MSE Index gains as banks move higher
MSE Trading Report for week ending August 29, 2014
The Malta Stock Exchange (MSE) Index closed higher for the first week in four as banking equities closed in positive territory. The positive sentiment surrounding the two major banks influenced seven other equities to close higher while five closed in the red. The index gained 0.5 per cent on the week following three weeks of decline, during which it shed 3.5 per cent. In August, the local equity index declined by 2.8 per cent completely reversing the gain witnessed in July.
In the banking sector Bank of Valletta plc (BOV) topped the list of gainers with a 1.7 per cent gain while Malta International Airport plc (MIA) shares posted a 2.3 per cent gain. On the downside Simonds Farsons Cisk plc was the main detractor as the beverage company shed almost 6 per cent on thin volumes during the mid-week session as 550 shares were traded to close at €2.70.
International Hotel Investments plc (IHI) shares declined by another 1.5 per cent following last week’s 7 per cent decline as investors continue to weight the political situation in Libya and Russia, two countries where IHI has operations. A total of 36,000 shares were traded as the equity’s price fluctuated between a weekly low of €0.62 and a high of €0.65. Year-to-date IHI shares lost 36 per cent.
In the banking sector HSBC Bank Malta plc (HSBC) shares remained in recovery mode as the share price returned to the €2 level. HSBC gained 0.8 per cent or €0.015 as 68,000 shares were dealt over five trading sessions. Notwithstanding this recovery year to date the equity is still underperforming the broad index by 4 per cent.
BOV shares closed the week at €2.155 as trading volume declined slightly to 98,000 shares. Throughout the week the share price of BOV traded between a high of €2.17 and a low of €2.121. Lombard Bank plc shares gained 0.7 per cent to close at €1.56 as two trades of 40,000 shares were executed. On similar trading volume FIMBank plc gained 0.8 per cent to close at $0.655.
In the telecoms and IT sector GO plc shares closed just shy of the €2.50 price level at €2.489 gaining 1.6 per cent over the previous week’s close as just over 90,000 shares were traded. This week’s gain further enhanced the GO’s performance as in the month of August its share price gained almost 5 per cent. Meanwhile Crimsonwing plc closed flat at €0.81on 12,400 shares while one trade of 245,000 shares in 6PM Holdings plc sent the equity’s price lower by 2 per cent.
On Thursday, after close of trading the Board of Directors of RS2 Software plc announced the interim financial statements for the period ended June 30, 2014. The company reported that the core business of the Group continued to be strong with new licence agreements – one of which for a total contract value of €16.5m. However the Group’s first half results show a contraction in revenue of 20.2 per cent when compared to the same period last year. Conversely, the Group member RS2 Smart processing Ltd recorded an increase in revenue of 83.5 per cent when compared to June 2013. Profit before tax stood at €3m down from €5.3m during the same period last year. The directors did not recommend an interim dividend. On Friday, the share price of RS2 gained 1 per cent or €0.03 closing at a new high of €2.75.
Middlesea Insurance plc was the only financial equity to end the week lower as the insurance firm shed 2 per cent to return to the €0.93 level.
During the week the Board of Directors of Global Capital plc approved the half-yearly reports for the six months ended June 30, 2014. The Group registered a loss before tax of €966,897 for the first six months of 2014 compared to a profit of €65,541 for the same period last year. The results were negatively impacted as the Group registered unrealised fair value losses of €0.4m due to the decline in the MSE index. Moreover, the Group incurred restructuring costs which are not expected to recur. The life insurance arm registered a profit before tax of €0.7m compared to €0.5m last year while revenues at the health insurance agency remained similar to those registered in the prior period. The directors added that in line with the Group’s strategy to focus on its insurance business, Global Capital plc will, subject to regulatory approval, be exiting its investment and advisory business. No trades were recorded throughout the week while during the month of August the equity’s price surged by 20 per cent.
MIA shares gained 2.3 per cent or €0.05 to close at €2.25 as one deal of 2,000 shares was executed on Thursday. Tigne Mall plc shares gained 2 per cent to end the week at €0.525 as the Company announced higher interim profits when compared to the same period last year. In fact the Company registered a profit before tax of €0.9m compared to €0.7m registered in 2013. This increase is mainly attributed to the decrease in finance costs resulting from the reduction in bank borrowings and an increase in rental revenue. Revenue for the period under review amounted to €2.5 million, an increase of 6.7 per cent over 2013. The directors approved an interim net dividend of €0.0063 to be paid on September 26, 2014.
Meanwhile, Malita Investments plc shares closed flat at €0.54 as minimal price changes were recorded during the week. Over 250,000 shares were traded across six transactions. On the negative side thin trading in MaltaPost plc shares sent the equity 1.8 per cent lower to close at €1.12.
The Board of Directors of the Midi plc approved the half-yearly financial report covering the six months ended June 30, 2014. The company registered a loss after tax of €0.99 million, compared to a loss €1.66 million registered in 2013. The company is also projecting an operational loss for the 2014 financial year. These results are directly attributable to the loss of momentum experienced over the past few years in the development of the Tigne Point project, where the permits for the development of the Tigne North phases were frozen pending the issue of full development permits, which in turn suffered from delays. This meant that following the commencement of works on the T10 apartments in 2008, approximately five years had to pass before works on the Q1 apartments could commence in 2013. Revenue for the period under review amounted to €782,154, a decline of 81 per cent from 2013.
On Monday the board of directors of Santumas Shareholding plc announced that it is scheduled to meet on September 1, 2014 to consider the submission of an application to delist the company from the MSE under its current format as a collective investment scheme and to relist the company as a property holding company. On Thursday, the equity’s price jumped by 10 per cent to €2.20.
In the fixed-income market yields on debt issued by the Maltese Government declined across the board as the Central Bank of Malta revised its bid prices higher. The long-dated issues were the most notable gainers with the 4.8% MGS 2028 gaining 1.6 per cent. The recently issues 4.1% MGS 2034 gained 0.7 per cent closing at €105.
In the corporate bond market bonds issued by IHI and its sister company Mediterranean Investment Holdings plc were the main movers with the latter’s 7.15% MIH 2015 – 2017 issue losing 5 per cent while the 6.25% IHI 2017 – 2020 declining by 1.4 per cent.