liquidity, despite trading only on Wednesday, as 11 deals involving 363,680 shares generated a turnover of €272,884. The equity logged the best performance of a 16.44 per cent increase, to end the week at €0.85.
Trident Estates plc registered a double-digit gain of 14.8 per cent on Monday, as 21,000 shares were spread across five transactions. Malita Investments plc registered a positive 1.2 per cent change in price, as it closed at €0.85. Eight deals involving 58,782 shares were executed. Malta Properties Company plc was active only on Wednesday and traded flat at €0.55. Three deals involving 24,000 Main Street Complex plc dragged its share price 6.3 per cent lower to €0.45. International Hotel Investments plc traded once on Wednesday on slim volume, to close unchanged at €0.60.
Last Monday, the board of Grand Harbour Marina plc approved the financial statements for the period ended December 31, 2019, and resolved they be submitted for shareholders’ approval at the forthcoming AGM.
Total revenue declined by 13 per cent to €4.12 million due to the decreases in pontoon and superyacht visitors. Meanwhile, profit before tax declined by 37.8 per cent. Earnings per share decreased from €0.021 to €0.011. No dividends were declared by the company for 2019. The equity was not active during the week.
Last Wednesday, GlobalCapital plc announced the audit work of the financial statements for the year ended December 31, 2019 is at an advanced stage. However, the COVID-19 pandemic has placed time and logistical constraints on the financial statements’ preparation and audit process.
These are expected to be published by not later than May 7, as the directors shall be meeting to consider and if deemed appropriate, approve these audited financial statements. No trading activity was recorded during the week.
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, on 2122 4410, or info@jesmondmizzi.com.