High trading activity in MGS trade as prices rise sharply

During today’s trading session on the Borza, the share prices of the two large banks continued to recover but the main highlight was the high trading activity that took place across a number of Malta Government Stocks as the bid prices quoted by the Central Bank of Malta stockbroker soared in line with the drop in Eurozone yields to a new 9-month low of close to 2.40%. This helped the Rizzo Farrugia MGS Index climb 0.3% to 984.976 points – the highest level since 20 January.

The crisis surrounding the eurozone debt markets widened in recent hours with 10-year bond yields of Spain and Italy rising to record level of over 6%. Italian authorities are holding a meeting to discuss ways on how to prevent the country’s cost of debt to rise to unsustainable levels.

On the local market, the bulk of today’s trading activity amounting to €5 million was centred around the 5.25% MGS 2030 (I) with over €3 million (nominal) changing hands. Although the indicative bid price of the Central Bank was initially set at 103.29% (up 0.48 percentage points from the previous bid price), the initial trades took place at 103.19% and the price eased to a close of 102.95% in response to the substantial offers coming to the market.

On the local equity market, the MSE Share Index gained 0.7% to 3,288.819 points as the share prices of the two large banks continued to recover. Bank of Valletta plc advanced by a further 2.3% to regain the €2.69 level across seven trades totalling almost 8,000 shares. Meanwhile, the shares of HSBC Bank Malta plc had a volatile session. The share price initially climbed to €2.985 but the equity failed to hold on to this level as fresh offers entered the market. HSBC closed at the €2.90 level representing a 0.5% rise over the previous close on activity of over 19,500 shares.

The other six active equities all closed unchanged on low volumes with the exception of MaltaPost plc. The postal operator held on to the €1.00 level with activity rising to over 47,000 shares. Meanwhile Plaza Centres plc and RS2 Software plc shares continued to trade at their 2011 highs of €1.80 and €0.55.

This afternoon Middlesea Insurance plc announced that following the special trade affected on the Malta Stock Exchange whereby Mapfre Internacional S.A. acquired 18.3 million shares from Munich Re at €0.63 per share, the Company has accepted the resignation of the Director Dr Michael Sparberg who was previously appointed by Munich Re. No replacement has been nominated as yet while details of the takeover bid to be launched by Mapfre are still forthcoming.