Following last week’s 0.5% drop, the MSE Share Index started this week with a further 0.5% decline to a new 2012 low of 3,091.136 points as the share prices of two large banks traded lower.
Bank of Valletta plc slumped 1.3% to the €2.26 level across twenty trades amounting to over 15,200 shares. Similarly, HSBC Bank Malta plc’s share price retreated by 0.7% to the €2.551 level on lower volumes of 3,684 shares.
Meanwhile, GO plc edged minimally higher to close at the €0.90 level across 7,600 shares. Last Friday, the shareholders of Forthnet S.A. (in which GO has an indirect investment) rejected all the resolutions presented to them during the Extraordinary General Meeting including a €30 million rights issue in line with the conditions of the restructured debt. Prior to the meeting, GO also announced that it was opposing these resolutions.
On the bond market, the Rizzo Farrugia MGS Index was again marginally unchanged today at 988.105 points despite last Friday evening’s decision by the Standard & Poor’s to downgrade the credit ratings of nine Eurozone countries as the rating agency felt that the actions taken to counter the prevailing sovereign debt crisis are insufficient.
France and Austria lost their triple AAA rating and moved one notch lower to AA+. The ratings of Malta, Slovenia and Slovakia were also lowered by one notch to A-, A+ and A respectively. Harsher actions were taken against Italy, Spain, Portugal and Cyprus as their respective ratings were lowered by two rankings. Moreover, the sovereign paper of Portugal and Cyprus is no longer considered as investment grade after being assigned “junk status” ratings of BB and BB+ respectively. The eurozone’s largest economy, Germany, maintained its AAA rating.
The European Union highly criticised the rating agency’s actions with Economic Affairs Commissioner Olli Rehn stating that the measures taken by the respective governments to date are decisive and in his view the currency bloc was moving towards calming financial markets.