Long-dated Local Sovereign Debt back into positive territory

MSE Trading Report for week ending November 03, 2017

Local Sovereign Debt registered a positive week as out of the 24 active issues, the absolute majority amounting to 20 closed in the black, while three closed lower as turnover fell from €9.4m to €7.4m. Long dated bonds having a maturity greater than 12 years registered the strongest gains, ranging from 0.42% and 1.93%. The 4.3% MGS 2033 (I) R strongly rebounded from last week’s decline of 0.8% to close the week 1.9% higher at €135.50.

In the corporate debt market a total of 40 issues were active of which the gainers and losers tallied to 13-a-piece. On Tuesday, the 4% Stivala Properties plc Secured Bonds 2027 commenced trading, closing the week 2.25% higher at €102.25.

The MSE Equity Total Return Index plunged during the week as the index closed 1.5% lower at 8,804.547 points. The drag was mainly a result of the downward pressure on the Bank of Valletta plc share price, which erased 10% of its value as the shares fell ex-rights last week. A total of 16 issues were active during the week of which eight closed in the red, while six gained ground, as a total turnover of €1.778 million was generated among 232 deals.

Bank of Valletta plc shares closed at the €1.80 price level having had the lion’s share of total turnover as 129 trades managed to generate a total turnover of €1.264million – accounting for 71% of total turnover.

Last Wednesday, following regulatory approval Bank of Valletta plc issued a prospectus dated October 30, 2017 in relation to a rights issue of 105,000,000 new shares of a nominal value of €1.00 per share. The proceeds from the issue of the new shares are expected to amount to approximately €150,000,000.

The Rights Issue will be offered to existing shareholders of the Issuer appearing on the register of members as at the close of business on the 26 October 2017. The entitlement of each existing shareholder to the new shares is at a ratio of 1 new share for every 4 shares already held as at the record date. Existing shareholders may assign part or all of their rights to third parties.

Rights to subscribe for the new shares not taken up by existing shareholders or assignees (the “lapsed rights”) shall be allocated to: (i) existing shareholders that accept their rights in full and apply for Lapsed Rights; (ii) Employees applying for lapsed rights; and (iii) the general public in Malta through an intermediaries offer, in this order of preference. The offer price of the new shares is of €1.43 per share. Those shareholders who choose to take up their rights in full will suffer no dilution to their shareholding in the Bank. However, existing shareholders who do not take up any of their rights or take up only part of their rights will suffer an immediate dilution to their shareholding.

Lombard Bank plcshares followed suit as 13 trades amounting to 21,998 shares managed to drag the price of the equity by 4.4% to hit the €2.20 price level.

Its peer,HSBC Bank Malta plc shares headed in the opposite direction as the equity closed the week 1.7% higher at €1.89. A total of 13 transactions managed to generate a total turnover of €43,938.

On Wednesday, Malta International Airport plc announced that it recently signed a new concession agreement with Dufry, the world’s leading travel retailer, for the operation of the terminal’s duty free store on Level 1 covering the period between January 2019 and December 2026. The reconceived area will occupy around 1,400 square metres. The equity was active 12 times managing to generate a total turnover of €106,894, to close 0.8% lower at €4.75.

Also on Wednesday, International Hotel Investments plc published its Interim Directors Statement, in which it announced that the company is on course to register a record operating profit for the year 2017, driven by a solid underlying performance in all its hotel operations in Europe and beyond. Revenues and operating profits are up on 2016, and ahead of budgets. The equity reached a 36-week high to close 3.44% higher at €0.631.

Meanwhile, Maltapost plc shares was just shy of reaching an all-time high on Monday, as two trades amounting to 4,225 shares managed to lift the price by 1.4%, reaching the €2.079 price level.

RS2 Software plcshares swayed between negative and positive ground, hitting a 19-week low, during intra-week trading at €1.55. The equity recovered and advanced by 3.1% week-on-week to close at €1.649.

Retail conglomerate, PG plc traded twice over 5,000 shares, managing to erase 1.3% of the equity’s value having closed at €1.48.

In the telecommunications sector, GO plc declined by 1.1% to close the week at €3.55. A total of 23,000 shares were exchanged over seven trades.

In the insurance industry, Mapfre Middlesea plc and Global Capital plc closed 0.4% and 0.8% lower at €1.92 and €0.357 respectively- both trading on a slim turnover.

In the property sector, Malita Investments plc shares registered the weakest performance among its peers as the equity lost 6.1% of its value to close at €0.751.

Meanwhile, property counterparts Malta Properties Company plc and MIDI plc gained marginally to close 0.6% and 0.3% higher, at €0.51 and €0.32 respectively.

On Thursday, MIDI plc announced that its revised Masterplan for the restoration and redevelopment of Manoel Island has been submitted to the Planning Authority (PA) for its consideration and to the Environmental and Resources Authority (ERA) for Environmental Impact Assessment evaluation. A period of public consultation will now commence with both the PA and the ERA.

Elsewhere, Simonds Farsons Cisk plc and Medserv plc shares remained unchanged at €9.65 and €1.26 respectively.

On Tuesday, Loqus Holdings plc announced that the board approved the financial statements for the financial year ended June 30, 2017 and resolved that they be submitted for the approval of the shareholders at the forthcoming Annual General Meeting.

The group reported that it had registered a profit of €484,014 (2016: €268,549). Meanwhile, the Group’s revenue decreased from €3.893 million in 2016 to €3.476 million in 2017. The adjusted earnings per share increased from €0.08 in 2016 to €0.015 in 2017.