BOV’s equity climbs 11.4% higher in August

Today marks the end of August during which the MSE Share Index shed 0.4% to 3,090.469 points. During August just under €2 million worth of shares traded. August ranking as the second lowest monthly activity this year.

This month’s outperformer was Bank of Valletta plc as its share price rallied by 11.4% to the €2.29 level on renewed demand for the Bank’s equity ahead of the full-year results. BOV’s financial year ends on 30 September and the bank generally publishes its preliminary full-year results by the end of October.

Meanwhile, the other banking shares moved in opposite directions. HSBC Bank Malta plc retreated by 4.2% to €2.75 during the month of August with FIMBank plc sliding 5.9% to USD0.80 as investors await further developments with respect to the potential takeover by Burgan Bank.

More significant declines were registered in the equity of Lombard Bank Malta plc which closed in negative territory for the eighth consecutive month with a further 10.6% drop to a new 7-year low of €1.95. The latest monthly drop mainly reflects the 36.5% drop in profitability to €2.6 million mainly as a result of the negative impact at the postal subsidiary from the amendments in the tariffs of the Universal Postal Union (UPU) on international mail. In fact, MaltaPost plc shares rank as the worst performer of the month with a 29.2% drop to a new 3-year low of €0.63. Lombard and MaltaPost also rank as the worst performers since the beginning of the year.

GO plc is also amongst the worst performers during the past four weeks as its share price continued to slip away from its 2012 high of €1.20 reflecting the renewed concerns by investors on the possibility of an additional equity injection into Forthnet. The Greek company is planning a €30 million rights issue and the Directors of GO will only decide whether to participate or not in a board meeting to be held by the end of September. In the meantime, this morning GO published its half-year results revealing a significant turnaround in profitability to €15.3 million compared to the €17.8 million loss registered during the first six months of 2011. The turnaround was due to the €11.4 million gain registered on the exchange of properties between the Group and the Government of Malta in May 2012 and a substantial decline in the impairment from Forthnet. Further details on results available at https://rizzofarrugia.com/news-events/2012/interim-results-go13/.

On the bond market, the Rizzo Farrugia MGS Index edged 0.3% higher in August to 997.103 points. The bond market awaits the promised actions by the European Central Bank (ECB) to counteract the prevailing sovereign debt crisis in the Eurozone. Markets also await new stimulus measures by the US Federal Reserve.

On the local market, differing results were issued by a number of bond issuers. On the one hand, GAP Developments plc reported losses as it completed construction works on the Fort Cambridge development. Meanwhile, PAVI Shopping Complex plc registered yet another set of record results as the popularity of the supermarket increases given its competitive pricing and surrounding amenities complementing the complex. Dolmen Properties plc also announced another strong operational performance and the company stated that it will be redeeming its outstanding balance of the 6% Secured bonds on 20 November 2012.

This afternoon, the Treasury announced the results of its Malta Government Stock tender offer comprising two floating rate stocks. The Treasury received 13 bids totalling €66.9 million out of which it allotted €56.4 million as follows: €25 million in FR% MGS 2017 (V) and €31.4 million in the FR% MGS 2018 (IV).