MSE Index closes 1.97% lower
MSE Trading Report for week ending October 31, 2014
The Malta Stock Exchange (MSE) Index more than erased last week’s positive returns as it declined by 1.97 per cent, to close at 3,304.642 points. Six equities dragged the index into negative territory, seven gained ground and three closed unchanged. International Hotel Investments plc (IHI) shares were the worst performers for the week, while FIMBank plc shares headed the list of gainers.
Bank of Valletta plc (BOV) plc shares oscillated between a weekly high of €2.25 and a weekly low of €2.20, to ultimately close 0.8 per cent lower at €2.23. The banking equity witnessed the highest volume for the week of 231,330 shares, amounting to a turnover worth €518,603. After close of trading on Friday, BOV announced that the Board of Directors of the bank approved the audited financial statements for the financial year ended September 30, 2014 for the approval of the shareholders at the forthcoming Annual General Meeting (AGM) scheduled on December 17, 2014. The bank reported a profit before tax of €104.1m compared to €115.8m in 2013 representing a decrease of 10 per cent.
The Board resolved to recommend the payment of a final gross dividend of €0.0925 per share, which would make for a total gross dividend for the year of €0.135 per share. If approved, the final dividend will be paid on December 18, 2014 to the shareholders on the bank’s register as at close of business November 17, 2014. Moreover, the Board recommended a bonus issue of one share for every 11 shares held, which will be allotted to shareholders on the bank’s share register as at close of business on January 16, 2015. The bonus issue will be funded by a capitalisation of reserves of €30 million.
Last Sunday, the bank announced that it had successfully undergone the comprehensive assessment carried out by the European Central Bank (ECB) on 130 banks in the euro area which have been considered as significant credit institutions. The comprehensive assessment is a financial health check on banks that started in November 2013 and took a year to complete, ending in October 2014. Results for all banks were published last Sunday by the ECB – which shall assume responsibility for the direct supervision of these banks next Tuesday. BOV was deemed as a significant European bank in view of its standing as the largest credit institution in Malta. The comprehensive assessment consisted of an asset quality review (AQR) – which assessed the adequacy of banks’ asset valuation, classification of non-performing exposures, collateral and provisioning; and a stress test – which evaluated the resilience of banks’ balance sheets to stress scenarios. The stress test was performed with the European Banking Authority (EBA). The outcome of the comprehensive assessment was expressed as the Common Equity Tier 1 (CET1) ratio which would result from the integration of the AQR and the quality-assured stress test. The CET1 ratio is a widely used measure of the resilience of banks to unexpected losses. It outlines the risks assumed by a bank to its regulatory capital and reserves. BOV commenced the comprehensive assessment with a CET1 ratio of 11.2 per cent. This decreased to 10.71 per cent as a result of the AQR assessment. The CET1 ratio rose to 13.22 per cent after application of the baseline scenario, compared to the threshold of eight per cent set by the ECB. This fell to 8.92 per cent after the application of more severe adverse scenario, compared to the threshold of 5.5 per cent. BOV reported that it will continue to be vigilant in the management of risks and will strengthen its corporate governance to ensure that it continues to perform its role in a sustainable and effective way.
The same comprehensive assessment was carried out on HSBC Bank Malta plc (HSBC). After adjusting for the impact of the AQR, the bank’s 2013 CRR/CRD IV transitional basis common equity tier 1 (CET1) capital ratio was 9.02 per cent – exceeding the ECB’s threshold of 8%. Under the baseline scenario, the bank’s lowest CET1 ratio is 9.26 per cent and under the adverse scenario – exceeding the ECB’s threshold of 8%. Under the adverse scenario, the bank’s lowest CET1 ratio is 8.91 per cent – exceeding the ECB’s threshold of 5.5%. During the week, the equity witnessed 23 trades of 46,919 shares and shed a significant €0.065 of its share price, closing 3.2 per cent lower at €1.97.
On a positive note, FIMBank plc shares appreciated by five per cent as four trades of 57,431 shares were struck, closing at $0.63. Likewise, Lombard Bank Malta plc shares appreciated by a further 1.2 per cent as three deals of 8,410 shares were executed, closing at €1.75 – marking a three per cent increase for the month.
IHI shares took a 10 per cent pounding as 12 deals of 46,171 shares were concluded, closing €0.06 lower at €0.54. Meanwhile, Middlesea Insurance plc shares declined 0.6 per cent as a sole transaction of 2,000 shares was dealt, to close at €0.994.
The local airport operator Malta International Airport plc fell by €0.03 as 46,700 shares changed ownership, to close 1.3 per cent lower at €2.33. Likewise, GO plc shares fully reversed last week’s positive performance as its share price dropped by €0.06 on four trades of 9,942 shares to close at €2.64.
During Thursday’s session,Simonds Farsons Cisk plc shares reached an all-time high of €3.011 when two transactions of 1,400 shares were executed to close just shy of this record high at €3.01 – the equity gained 1.3 per cent on the previous week and 9.1 per cent during October. Similarly, MaltaPost plc shares traded at a record high of €1.20 during Wednesday’s session, to then end the week 1.83 per cent higher at €1.17. The postal service operator’s shares were active across five trades of 6,893 shares.
In the I.T. sector, 6PM Holdings plc shares traded flat at £0.72 across two deals of 500 shares.
The Board of Directors of Loqus Holdings plc approved the financial statements for the financial year ended June 30, 2014. The group registered a loss for the year of €247,225, compared to a €577,308 and a €840,748 loss in 2013 and 2012 respectively. Revenue for the period under review amounted to just over €3.5 million, an increase of 3.8 per cent from 2013. This equity was not active during this week.
The other non-movers for the week were Plaza Centres plc and MIDI plc as they closed flat at €0.61 and €0.22 respectively. The former witnessed two trades of 24,010 shares, while the latter was negotiated across four deals of 141,500 shares. On the other hand, Tigne Mall plc shares climbed one per cent higher as two deals of 19,000 shares were executed, to close at €0.53.
Medserv plc shares strengthened by 2.3 per cent across four transactions of 49,600 shares, closing €0.03 higher at €1.33. Likewise, Malita Investments plc shares advanced by 3.6 per cent over two deals of 27,100 shares, to close at €0.58.
In the corporate bond market turnover amounted to €907,112 spread across 29 issues of which six lost ground, 13 edged higher and ten closed unchanged. The 7.15% Mediterranean Investments Holding plc Euro 2015-2017 locked in the best performance as it recovered by 5.4 per cent to close at €98. On the other hand, the 6% Island Hotels Group Holdings plc € 2024 stumbled by 2.8 per cent, to close at €104.01. Premier Capital plc (Premier) reported that it has been notified by its ultimate shareholder, Hili Ventures Limited, that PTL Holdings plc – a member of the Hili Ventures Group and sister company of Premier – has submitted an application to the listing authority of the MFSA to authorise the admissibility of a new bond issue. Holders of the 6.8% Premier Capital plc bonds 2014-2020 appearing on the bond register at the central securities depository as at November 3, 2014(that is trades executed up to and including last Thursday) will be given preference over the general public to subscribe to the new bonds up to an aggregate of €5 million, subject to regulatory approval.
In the sovereign debt market 25 issues were active of which ten declined, 13 increased in value and two closed unchanged. The 4.3% MGS 2033 (I) headed the list of gainers as it appreciated by 0.7 per cent, to close at €112.54. Meanwhile, the 4.3% MGS 2022 (II) was the most liquid issue as it witnessed a turnover volume of just under 4.4m nominal.