Investors’ sentiment turns negative on government stocks
MSE Trading Report for week ending March 10, 2017
On Thursday, the president of the European Central Bank, Mario Draghi delivered a speech in which he stated that, based on statistical information, inflation in the eurozone has risen to just under 2 per cent for the first time in four years. Markets are now anticipating that the likelihood as to whether an interest rate hike would occur by August 2018 increased to 68 per cent from 31 per cent last week.
Inflationary pressures affect bond prices negatively and this was definitely witnessed by government stocks during the week.
As opposed to the recovery witnessed in February, practically all the sovereign debt issues active this week slumped. Given the low coupons and higher duration, long dated issues experienced the worst losses. The sharpest week-on-week decline was that registered in the 3% MGS 2040 as this fell by 3.1 per cent, to close at €108.02.
Elsewhere, in the corporate debt market a total of 26 issues were active of which losers amounted to almost three times as much as the gainers. More specifically, five issues appreciated while fourteen headed south while the active non-moving issues amounted to seven. Total trading in corporate bond issues amounted to €1.25m. The 5.75% International Hotel Investments plc Unsecured €2025 topped the list of fallers as it registered a 2.2 per cent decline, to close at €105.40.
Meanwhile, the MSE Index closed off a week of negative performances, as the index registered a weekly loss of 0.41 per cent, to settle at 4,744.261 points. In total 15 equities were active during the week, of which gainers and non-movers tallied at seven while only one gained ground. Total turnover stood at similar levels as last week at €1.57m.
HSBC Bank Malta plc shares did not manage to hold onto the fresh three year high registered last week as a decline of one cent was registered. Total turnover amounted to almost €374,000 over 37 trades.
On the contrary,Bank of Valletta plc shares held on to the nine year high registered last week, as the price at the end of the week read €2.21. This equity was by far the most liquid of the lot as total turnover almost reached €600,000 spread across 91 transactions.
Other active non-moving equities were Simonds Farsons Cisk plc, GO plc, GlobalCapital plc, MIDI plc, Malita Investments plc and RS2 Software plc.
During the week, the board of directors of Plaza Centres plc approved the Group’s Audited Financial Statements for the year ended December 31, 2016. The Group’s revenue for the year was €2.7m (2015: €2.4m) an increase of 11.8%, while profit before tax amounted to €1.65m compared to €1.59m in 2015. Earnings before Interest, Taxation, Depreciation and Amortisation increased by 8.2% from €2.09min 2015 to €2.26m in 2016. Taxation decreased from €581,202 to €381,628 in view of the fact that the parent company is benefitting from a revised and more beneficial tax regime. The 2016 Group figures reflect the contribution of the newly acquired property for the relevant period.
At the forthcoming AGM, the board of directors is recommending approval of the payment of a final net dividend of €0.0294 net per share (2015 €0.0286 net per share). The final net dividend will be paid on Tuesday June 6, 2017 to shareholders on the company’s share register at close of business on Friday, April 28, 2017. Despite this positive announcement, the equity failed to register any activity during the week.
Malta Properties Company plc shares headed the list of fallers in the equity market by some margin. The price setback amounted to 5.3 per cent as the equity settled at €0.52. This result was registered following eight trades of 52,851 shares. Last Monday, the company announced that the board of directors is scheduled to meet on March 21, 2017 to consider and approve the Company’s Audited Financial Statements for the financial year ended December 31, 2016 and to consider the declaration of a final dividend to be recommended to the Company’s Annual General meeting.
The respective equities of Lombard Bank Malta plc, Tigne Mall plc and Malta International Airport plc all headed south by over two per cent. Lombard Bank Malta plc declined by 2.9 per cent as the closing price read €2.32. This loss materialised over one transaction of 2,756 shares. Last Thursday, the board of directors of Lombard Bank Malta plc approved the audited financial statements for the financial year ended December 31, 2016 and resolved that these statements be submitted for approval at the forthcoming Annual General Meeting to be held on April 27, 2017.
The Group reported that profit before tax increased by 5.1% to €8.24m when compared to €7.84m in 2015. Improved performance was registered in almost all the Bank’s business lines even though the growing regulatory demands served as a dampener to more aggressive growth. The Group produced a robust set of results proving that it is well positioned to meet the challenges of a fast changing industry while delivering services of the highest standard. The board of directors resolved to recommend that the Annual General Meeting approves the payment of a final gross dividend of €0.04 (net dividend of €0.026) per nominal €0.25 share. This will be paid on May 5, 2017 to shareholders appearing on the Bank’s Register of Shareholders as at March 28, 2017.
Shares of Tigne Mall plc depreciated by 2.6 per cent to €1.10 across two deals of 9,300 shares. The company announced that its board of directors is scheduled to meet on April 6, 2017 to consider and approve the company’s audited financial statements for the year ended December 31, 2016 and to consider the declaration of a dividend to be recommended to the AGM.
Meanwhile, Malta International Airport plc announced that it had welcomed 296,250 passengers in February, translating into a 25.2% increase in traffic over the same period in 2016, in spite of the fact that this year the month was a day shorter. This makes February the fourth, consecutive winter month to register double-digit growth, in line with the airport’s strategy to attract more traffic in the shoulder months.
Malta International Airport’s top markets remained largely unchanged from January, with the United Kingdom topping the list followed by Italy, Germany, Belgium, and France. More than half of the 59,602 additional passengers welcomed last month travelled from Italy, Germany and Belgium, with enhanced connectivity to these markets contributing to their notable growth. Albeit these positive results, the equity fell by 2.1 per cent to €4.15, following 17 deals worth €90,000.
Following last week’s price slump,International Hotel Investments plc shares recouped half of these losses as they gained 1.6 per cent, to close at€0.64. This performance meant that this was the sole equity to close in positive territory during the week. Total turnover exceeded the €17,650 mark spread across eight transactions.
The board of directors of Mapfre Middlesea plc, approved the audited financial statements for the financial year ended December 31, 2016 for approval at the forthcoming Annual General Meeting (AGM) scheduled for Friday, April 21, 2017.
Total Group profit before tax for the year amounted to €11.65 million as compared to €17.84 million during the previous year with after tax profits at €8.93 million compared to €11.87 million in 2015 – 2015 Group results were influenced by a one-off gain of pre- tax €5.05 million arising as a result of a major restructuring of MAPFRE MSV Life’s p.l.c. reinsurance programme as from 2015.
The board of directors recommend, for the approval of the AGM, the payment of a final net dividend of €0.03826 per share. The final dividend, if approved at the AGM, will be paid on May 19, 2017 to shareholders on the company’s share register at close of business on April 28, 2017.
The equity traded only once with very thin volumes. As a result of this single trade, the equity declined by 1.8 per cent, to close at €2.19.
Medserv plc’s equity also had a negative week due to a 1.5 per cent decline in price. Total turnover surpassed the €51,000 mark across eleven trades.