Nine equities extend index’s negative stance

MSE Trading Report for week ending May 20, 2016

The Malta Stock Exchange (MSE) Index fell by a further 0.33 per cent, to close at 4,548.199 points. Activity was spread over 18 equities of which nine declined, four gained ground and five closed unchanged as turnover amounted to €2m.

Medserv plc shares headed the list of fallers having stumbled by 2.5 per cent as six deals of 10,060 shares were struck, closing €0.045 lower at €1.75. Last Wednesday, the company released its updated Financial Analysis Summary, summarising key financial data appertaining to the company, taking into account the financial statements of the group for the year ending December 31, 2015 and 2016 forecasts.

The company also announced its Interim Directors’ Statement, outlining how lower oil prices led to increased demands for discounts for the Company’s services. However, among the number of contracts to be renewed and concluded, the Company has been awarded two contracts to replace an offshore storage facility permanently lying offshore Libya. Exploration drilling is expected to re-commence offshore Libya in July 2016 while the integration of the METS Group was stated to be proceeding well. Medserv also notes a strengthening demand for METS core services, particularly in Oman. In Cyprus, current activity remains low as drilling programmes are concluded. Meanwhile, the company has submitted several bids and has tendered for a contract related to an exploration well offshore Portugal. Total revenue for 2016 is forecast to exceed that of 2015 and profits to remain stable.

In the banking sector, HSBC Bank Malta plc shares were the only positive performers having registered a 1.3 per cent gain across nine trades of 15,671 shares, closing at €1.621.The bank announced that the Board of Directors is scheduled to meet on August 5, 2016 to consider and approve the Interim Accounts for the half-year ending June 30, 2016 and to consider if deemed appropriate, the declaration of an interim divided.

Bank of Valletta plc shares edged 0.5 per cent lower as 100,594 shares changed ownership, to close at €2.23. Similarly, FIMBank plc shares declined by 0.4 per cent across two trades of 13,100 shares, closing at $0.847, thus ending its ten week upward trend.

On Thursday, Lombard Bank Malta plc shares slipped by 0.5 per cent over two transactions of 5,000 shares to close at €2.12.

In the I.T. sector, RS2 Software plc (RS2) shares declined by a further 2.5 per cent after adjusting for the bonus issue of one share for every 18 held, to close at €3.50. The equity turned ex-dividend on Friday and was active on 49 transactions of 254,321 shares.

Last Thursday, RS2 published its Interim Directors’ Statement. Currently, the group hold presence in Europe, United States, Latin America and Asia Pacific. The Group’s subsidiary RS2 Smart Processing engaged two new clients for its managed services business, a bank sponsorship was secured in the US and new opportunities with partners in India and Vietnam are currently being pursued. The Group also participated in Europe Money2020 and ETA Transact16, important events in the industry to boost its visibility and interaction with customers and market players. Moreover, the flexibility and modularity of the BankWORKS platform and the value of being an Omni channel, multi-currency, multi-language and multi-institutional enabler is proving to be a differentiator in the market. The Group also reports a very healthy sales pipeline in licensing and managed services, across different regions.

Meanwhile, 6pm Holdings plc shares closed unchanged at £0.95 as 34,420 shares changed hands while Loqus Holdings plc shares also closed unchanged as a sole trade of 2,000 shares was struck at €0.131.

GO plc (GO) shares fell by €0.07 or two per cent as 54,587 shares were traded over 26 deals, to close at €3.48. Last Monday, GO issued an announcement in relation to the ongoing sale process approved at the last Extraordinary General Meeting. The company plans to select the preferred bidder by the end of May, after which the bidder’s identity and the terms of the bid will be announced. GO shareholders will receive an offer document containing the necessary information presented by the preferred bidder on which to base their decision whether to accept the offer and sell their shares.

International Hotel Investments plc (IHI) added a further 1.6 per cent to its previous week’s gain over five transactions of 31,350 shares, closing at this week’s high of €0.65. During the week, IHI announced that NLI Holdings Limited, owner of Corinthia Hotel in London in which IHI has 50 per cent ownership, has completed the acquisition of the Grand Hotel Astoria on Rue Royale in Brussels. NLI Holdings is in the process of appointing Corinthia Hotels to operate the property as Corinthia Grand Hotel Astoria and QP Management Limited to supervise its refurbishment – both are part of the IHI Group.

Last Wednesday, in its Interim Directors’ Statement, IHI announced that despite the challenging market in London, the company has reported a higher revenue and operating profit in quarter one of the year in comparison to the same period of 2015. Moreover, the upgrading works in Tripoli are ready and the hotel will commence business once the situation in the country normalises.

Malta International Airport plc (MIA) sharesincreased by a modest 0.1 per cent across 17 trades of 40,329 shares, to close at €4.375. Last Tuesday, MIA released its Interim Directors’ Statement, highlighting a 12 per cent growth in passenger traffic and a 5.1 per cent increase in turnover for the first four months of the year when compared to 2015. Furthermore, MIA reported a 7.6 per cent increase in profit during the first quarter of the year.  The company remains cautiously optimistic about the remaining period boosted by the introduction of new carriers, additional routes and higher frequencies while other airlines have reduced routes and decreased seat capacity.

Mapfre Middlesea plc shares registered a 1.8 per cent decline over four transactions of 4,384 shares, closing €0.04 lower at €2.20. Similarly, Simonds Farsons Cisk plc shares fell by €0.081 or 1.3 per cent over seven deals of 14,117 shares, to close at €6.219.

Elsewhere, MIDI plc shares erased the previous week’s loss, having advanced by 2.6 per cent over four transactions of 30,550 shares, closing at €0.39. Conversely, Malta Properties Company plc shares registered a decline for the fifth consecutive week, having slipped by two per cent as 28 trades of 131,295 shares were executed, to close at €0.543. The equity registered a gain during the first four sessions of the week to then drop by 8.3 per cent during Friday’s session.

Malita Investments plc shares traded flat at €0.90 over nine deals of 43,500 shares.  Last Thursday, the company published its Interim Directors Statement, in which the company stated that its performance was and is expected to remain in line with projections, subject to any unforeseen circumstances.

MaltaPost plc shares traded unchanged at €1.92 as a sole transaction of 2,673 shares was negotiated. Likewise, Tigne Mall plc shares traded flat at €1.06 over four transactions of 60,000 shares.

In the corporate bond market 34 issues were active of which eight gained ground, 17 fell and nine closed unchanged.Turnover amounted to €1.5m. The 5.1% PTL Holdings plc Unsecured € 2024 was the most liquid having witnessed a turnover of €237,226.

Global Capital plcannounced that a new unsecured bond of €10 million will be issued at par, redeemable in 2021, with a coupon rate of 5%. The bond is open for subscription to existing bondholders of the 5.6% GlobalCapital plc € 2014/16 as at the close of business on May 13, 2016. Any balance of the bonds not subscribed for by existing bondholders will be open for subscription to professional clients.

In the sovereign debt market turnover totalled €6.6m spread across 25 issues of which 14 declined and 11 gained ground. The 4.6% MGS 2020 (II) was the worst performer having declined by 1.2 per cent, to close at €116, while the 3% MGS 2040 (I) headed the list of gainers, having appreciated by 0.6 per cent and closing at €110.94.