MGS prices decline following Moody’s downgrade

This morning the Central Bank of Malta stockbroker lowered its Malta Government Stock bid prices mainly to reflect the credit rating downgrade of Malta from A1 to A2 by Moody’s. In a press release, the rating agency the rating agency explained that the downgrade was the result of lower medium-term economic growth rates arising from the 2008/09 financial crisis and the inability to achieve projected improvements in the Government’s balance sheet established at the time of EMU accession. Moreover, Moody’s concluded that even if debt ratios stabilize in the coming years, they are likely to remain higher, and therefore riskier, than those commensurate with Malta’s previous rating of A1. The largest decline was of 99 basis points in the bid price of the 5.25% MGS 2030 (I) which dropped to 102.69%. Overall the Rizzo Farrugia MGS Index slid 0.5% lower to 992.696 points from yesterday’s 2011 high.

On the local equity market, Bank of Valletta plc continued to recover as its share price advanced by a further 0.8% to regain the €2.58 level on volumes of over 6,000 shares. This helped the MSE Share Index to register its fifth successive positive performance with a 0.2% rise to 3,121.172 points.

HSBC Bank Malta plc also closed in positive territory today although its share price edged minimally higher to close at the €2.73 level. Meanwhile Malta International Airport plc maintained yesterday’s gains as a further 2,500 shares traded at the €1.54 level. This week MIA announced that it almost maintained the same record level of passengers registered in August 2010.

A single trade of 144 Middlesea Insurance plc shares was transacted at the €0.911 despite the current offer by Mapfre Internacional S.A. to acquire the remaining shares of Middlesea at €0.965 per share. Shareholders have until Monday 26 September to submit their acceptance form if they wish to accept this offer.

Tomorrow is a public holiday and therefore no trading will take. The Malta Stock Exchange will re-open for trading on Friday 9 September.