Weak retail participation in new MGS issues

This afternoon, the Treasury published the statistics in connection with the last MGS issue. The statistics indicate that a total of just under €400 million was issued across the two new stocks on offer. Retail investors subscribed for a total €108 million (nominal) across the stocks on offer compared to retail demand of €180 million in February 2023 and also July 2023. The balance was subscribed for through the auction at higher yields compared to those offered to retail investors. In fact, the weighted average yield for the 3.15% MGS 2027 (VII) was 3.35% compared to 3.15% in the retail offer and for the 3.35% MGS 2029 (V), the weighted average yield amounted to 3.73% compared to 3.35% in the retail offer. Download today’s Equity Market Summary.

Meanwhile, The MSE Equity Price Index rose by 0.23% to 3,780.098 points as the gains in BOV, MIA, BMIT and Farsons outweighed the declines across six other equities. Meanwhile APS Bank plc closed unchanged. Today’s trading activity in local equities amounted to €0.15 million.

HSBC Bank Malta plc shed 0.7% as it eased back to the €1.37 level across five deals totalling 11,153 shares. Last Wednesday, HSBC Malta published its financial results for 2023. Net interest income increased by 81% to €195.8 million, driven by the higher returns on the ECB’s overnight deposit facility which boosted income from excess liquidity. Excluding insurance operations, non-interest income dropped by 11.4% to €27.1 million, while HSBC Life Assurance (Malta) Limited reported a profit before tax of €6.2 million. The financial performance was also boosted by the release of ECL’s amounting to €4.6 million, which however was lower than the release of €9.6 million in the previous year. Overall, HSBC Malta reported a profit before tax of €133.9 million, which is more than double the pre-tax profit of €55.6 million generated in 2022. The net profit figure for the year amounted to a record of €86.8 million (equivalent to €0.241 per share) which translates into a return on average equity of 17.1%. The Board of Directors is recommending a final net dividend of €0.0585 per share. The dividend will be paid on 25 April 2024 to all shareholders as at the close of trading on 14 March 2024 subject to approval by the Annual General Meeting scheduled for 18 April 2024. Coupled with the net interim dividend of €0.039 per share paid in September 2023, the total net dividend attributable for the 2023 financial year amounts to €0.0975 per share, which represents a payout ratio of 40% (2022: 35%).

International Hotel Investments plc was today’s most actively traded equity as it moved 1.3% lower to a two-week low of €0.456 over a total of 112,879 shares.

Also among large companies by market value, GO plc fell by 1.9% to the €3.10 level as 5,051 shares changed hands.

Malita Investments plc eased 0.4% lower to an all-time closing low of €0.492 across two trades totalling 20,000 shares after only partially recovering from an intra-day low of €0.490 (-0.8%). Last week, Malita published a Prospectus in connection with a 4-for-9 rights issue. An amount of up to 65,825,806 new ordinary shares are offered at €0.50 per share. The net proceeds from the Rights Issue, estimated at €32.5 million, are principally earmarked to part-finance the required capital expenditure for the ongoing Affordable Housing Project. The offer period opens on Wednesday 28 February 2024 until Friday 15 March 2024.

Santumas Shareholdings plc plummeted 7.1% to the €1.30 level albeit over trivial volumes.

The share price of Plaza Centres plc dropped by 1.7% to a four-month low of €0.59 on a single deal of 6,999 shares.

On the other hand, Malta International Airport plc climbed by 1.8% to the €5.70 level across four deals totalling 1,426 shares. MIA is set to publish its annual financial results for the financial year 2023 next Wednesday 28 February.

Similarly, Bank of Valletta plc moved 0.8% higher to regain the €1.32 level across ten trades amounting to 18,050 shares.

BMIT Technologies plc closed 2.6% higher at the €0.39 level after recovering from an intra-day low €0.368 (-3.2%) over six deals totalling 14,400 shares.

Simonds Farsons Cisk plc surged by 3.7% to the €7.00 level across four deals totalling 2,063 shares.

Meanwhile APS Bank plc closed unchanged at the €0.55 level on two trades amounting to 4,655 shares.

The RF MGS Index reversed some of yesterday’s decline as it rebounded by 0.31% to reach 887.218 points. During a news conference today the ECB president commented that the Governing Council needs to be more convinced that the current disinflationary process will be enough to sustainably reach the 2% target despite a slowdown in wage growth during the final quarter of last year. Mrs Lagarde’s sentiment was echoed by Bundesbank President Joachim Nagel who pushed back on deposit rate cuts until more wage data is released in the second quarter. Meanwhile, German ECB Board Member Isabel Schnabel commented that businesses are starting to absorb wage pressures from profits, and that not all wage growth is necessarily directly translating into higher prices.

This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap—370 of the Laws of Malta and a member of the Malta Stock Exchange.