Sell-off in corporate bond market

Most of the active corporate bonds closed sharply lower during this morning’s trading session as investors remained concerned about the political crisis in Libya. The largest declines were registered in the 7.5% Mediterranean Investments Holding plc 2014 which plunged to the 90% level from a previous price of 104%. Likewise the price of the 6.5% International Hotel Investments plc 2014 bond slipped 13 percentage points from 103% to the 90% level. Other bonds of Mediterranean Investments Holding, International Hotel Investments and Corinthia Finance also declined. Meanwhile the selling pressure in the corporate bond market also spread onto other bonds with the 7% FIMBank plc 2019 and the 7% Grand Harbour Marina plc 2019 bonds dropping 200 basis points and 300 basis points respectively. Meanwhile, the Rizzo Farrugia MGS Index advanced by a further 0.17% on further gains in eurozone bonds amid their ‘safe haven’ status.

On the equity market, the MSE Share Index declined for the fifth consecutive session. The Index edged 0.1% lower to 3,626.462 points on declines in Bank of Valletta plc and Middlesea Insurance plc. BOV’s share price dropped below the €3.00 level for the first time since 9 November 2010. The equity closed the day 0.2% lower at the €2.994 level on volumes of 9,716 shares.

Meanwhile, following the 13% drop in the preceding three sessions, HSBC Bank Malta plc held on the €3.001 level after also recouping from an intra-day low of €2.99. Activity increased to 33,600 shares as fresh demand entered the market following this week’s sharp drop. The final gross dividend of €0.077 per share will be payable to those shareholders as at close of trading on Thursday 3 March.

The other negative performing equity was Middlesea Insurance plc which edged 0.9% lower to the €1.05 level across two trades totalling 4,700 shares. Middlesea is scheduled to publish its 2010 financial results on 14 March.

GO plc touched a fresh 15-month low of €1.785 but recovered towards the end of the session to close unchanged at the €1.80 level.

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