MGS prices sharply lower as yields recover

The Rizzo Farrugia MGS Index slipped 0.4% lower today to 991.942 points after the Central Bank of Malta stockbroker sharply lowered its Malta Government Stock bid prices in line with the significant recovery in eurozone yields from 1.73% to the 1.90% level. The rise in eurozone yields, which continued this afternoon as they touched 1.96%, reflects the renewed optimism amongst investors as markets confidently expect EU leaders to find a suitable solution for the region’s sovereign debt crisis including the issuance of Eurobonds and strengthening the capital of banks.

On the equity market, the MSE Share Index edged 0.1% higher to 3,083.906 points mainly due to the marginal increase in the share prices of HSBC Bank Malta plc and International Hotel Investments plc. HSBC’s equity edged 0.4% higher to €2.64 across eight trades totalling 9,660 shares with IHI’s share price up 1.4% to regain the €0.75 level on a single trade of 5,000 shares.

Meanwhile, Bank of Valletta plc slid 0.8% lower to the €2.53 level after failing to hold on to an intra-day high of €2.56. A total of 13 trades were transacted during this morning’s session totalling 23,175 shares. RS2 Software plc also closed in negative territory as a single trade of 5,000 shares was executed at the €0.58 level, representing a 3.3% drop from its previous 2011 high of €0.60.

GO plc closed unchanged at the €1.10 after a last minute trade lifted the equity from its all-time low of €1.05. Just over 6,000 shares changed hands today. Forthnet, in which GO has an indirect investment, is currently trading at its all-time low of €0.18 on the Athens Stock Exchange after announcing a number of proposed changes to its capital structure including a €30 million rights issue.