Minimal declines in BOV and GO

The local equity market kicked off the second half of 2012 in negative territory with the MSE Share Index retreating by 0.1% to 3,018.411 points on minimal declines in the share prices of Bank of Valletta plc and GO plc.

Almost 16,000 BOV shares changed hands today as the share price failed to hold on to an intra-day high of €2.075 to close this morning’s session 0.5% lower at the €2.05 level.

Similarly, GO eased 0.4% lower to €1.17 on a single deal of 550 shares.

Meanwhile, all the other active equities closed unchanged. HSBC Bank Malta plc held on to the €2.51 level on a deal of 3,400 with a further 1,020 Simonds Farsons Cisk plc shares changing hands at the equity’s 42-month high of €2.15. The only other active equity was International Hotel Investments plc with 5,500 shares changing hands at the €0.85 level representing no change from the previous close.

On the bond market, the Rizzo Farrugia MGS Index eased 0.1% lower to a 12-week low of 983.879 points in line with the upturn in eurozone yields to the 1.60% level. The turnaround in yields follows the decisions taken by EU leaders at last week’s summit. The region’s leaders agreed to allow the European Stability Mechanism (ESM) to directly bailout banks from next year and intervene directly in bond markets to support troubled member states. Moreover, EU leaders agreed to forego the rescue fund’s seniority status in the hope that banks will be more willing to lend to sovereign states.

However, by the afternoon the turnaround was losing steam after Finland and the Netherlands indicated their opposition to these decisions with Finland threatening to block the region’s bailout fund from buying sovereign bonds from the open market. Moreover, various analysts were requesting further information on the decisions taken late last week. Markets are also shifting their focus on the upcoming monetary policy meetings of the European Central Bank and the Bank of England (scheduled to be held on Thursday 5 July) during which both institutions are expected to announce further measures to support economic growth.