HSBC retreats despite improved profits and dividend

The share price of HSBC Bank Malta plc reversed some of yesterday’s 1.8% gain despite the reported increase in profitability during 2012 and the subsequent higher dividend payment. Yesterday, the Bank revealed an 8% increase in pre-tax profits during 2012 mainly reflecting higher profitability at the life assurance business as well as a number of cost savings in line with the Bank’s on-going restructuring. The Directors recommended a final gross dividend of €0.079 per share to all shareholders as at close of trading on 13 March. Although the equity is still trading with the right to the final dividend, the Bank’s share price dropped from an intra-day high of €2.80 to end this morning’s session at the €2.77 level representing a 0.7% decline from yesterday close. A total of 11,250 shares changed hands today.

The downturn in HSBC’s equity led to the first decline in the MSE Share Index in the last four sessions with a 0.1% drop to 3,334.396 points.

On the other hand, the share price of Bank of Valletta plc inched minimally higher to close at the €2.30 for the first time since early May 2011. A total of 25 deals were executed in BOV totalling 34,196 shares.

Similarly, MIDI plc’s equity edged minimally higher today to end the session at €0.311 on continued high volumes totalling 150,000 shares. The Company is scheduled to hold an Extraordinary General Meeting (EGM) on 22 March to discuss and approve the proposed disposal of ‘The Point’ shopping mall which should free up significant amounts of capital thereby enabling MIDI to pursue the remaining developments projects at Tigne Point and subsequently at Manoel Island.

Malta International Airport plc shares advanced by 0.8% to regain the €1.80 level across seven trades totalling 22,540 shares ahead of the full year results publication on 20 March. Meanwhile, yesterday afternoon, the German legacy carrier Lufthansa made an important announcement regarding increased capacity to Malta during the summer months.

The other four active equities, namely FIMBank plc, Simonds Farsons Cisk plc, Middlesea Insurance plc and Rs2 Software plc, ended the session unchanged.

On the bond market, the Rizzo Farrugia MGS Index eased minimally lower to 1,010.677 points as the benchmark 10-year Eurozone yields bounced back to the 1.44% level as investors seek comfort in the European Central Bank’s (ECB) outright monetary transactions. Under this programme the ECB would support the Italian bond market in the eventuality that Italy requests a bailout. The recent political impasse in Italy has led some analysts to believe that there could be a greater need that Italy will require financial aid.