Continued high trading activity in BOV shares

The high trading activity in Bank of Valletta plc shares continued this morning as a further 89,769 shares changed hands today with the share price easing 0.8% lower to the €2.40 level. Investors have until next Friday to gain entitlement to the recommended final gross dividend of €0.08 per share.

Similarly, the share price of HSBC Bank Malta plc ended in negative territory today with a 1.5% drop to the €2.65 level but on lower volumes of 10,600 shares.

Meanwhile Malta International Airport plc closed unchanged at the €1.70 level on a single trade of 5,000 shares. On Monday, MIA issued a Company Announcement and a press release stating that it is giving a 100% refund to all scheduled airlines on their landing fees for the current winter schedule between the months of November 2011 and March 2012. It was later revealed that this initiative will result in a loss of revenue of circa €1.3 million for the airport operator.

Lombard Bank Malta plc was the third company with a December year-end to publish its Interim Statement to provide an update to the market since the publication of their financial statements as at 30 June. In this morning’s announcement, Lombard explained that the Bank maintained its prudent and cautious stance by focusing on maintaining its sound capital base and its prudent loan to deposit ratio. Moreover, it was revealed that since Lombard has no exposure to countries affected by the sovereign debt problems in the euro zone, the Bank is safeguarded and therefore it can continue to operate through the prevailing crisis whilst maintaining a sound financial position. Lombard also explained that profitability levels since the start of 2011 are similar to those registered during the corresponding period last year despite profit margins remaining under pressure. During the year ended 31 December 2010, the Lombard Bank Group reported pre-tax profits of €13.9 million (+7.8%) while during the six months ended 30 June 2011, Group profitability edged 3.6% higher to €7 million.

On the bond market, the Rizzo Farrugia MGS Index eased only marginally lower to 989.921 points as yields inched fractionally higher this morning on the back of initial increased confidence following yesterday’s decision by the Italian Prime Minister following the adopting of renewed austerity measures. However, during the course of the day, uncertainty about Italy’s ability to deliver on promised economic reforms resurfaced sending yields on Italian bonds above the unsustainable level of 7%. In turn, this triggered a sharp downturn in yields which are now back at the 1.72% level on a renewed ‘flight to quality’.

Tomorrow afternoon the Treasury is scheduled to publish the offer prices of next week’s new stock issues. Last week, the Treasury announced the issuance of two new Malta Government Stocks. The two issues available for subscription by the General Public for amounts up to €100,000 (nominal) are the 4.25% MGS 2017 (III) and the 5.2% MGS 2031 (I) for a total aggregate amount of €100 million with an over-allotment option of another €44 million. The prices of these stocks will be announced on Thursday 10 November ahead of the subscription period between Monday 14 November and Wednesday 16 November. Further details available at http://rizzofarrugia.com/news-events/2011/new-stock-issues-mgs10/.