Further strong gains for Malta Government Stock prices

This morning European financial markets were characterised by further sharp losses as concerns on the region’s sovereign debt crisis reached fever high following a sell-off across Italian banks. Talk of contagion among European nations from a Greek default is increasing with heightened doubts also about Italy and Spain. As a result, the euro plummeted to a new 4-month low against the US Dollar of US$1.38 whilst investors’ “flight to safety” forced 10-year Eurozone yields to drop to an 8-month low of 2.51%. Markets recovered slightly late morning but the situation remains volatile.

In response to the sharp downturn in eurozone yields, the Malta Government Stock bid prices quoted by the Central Bank of Malta were revised strongly upwards this morning sending the Rizzo Farrugia MGS Index up by 0.6% to 983.696 points – the highest level since 24 February 2011. It is noteworthy to highlight that the bid price of the 4.25% MGS 2017 (III) is at a new all-time high of 102.50%. Over €200,000 (nominal) of this stock traded during this morning’s session. Meanwhile, in the longer-dated 5.25% MGS 2030 (I), the bid price rallied by a further 143 basis points to 103.54%. However, in view of the large amounts on offer and the slight recovery in yields late morning, the price failed to reach this level and advanced by 101 basis points to 103.12%. Trading activity in the 19-year paper rose to almost €4.7 million (nominal).

On the equity market, the MSE Share Index edged 0.1% higher to 3,321.212 points as Bank of Valletta plc closed 0.7% higher at the €2.699 level after recovering from an intra-day low of €2.65. Almost 20,000 BOV shares traded this morning across fourteen transactions.

Meanwhile the share price of Malta International Airport plc eased 0.6% lower to a fresh 9-month low of €1.59 as the Airline Pilots Association (ALPA) continue to threaten to strike next Saturday if their demands are not met. The Prime Minister and the Minister of Finance have reportedly set up a meeting for tomorrow with the ALPA. A single trade of 5,000 MIA shares was transacted today at €1.59.

The share price of RS2 Software plc maintained the €0.53 level with volumes increasing to almost 89,000 shares today.