The local equity market followed the sharp sell-off across global stockmarkets with the MSE Share Index registering its worst daily performance since March 1999. Sharp declines in most of the largest capitalised companies today led by a 9% decline in Bank of Valletta plc forced the local Index to close 4.63% lower at a 21-month low of 3,117.717 points. The share price of the two large banks also closed at their respective 21-month lows. The MSE Share Index is now also approaching bear market territory as it has declined by 18.8% since its 2011 high on 27 January.
The Dow Jones Industrial Average in the US yesterday declined by 634.76 points (5.5%) in reaction to the news on Friday evening that the credit rating agency Standard & Poor’s lowered the ‘AAA’ rating of the US by one notch to ‘AA+’. The global stockmarket crash continued this morning with sharp losses again across most major European markets in a day characterised by high levels of volatility.
High trading activity took place in BOV shares today. The equity suffered a 9% loss to €2.45 amid high volumes of over 135,000 shares across 67 trades. Likewise, HSBC Bank Malta plc shed 6% to close at €2.72. Meanwhile, the equity of Lombard Bank Malta plc continued to buck the trend as it edged a further 0.4% higher to €2.70 on volumes of over 20,000 shares.
The equities of International Hotel Investments plc, Malta International Airport plc and GO plc also all suffered declines this morning with MIA and GO closing at fresh 2011 lows.
On the other hand, bond markets gained as investors continued to favour safe haven assets. The renewed decline in eurozone benchmark yields led to a further upturn in the bid prices of Malta Government Stocks quoted by the Central Bank of Malta. The Rizzo Farrugia MGS Index advanced by 0.7% to a 7-month high. However, similar to the trend last week, while the indicative bid price of the Central Bank in the 5.25% MGS 2030 rallied from 102.05% to 103.30%, the price closed at 102.80% on the secondary market in view of the various offers placed on the market at 103%.