Local equities lower by 1.4%

MSE Daily Trading Report, 07 August 2020

The MSE Equity Total Return Index ended the session 1.410% lower at 7,757.644 points. A total of 10 equities were active, of which seven lost ground while three remained unchanged. A total turnover of €80,170 was generated over 26 deals.

In the banking industry, both major banks lost ground. BOV issued an announcement with reference to recent articles whereby it was reported that the bank made an out-of-court settlement offer to the Deiulemar bondholders in Italy. A company announcement was not made about the offer because, as is customary and proper in settlement negotiations, it was made on a confidential basis. Had the offer been accepted, an announcement would then have been made. The rejection of the offer made any announcement redundant, but for the fact that the offer was improperly leaked in Torre Annunziata.

The bank has consistently been advised by its lawyers that the Deiulemar case is completely without merit. The advice of the bank’s lawyers has recently been independently confirmed by Italy’s leading legal authority in this area, and that advice has been brought to the attention of the court. This notwithstanding, the bank faces a most unusual fair hearing risk in this litigation. It is seeking to eliminate that risk through proceedings filed before the European Court of human rights, and other measures. However, the risk at first instance remains. In view of this risk, and because of the consequential costs it may have to incur, it made commercial sense to offer a settlement to the curators in order to close this matter. Therefore, the offer was not a result of any change in the bank’s conviction that the claim is entirely unmeritorious; it was simply an attempt at finding a pragmatic, commercial solution.

BOV shares lost 4.12% of their value to close at €0.93. Eight deals involving 31,415 shares were executed, worth €29,527. Similarly, HSBC Bank Malta plc closed the session 4.54% lower at €0.84 as 4,800 shares change hands across four transactions. Total turnover stood at €4,063.

GO plc announced that the board approved the group interim unaudited financial statements for the half-year period ended June 30, 2020. Revenue increased by 7.8% when compared to the same period of the previous year as it stood at €91.6 million. The main driver relates to the revenue growth of €5.6 million in Cablenet which growth was fuelled by the company’s diversification into the premium sports content. Earnings before interest, tax, depreciation and amortisation (EBITDA) remained stable at €35.5 million when compared to the same period of 2019. However, operating profit decreased by €3.9 million mainly due to higher depreciation and amortisation charges. Meanwhile, profit before tax declined by almost 31% to €8.97 million when compared to the first half of 2019.

The group’s financial position remains healthy as at June 30, 2020, with a total asset base of €327.7 million. During the first six months of 2020, borrowings net of cash holdings increased from €56.1 million as at December 31, 2019 to €65.7 million as at June 30, 2020.

The board proposed a revised final dividend of €0.10, over and above the special interim dividend of €0.41 paid during 2019.

The equity closed 1.82% lower at €3.24 – a total of two deals managed to generate a total turnover of €5,539. On the same note, Malta Properties Company plc, also saw a decline of 1.89% to close the session at €0.52.

The board of BMIT Technologies plc approved the group interim unaudited financial statements for the six-month period ended June 30, 2020. The group generated a 4.9% increase in revenue when compared the same period of 2019, as it stood at €11.7 million. The main contributors for this growth in revenue were cloud services (+47%) and connectivity services (+13%). Earnings before interest, tax, depreciation and amortisation (EBITDA) were in line with the same period of last year at €5.1 million. Meanwhile, the group recorded a 4.5% increase in profit before tax as it amounted to €3.9 million.

As at June 30, 2020, the group’s total assets amounted to €25.5 million, translating into a 10% growth. Following the dividend payment of €4.4 million, the group still had a significant cash balance of €3.6 million at the end of the period.  Total liabilities for the first half of 2020 stood at €16.1 million, including bank borrowings of €3.6 million, related to the Handaq property purchase. The loan is repayable over 10 years with four years moratorium, hence, was classified as non-current.

A dividend for the year ended December 31, 2019 of €0.02 per share was declared and paid during the period ended June 30, 2020.

The equity did not record any trading activity during the session.

In the property sector, MIDI plc share price depreciated by 6.88% to close the session at €0.352. A total of 31,500 shares exchanged hands over two deals, generating a total turnover of €11,107.

A single deal of 512 shares saw the price of PG plc close 0.51% lower at €1.94. On the same note, Simonds Farsons Cisk plc traded lower by 1.30% at €7.60 as three deals involving 2,219 shares were executed. Total turnover stood at €16,193.

Elsewhere, Plaza Centres plc, Mapfre Middlesea plc and RS2 Software plc were all active but remained unchanged at €0.94, €2.00 and €2.34, respectively.

Santumas Shareholdings plc announced that its forthcoming Annual General Meeting is scheduled to be held on October 22, 2020. The equity did not record any trading activity during the session.

In the Sovereign Bond market, out of 10 active issues, seven closed in the in the green while two closed lower. The 2.2% MGS 2035 (I) registered the largest gain during the session as the price increased by 4.17% at €125. Conversely, the 4.65% MGS 2032 (I) lost 1.26%, ending the session at €145.15.

In the Corporate Debt market a total of 17 issues were active of which 10 lost ground while two closed higher. The 4% SP Finance plc Secured EUR Bonds 2029 headed the list of gainers as it closed 0.5% higher at €101.50. On the other hand, the 4.5% Medserv plc 2026 registered the weakest performance during the session as the price closed 4.04% lower at €95.

In the Prospects MTF market, two issues were active. The 5.5% Testa Finance plc € Bonds 2029 closed 0.01% higher at €98.90. Meanwhile, the 5.35% D Shopping Malls Finance plc € Unsecured 2028 lost 0.1%, ending the session at €97.90.

The Equities traded today were:

The Corporate Bonds traded today were:

 The Government Stocks traded today were:

The Prospects MTF bonds traded today were:

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. Jesmond Mizzi Financial Advisors Limited is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange. 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, or on Tel: 21224410, or email [email protected].