Malta Government Stock prices retreat

This morning the Central Bank of Malta stockbroker lowered its Malta Government Stock bid prices for the fourth consecutive session in line with the continued recovery in Eurozone yields to around 2.90%. The latest upturn in yields follows yesterday’s agreement reached between the leaders of European countries to sooth the region’s sovereign debt crisis, particularly that of Greece. Yesterday’s EU summit agreed to extend a new bailout package to Greece of €109 billion, reduce the interest rate on this new lending to around 3.5% as well as extending the maturity of its loans from 7.5 years to a minimum of 15 years and possibly up to a maximum of 30 years. The private sector will also contribute to this debt restructuring through a number of roll-overs, some of which include a 20% haircut. European leaders also extended the more accommodative rates and maturities to Portugal and Ireland but clearly stated that the private sector will not be involved in these two countries as their situation is not like that of Greece.

The bid price quoted by the Central Bank of Malta in the 5.25% MGS 2030 (I) was lowered by a further 58 basis points to 100.74%. This sharply contrasts with the bid price of 12 July (just 10 days ago) which hit 103.54% after fresh concerns on Italy’s sovereign debt sent shockwaves through European financial markets which reflected in a severe downturn in Eurozone yields to 2.50%. Overall the Rizzo Farrugia MGS Index edged a further 0.3% lower today to 973.285 points, representing a 1.1% drop from the recent peak of 983.696 points reached on 12 July.

On the equity market, the MSE Share Index again closed in negative territory with a further 0.2% decline to a new 20-month low of 3,273.164 points. During this morning’s trading session, HSBC Bank Malta plc moved higher for the first time this week as the equity gained 0.7% to €2.89 level on volumes of 5,470 shares. Meanwhile Bank of Valletta plc failed to recover from yesterday’s 1.9% drop as its share price closed unchanged at the €2.65 level, representing a weekly drop of 0.4%. Similarly Lombard Bank Malta plc failed to recover from last Wednesday’s 6% plunge as another deal of 1,000 shares took place at the €2.67 level. Lombard ranks as the worst performer of the week.

GO plc also ranks amongst this week’s worst performing equities following today’s 4.4% plunge to the €1.30 level across three trades totalling 2,380 shares. Medserv plc closely follows with a weekly decline of 3.8% to a new 21-month low of €3.85 as its shares were active for the first time in almost three months.

Malta International Airport plc yesterday reported a 12.7% increase in passenger numbers during the first six months of 2011 and also announced an improved forecast for the whole year whereby the airport operator is expecting a 3.2% growth in passenger traffic to a new record of around 3.4 million. Nonetheless, the share price lost 2.5% today to €1.55 – the lowest level in the past nine months.

Following last Monday’s 1.9% increase, the share price of RS2 Software plc dropped back to the €0.53 during this morning’s session across three trades totalling 10,000 shares.