MSE Share Index back below 3,000 points

The MSE Share Index today failed to remain above the 3,000-point level as the equity benchmark slipped 0.6% lower to 2,987.249 points mainly due to the 2.6% drop in the share price of International Hotel Investments plc to the €0.76 level. Only three trades were transacted in this equity totalling 6,385 shares. IHI has yet to announce the date when their 2011 financial statements will be published.

In contrast to yesterday’s immediate strong positive reaction to the news of a possible takeover of FIMBank plc by Burgan Bank, FIMBank’s equity lost some of its momentum during today’s trading session on the Malta Stock Exchange. The share price of FIMBank reversed some of yesterday’s 20% increase as it slid 5.6% lower to the USD0.85 level on volumes of 100,000 shares. Earlier this week, FIMBank informed the market of a possible transfer of shares amounting to 38.8% of the total issued share capital from the largest shareholder Massaleh Investments K.S.C.C. to Burgan Bank. Furthermore, Burgan Bank subsequently intends to inject new equity which will increase its potential holding to over 50% thereby initiating a Mandatory bid for the remaining shares. The above transactions are subject to the necessary approvals.

On the other hand, Bank of Valletta plc inched minimally higher to close at the €2.16 level on volumes of just over 14,300 shares.

All other active equities, namely HSBC Bank Malta plc, GO plc and Lombard Bank Malta plc all ended today’s session unchanged. Lombard Bank this afternoon published its preliminary 2011 results, revealing a 20.9% drop in profitability to €6.6 million. The drop in profits was mainly due to the significant increase in net impairments to €2.2 million reflecting the Bank’s prudent approach to lending especially in the prevailing challenging economic conditions. The Directors proposed an unchanged final gross dividend of €0.115 per share to all shareholders as at close of trading on 20 March.

On the bond market, the negative trend of the Rizzo Farrugia MGS Index enters its tenth consecutive session with another 0.14% drop to a new 14-week low of 983.15 points. The downturn in the local MGS benchmark in recent days reflects the sharp recovery in Eurozone yields which touched the 2% level this morning. International market sentiment improved on the back of a better outlook for the world economy as well as a respite in Greece’s sovereign debt crisis after the country managed to successfully complete a debt swap with private investors and subsequently obtain its second bailout amounting to €130 billion.