Prices of eurozone government bonds declined this morning as the European Central Bank started buying Italian and Spanish assets in a further attempt to tame the sovereign debt crisis spreading across the eurozone. This drop in prices was also reflected in Malta with the Rizzo Farrugia MGS Index shedding 0.4%. The price of the 5.25% MGS 2030 bond lost 92 basis points to 102.05% in sharp contrast to last week’s high of 103.19%.
Following the sharp declines across all major stockmarkets last week and the news on Friday evening that the rating agency Standard & Poor’s downgraded the rating of the US from AAA to AA+, the Group of Seven nations issued a statement today saying it will take “all necessary measures to support financial stability and growth”. European equity markets were volatile this morning and after trading in positive territory earlier on, they are now showing further significant losses with the UK FTSE 100 Index down 1.8% to 5,154 points.
On the local equity market only two equities were active as investors digest the international news headlines. The share price of Bank of Valletta plc edged minimally lower to €2.689 while Lombard Bank Malta plc maintained last week’s gains as a further 22,000 shares traded at the €2.69 level.
On Friday late afternoon, Middlesea Insurance plc published its financial statements for the first half of 2011 showing a profit for the period of €1.1 million compared to a level of €3.2 million in H1 2010. Middlesea’s new majority shareholder Mapfre Internacional S.A. will shortly proceed with a Mandatory Bid to the shareholders of Middlesea in terms of Chapter 11 of the Listing Rules. Investors await the details of the price established for the mandatory bid and the acceptance period during which Middlesea shareholders may accept the offer.