This afternoon the European Central Bank held its interest rate unchanged at the level of 1.5% as the Bank focused on containing last month’s rise in the inflation rate across the eurozone as opposed to focusing on the region’s worsening debt crisis. Various international analysts are now expecting that during the press conference being held this afternoon, ECB President Jean Claude Trichet will indicate the possibility of a rate cut at next month’s monetary policy meeting. Today’s meeting was the last one for Mr Trichet who will be succeeded by Mario Draghi as President of the ECB from next month. Following this announcement, Eurozone benchmark yields retreated from 1.88% to 1.84%.
In an earlier announcement today, the Bank of England revealed that it maintained its benchmark rate at the historically low level of 1%. Furthermore, the Bank of England announced that it will be increasing its quantitative easing programme by a further GBP75 billion to a total of GBP275 billion in a bid to boost an economy which is moving towards stagflation – a combination of high inflation and low growth.
Prior to the interest rate decision by the ECB, the Central Bank of Malta stockbroker lowered its Malta Government Stock bid prices this morning in line with the continued recovery in yields which touched the 1.90% level this morning. As a result, the Rizzo Farrugia MGS Index slid 0.3% lower to 991.105 points.
On the equity market, the MSE Share Index shed 0.3% today to 3,107.151 points as three out of the six active equities closed lower. The share price of GO plc was forced 3.5% lower to €1.10 across three trades totalling almost 7,000 shares. Similarly, the equity of Malta International Airport plc slipped by 1.3% to €1.55 despite reporting a record September in terms of passenger numbers earlier this week. Selling pressure was also evident across Lombard Bank Malta plc shares as the equity slumped 3.3% back to the €2.59 level on volumes of 8,590 shares.
Meanwhile Bank of Valletta plc and HSBC Bank Malta plc both closed unchanged at €2.50 and €2.65 respectively. The only other active equity, Middlesea Insurance plc also ended today’s session unchanged at the €0.92 level on a small trade of 216 shares. Middlesea is expected to publish the results of Mapfre Internacional’s takeover bid by the end of this week.