GO opposes Forthnet’s right issue

This morning GO plc’s Board of Directors announced that they have resolved to instruct Forgendo Limited, the joint-venture investment vehicle equally owned by GO and its parent company Emirates International Telecommunications Limited (EITL) which owns 41.27% of Forthnet S.A., to vote against the €30 million rights issue of Forthnet during the Extraordinary General Meeting being held today. The Greek telecoms company is seeking shareholder approval for a number of changes to its capital structure and the €30 million rights in issue in line with the conditions of its recent restructured debt. Following this morning’s announcement, GO’s share price had a muted reaction as it edged 0.6% higher from its all-time low to close at the €0.895 level on volumes totalling 12,561 shares. Despite this morning’s slight upturn, GO’s equity still ended the week as the worst performer with a drop of 5.8%.

Elsewhere in the local equity market, HSBC Bank Malta plc shed 1.2% back to the €2.57 level on a single trade of 1,100 shares while Bank of Valletta plc recovered from an intra-day low of €2.28 to close unchanged at the €2.29 level on volumes of over 8,800 shares. BOV’s equity closed the week 0.13% lower after adjusting for the bonus issue.

The equities of 6pm Holdings plc and Medserv plc were active for the first time in several weeks during this morning’s session. The share price of the IT company jumped 25% to regain the GBP0.40 level across four trades totalling 21,000 shares. Meanwhile, 1,310 Medserv shares traded unchanged at the €3.95 level.

On the bond market, the Rizzo Farrugia MGS Index was marginally unchanged today at 988.345 points to end the week 0.2% higher. This reflects the drop in benchmark Eurozone yields closer to the 1.8% level despite yesterday’s comments by the European Central Bank President Mario Draghi that “there are some signs the euro-area economy is stabilizing”. Moreover, the successful debt auctions by Germany, Spain and Italy earlier this week also failed to comfort the markets which are still focused on the downside risks as a result of the ongoing sovereign debt crisis. In fact, concerns were reignited this afternoon following the 3-year bond auction by Italy which showed that the country just managed to raise the amount needed. This resulted in the benchmark Eurozone yield to slide below 1.8% as well as forcing the euro below the US$1.28 level against the US Dollar.