Sharp sell-off across banking equities

The MSE Share Index registered its seventh consecutive decline with a further 1.3% drop to a new 21-month low of 3,207.798 points on a sell-off across all 3 banking equities which all closed at fresh 2011 lows.

The highest volumes were transacted in Bank of Valletta plc shares with the equity shedding a further 2% on activity of over 51,000 shares. This downturn was in direct response to the publication of the Interim Statement yesterday afternoon. BOV reported that since the start of the 3rd quarter of their financial year on 1 April 2011, the Group registered increased net interest income, lower fee and commission income, as well as further ‘unrealised fair value mark downs’ arising from the difficult conditions in the eurozone sovereign debt markets. BOV also made reference to further impairments on the loan book due to the prevailing economic environment. BOV announced that “the cumulative operating profits for the year to date are a little behind those for the equivalent period of FY 2010, but the overall results have been adversely impacted by the one-off charge estimated at €14.5 million (before third party recoveries) in respect of the offer relating to the La Valette Multi Manager Property Fund”.

The downturn in BOV also spilled over onto HSBC Bank Malta plc and Lombard Bank Malta plc. HSBC’s share price slipped by 2.4% to a fresh 9-month low of €2.80 on low volumes of under 6,000 shares. HSBC is due to publish its half-year results next Friday. Meanwhile, the worst performer was Lombard Bank Malta plc whose equity plunged 4.1% to a new 8-month low of €2.56 on volumes of 11,500 shares. Lombard is scheduled to report its interim results on 23 August.

GO plc failed to find support despite trading at an all-time low. This morning the equity retreated by a further 0.8% to €1.24 despite Forthnet’s announcement yesterday that it successfully concluded its debt restructuring.

Meanwhile, the full-year results publication of Crimsonwing plc failed to generate any trades in the equity with no bids in the market and lowest offers placed at the €0.355 level compared to the last closing price of €0.345. The IT Company reported a 16.5% increase in revenue to €14.3 million, a 30% growth in EBITDA to €0.75 million and a pre-tax profit of €0.22 million for the financial year ended 31 March 2011. In a separate announcement, Crimsonwing reported that during the first quarter of their 2011/12 financial year, revenues grew by 23% to €3.8 million.

Similarly, Plaza Centres plc issued its half-year results this morning showing a 6.8% increase in revenue to €1.1 million; a 1.1% rise in EBITDA to €0.87 million and a 5% decline in pre-tax profits to €625,275 due to higher costs. Plaza’s equity yesterday held on to its 2011 high of €1.80 with a further 16,595 shares on offer at this level.