MSE Share Index at new 17-month low

This morning the MSE Share Index dropped another 0.7% to close at a new 17-month low of 3,301.571 points on further selling pressure across the market forcing the share prices of the two large banks to decline further. Following this fourth consecutive session of declines, the Share Index ended the week 1.3% lower as most of the large cap equities closed the week in negative territory. The local equity benchmark is now 12.7% below its value at the beginning of the year.

During this morning’s trading session, Bank of Valletta plc shed a further 1.4% to close at a fresh 6-month low of €2.80 despite still trading with the entitlement to the net interim dividend of €0.0625 per share. BOV ended the week 2.8% lower. HSBC Bank Malta plc also traded lower today with share price easing another 1.3% back to the €2.95 level representing a 1.7% drop over the week.

FIMBank plc also slid 2.9% to a fresh 71-month low of US$0.84 across three trades totalling 16,000 shares. Yesterday evening, the trade finance specialist held its Annual General Meeting during which shareholders approved all the items on the agenda including the delisting of FIMBank plc shares on condition that the ‘share-for-share exchange’ with FIM Holdings plc is accepted by at least 80% of shareholders. In this respect, shareholders have until 22 June to submit their acceptance form. Further information on the ‘share-for-share-exchange’ is available at https://rizzofarrugia.com/news-events/exchange-offer-details/.

GO plc maintained the €1.29 level today with volumes declining to 2,000 shares. Nonetheless, the equity closed the week in negative territory for the fifteenth consecutive week with a loss of a further 4.4% to rank as the worst performer during the last five sessions. The equity of GO fell out of favour with investors particularly after announcing a 50% cut in dividend to €0.05 per share with its share price falling by 33.3% since the beginning of this year. This morning GO issued its Interim Statement informing the market that during the first quarter of 2011, the Group maintained positive trends in its turnover levels which continued to grow when compared to the first three months of 2010. The Group announced that the operating profit for the first quarter of 2011 is marginally ahead of that registered during the same period in 2010 whilst maintaining a healthy cash position.

The star performer of the week is undoubtedly Middlesea Insurance plc which climbed 15.3% to €0.98 ahead of the launch of the mandatory bid by Mapfre Internacional. Last Friday Middlesea announced that Mapfre agreed to acquire Munich Re’s shareholding of 19.9%. If the regulator approves this acquisition, Mapfre’s shareholding will surpass the 50% level and thus trigger a mandatory bid for the remaining shares in Middlesea. Details of the mandatory bid have still to be announced.

On the bond market, the focus turns to the new Malta Government Stock offerings taking place next week. Yesterday evening the Treasury fixed the prices of the two new fungible issues which were both set at 100.75%. The Rizzo Farrugia MGS Index edged higher today as eurozone yields dropped following comments made by the ECB President yesterday indicating that a rate hike is unlikely to take place in June.