Sunday 11th October 2009
Weekly market round-up
Global equities rally regains momentum
Jesmond Mizzi
The Dow Jones Industrial Average last week gained another 3.5% to reach 9,864 points, its highest level since October 6, 2008, as analysts recommended technology and healthcare shares. Likewise, the Nasdaq Composite and the S and P 500 both rose 4.4%, with the S and P registering its biggest gain since July on news that jobless claims fell more than forecast. US markets rallied despite US Federal Reserve chairman Ben Bernanke's warning that the Fed will increase interest rates once the economic outlook improves sufficiently.
London's FTSE 100 index gained nearly 3.5%, its best week since July, despite the sterling falling to a five-month low on a trade-weighted average and close to its lowest level against the euro this year. In fact, the sterling has fallen more than 7% against the euro since August.
European markets also had a good week despite a fall on Friday. The CAC 40 in Paris and Frankfurt's Xetra Dax each gained over 4% .
The Malta Stock Exchange (MSE) index closed at 3,161.436 points, a fall of just 0.88% on the week, and down 1.46% so far this year. Eleven equities were negotiated on the MSE last week, with three closing in positive territory, four negative and the remaining four unchanged.
The week's best performer was 6pm plc while Malta International Airport plc was the worst. Just over half a million euro worth of transactions were registered in the equity market in 123 deals. Unlike most trading weeks a lot of trading volume occurred in the smaller capitalised companies listed on the MSE, although nearly half of the value of trading was in HSBC.
HSBC Bank Malta plc shares traded at a high of €2.80 and a low of €2.649, closing the week somewhat mid-way at €2.74, hence shedding 2.2% from last week's closing value. A total of 76,395 shares were traded across 37 deals. Notwithstanding this slight dip, the equity is still in positive territory this year, having appreciated a minimal 1.48% since January.
A significant 81,069 Fimbank plc shares changed hands in 14 deals last week. The bulk of this trading took place during a single trading session which saw the price dragged down from $1.20 to $1.16. However, this fall was totally reversed on Friday, on the back of a very light trading, leading the equity's share price to close unchanged at $1.20.
RS2 Software plc was the third most-traded equity last week, following eight deals of 55,000 shares that occurred in two sessions. The price edged slightly higher on Tuesday and was maintained at that level two trading sessions later, closing at €0.62, or 3.51% higher.
Similarly, a larger-than-normal volume of 6pm Holdings plc shares were traded. A total of 33,800 were exchanged, upping the price by a whopping 13.6% from £0.59 to £0.67. This trading occurred in 10 deals on Friday, following a period of slightly more than six months in which there had been no trading whatsoever in this stock. Following this large price movement, 6pm is now losing 4.3% from last year's closing price.
The company announced on Friday that Ivan Bartolo, Steve David Wightman and Alan West-Robinson each sold 250,000 shares to Jason Brickell at the price of £0.67 per share. All the individuals involved are executive directors of the company. Mr Brickell's total beneficial interest in 6pm is now 750,000 ordinary shares or about 10% of the company's issued share capital.
Bank of Valletta plc's share price closed unchanged at €3.36. Volume of trading was somewhat lower than that of past weeks with only 29,945 shares being traded in 31 deals spread evenly throughout the week.
Go plc's share price continued its downward trend, moving significantly lower on Tuesday to reach a low of €1.50. Successive trading sessions saw the share price recover slightly, reaching €1.55, limiting the weekly loss to 1.7%. Nearly 28,000 shares were traded in 15 deals with most of the volume backing the upward move later in the week. Go has now lost 11.5% since January.
There was minimal trading in Plaza Centers plc and Malta International Airport plc, resulting in further losses in both equities, with the former dropping a minimal 0.3% and the latter shedding 5.22% (following last week's 6.5% gain). Therefore, MIA's share price continues to fluctuate sharply week after week, seeing heavy volatility on minimal trading.
Similarly, minor trading occurred in Lombard plc and Medserv plc shares. Lombard's share price ended the week unchanged while Medserv gained an encouraging 5.5% following a single deal of 600 shares on Wednesday.
This week saw Island Hotels Group Holdings shares being traded for the first time on the MSE. A total of 7,500 shares changed hands in a single deal on Friday with the price remaining unchanged at €1, its public offer price.
Long-term Malta Government Stocks (MGS) again soared higher last week, as yields continued to adjust to lower levels. The best performing MGS was the 5.2% MGS maturing in 2020 whose price rose 1.05% from €105.89 to €107.03. Other medium- to short-term MGS saw mixed share price movements throughout the week.
Nearly €27 million worth of government bonds were traded in 44 transactions, including two deals in the 5.7% MGS 2012(III) worth over €20 million. In total, 16 government stocks were traded during the week with over 50% of the transactions taking place in the 5%MGS 2021.
The prices of most corporate bonds traded this week remained unchanged. However, the 8% BoV US$ 2010 bond climbed nearly 1% higher, ending the week at $103.50. The value of trading in corporate bonds reached €802,479 in 81 deals spread over 17 bonds. Five transactions were carried out in the Treasury Bills market for a value of just over €3 million.
This article, which was compiled by Jesmond Mizzi, managing director of Jesmond Mizzi Financial Services Limited (JMFS), does not intend to give investment advice and the contents therein should not be construed as such. JMFS is licensed to conduct investment services 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, Tel: 2122 4410 or e-mail jmizzi@jmfs.net.
The Times of Malta - Sunday 11th October 2009
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