Investors shy away from sovereign debt bonds
MSE Trading Report for week ending November 7, 2014
Activity in the sovereign debt market amounted to just under €14 million spread across 25 issues as investors liquidated some of their recent gains as 21 issues fell and four edged minimally higher. The recently issued 4.1% MGS 2034 (I) experienced the worst loss for the week shaving 0.5 per cent off its price, to close at €109.43 and also witnessing the highest turnover of slightly over €4.9m.
Meanwhile, the MSE Index recovered some of last week’s losses as it advanced by 0.28 per cent, to close at 3,313.952 points. A total of 11 equities were active of which four gained ground, three fell in value and four closed unchanged. International Hotel Investments plc (IHI) was the best performer erasing some of last week’s decline, while MIDI plc shares headed the list of fallers.
In the banking industry, Bank of Valletta plc was the only equity with a positive return registering a 0.9 per cent gain across 99 trades of 286,199 shares, to close at €2.25. Conversely, HSBC Bank Malta plc shares declined by a further 0.5 per cent as 28 deals of 160,313 shares were executed, closing at €1.96. Meanwhile, FIMBank plc shares traded flat at $0.63 across two transactions of 18,569 shares.
IHIshares recouped 3.7 per cent as 13 trades of 57,267 shares were struck, closing at their weekly high of €0.56. This notwithstanding, this equity is currently the worst performer this year with a 41.1 per cent decline.
In its Interim Directors’ Statement issued on Monday, the company reported that most of its hotels performed better in the first nine months of the year than in the corresponding period in 2013, except for the hotels in Tripoli and St Petersburg – due to external circumstances. Namely, the Corinthia Hotel St George’s Bay and the Marina Hotel in Malta have registered their best performance since their opening. Positive performances have also been achieved at the Corinthia Hotels in Lisbon, Budapest and Prague. The company’s 50 per cent owned hotel in London has also recorded an improved performance over 2013. In Libya, the Corinthia Hotel Tripoli has remained operational and is currently the only international five-star hotel open in the city. The management has continued to adapt to low occupancies and has implemented extensive cost savings with the objective to break-even over the year. The commercial centre of offices adjoining the hotel remains in full operation and occupancy. The Corinthia Hotel St Petersburg has also been affected by a reduction in corporate travel to the Russian Federation as a result of international political issues. The management is currently targeting the domestic Russian market and has opened a sales office in Moscow and implemented Russian-language online marketing.
Plaza Centres plcshares appreciated by 1.6 per cent over six deals of 546,969 shares, to close at €0.62. In the same industry, Tigne Mall plc in its Interim Directors’ Statement announced that following the publication of the company’s condensed interim financial statements for the six month period ending June 2014, the Mall continued to be fully let and has also experienced an increase in visitor footfall over the same period last year. The company generated healthy levels of cash from operations and its financial position remains positive and in line with projections. It has recently secured planning consent for a new 550 square metre outlet at which works are expected to start in the coming months, and will be available for letting next year. The equity was not active this week.
MaltaPost plc registered an increase in its share price for the third consecutive week advancing by a further 0.9 per cent over a sole transaction of 2,009 shares to close at €1.18. Conversely, MIDI plc succumbed to selling pressure as its share price dipped by 4.6 per cent as three trades of 344,000 shares were executed, to close at €0.21. Likewise, GO plc shares dropped by a further 1.7 per cent as 25 trades of 37,819 shares were negotiated, closing at €2.595.
Malta International Airport plcshares closed unchanged at €2.33 as 36,100 shares changed ownership. The local airport operator saw a 2.9 per cent increase in traffic in October – welcoming a total of 421,726 passengers. The UK, being the airport’s top market by representing over 28 per cent of all traffic, saw a minimal drop of 0.8 per cent over October last year. France registered the largest growth last month of 25.8 per cent, due to increased capacity on Paris routes and the recent introduction of the Nantes route. The other core markets, Italy and Germany, saw an increase of 8.9 per cent and 2.8 per cent respectively. A 6.7 per cent increase was registered between January and October compared to last year’s figures as the airport hosted a total of 3,807,534 passengers. The maximum take-off weight decreased by 0.3 per cent and cargo mail increased by 12.1 per cent.
The other non-movers this week were Simonds Farsons Cisk plc and Santumas Shareholdings plc as they closed unchanged at €3.01 and €2.00 respectively. The former witnessed two trades of 1,596 shares, while the latter was negotiated across a sole transaction of a mere 24 shares.
In its Interim Directors’ Statement, Grand Harbour Marina plc reported better operating results for the group during the first nine months of 2014, with improvements in both Grand Harbour Marina in Malta and at IC Cesme Marina in Turkey, in which the group holds a 45 per cent interest through a joint venture with the IC Cecen Group. The group registered a profit before tax of €0.29 million, compared to a €0.02 million loss registered in 2013. Revenue for the period under review amounted to €4.35 million, an increase of nine per cent from 2013.
In the corporate bond market turnover amounted to €762,395 spread across 32 issues of which eight dropped in value, 16 gained and eight closed unchanged.
Mediterranean Investments Holding plc (MIH) announced that the outstanding 7.5% MIH Euro Bonds 2012-2014 (the maturing bond)will be redeemed on December 4, 2014. The last trading date of these bonds will be next Friday. The bondholders who have elected to transfer their holding from the maturing bond to the 6% MIH 2021 bond, will receive interest of 7.5 per cent from December 4, 2013 to June 22, 2014 and 1.5 per cent from June 23, 2014 to December 3, 2014. Meanwhile, new bondholders who invested in the 6% MIH 2021 will earn interest from June 23, 2014, with the first annual interest payment occurring on June 22, of next year.
During the week, United Finance plc announced the basis of acceptance for the issue of the new €8.5 million 5.3% unsecured bonds maturing in 2023. The bond offer was over-subscribed and hence the intermediaries’ offer was cancelled. Holders of the maturing bonds (6.75% United Finance plc bonds 2014-2016) that elected to transfer their holding from the maturing bonds to the new bond were allocated their full subscription amount. Furthermore, the company decided to satisfy the first €1,000 of subscriptions for additional bonds and a further 8.6 per cent of the remaining balance of all such applications. All amounts allocated were rounded to the nearest €100. Refunds of unallocated monies were effect on Friday.
Hal Mann Vella Group plc also announced its allocation policy for the issue of €30 million 5% secured bonds due in 2024. The company will be satisfying the first €1,000 and allocating a further 17.0967 per cent of the remaining balance of all applications from the general public. All amounts being allocated have been rounded to the nearest €1000. Refunds of unallocated monies will be made by next Monday.
Mediterranean Bank plc announced the issue of €15 million 6% Subordinated Unsecured bonds 2019-2024 in Euro and Pounds Sterling (with an over-allotment option of €10 million). The issuer is giving holders of its 6.25% bonds 2015 (the exchangeable bonds), that were included on the bond register as at November 3, 2014 preference to subscribe to the new bonds by surrendering the exchangeable bonds. Minimum application is of €25,000 or GBP 20,000. The net proceeds from the bond issue will be used by the issuer to purchase the 6.25% bonds due on October 30, 2015 from existing bondholders, to meet part of its general financing requirements and will constitute Tier 2 capital of the issuer in terms of the Capital Requirements Regulation. Investors should refer to the prospectus dated November 3, 2014.
PTL Holdings plc – a wholly owned subsidiary of Hili Ventures Limited also announced the issue of a €36 million 5.1% Unsecured Bonds due in 2024. The minimum to subscribe in the pre-placement offer is of €25,000 while the minimum amount in the public offer has been set at €2,000. The net proceeds from the bond issue will be used by the issuer to repay a short term bank facility, which funds were utilised to finance the acquisition of SAD; to settle the remaining consideration due to the selling parties in relation to the acquisition of APCO; to repay loans issued by Hili Ventures Limited for the purchase of SAD and APCO; to settle expenses incurred in the acquisition of SAD and APCO, to refinance bank loans and for working capital purposes. Investors should refer to the prospectus dated November 3, 2014.