BOV climbs to an over 5-year high of €1.50

The MSE Equity Price Index surged by 3.53% to 3,827.025 points, largely driven by the sharp uplift in the share price of BOV. Five other equities also closed the session in positive territory, while MaltaPost and Farsons drifted lower and MIA, HSBC and PG remained unchanged. Download today’s Equity Market Summary.

Bank of Valletta plc climbed by 18.1% to the €1.50 level, the highest closing price since July 2018. A total of 225,255 shares changed hands having a market value of just over €0.3 million, with the volume-weighted average price for the day at €1.343 (+5.7%). Last Tuesday, BOV announced that the Bank entered into an assignment agreement pursuant to which it has assigned its rights, title, interest, and benefits of a portfolio of long-standing Non-Performing Loans (NPLs) for a consideration of €26 million. The bank explained that the consideration reflects, amongst other things, the reduced creditworthiness of the underlying borrowers, the recovery risk inherent in the Portfolio and the cost to acquire and manage the Portfolio over the recovery period. The Portfolio is composed of 707 non-performing loans across 245 borrowers, mostly relating to commercial loans but also includes personal loans, credit card loans, home loans, encroached savings and current accounts and other debts. BOV noted that 90% of the loans have been in default for five years or more. The transaction is expected to have a positive impact of approximately €18 million on the Bank’s profitability for financial year 2023.

Also among the large companies by market capitalisation, International Hotel Investments plc rebounded by 6.4% to the €0.468 level across four deals totalling 48,820 shares.

Malta Properties Company plc extended yesterday’s gains as it climbed by a further 2.6% to the €0.392 level across three deals totalling 15,605 shares.

Within the same sector, Plaza Centres plc advanced by 4.6% to the €0.68 level on a single trade of 5,424 shares.

The ordinary shares of RS2 Software plc closed the session 0.9% higher at the €1.10 level after recovering from an intraday low of €1.07 (-1.8%) across four deals totalling 10,000 shares.

Lombard Bank Malta plc increased by 0.6% to the €0.85 level across volumes totalling 10,000 shares.

In contrast, Lombard’s postal services subsidiary – MaltaPost plc – fell by 4.1% to the €0.47 level on one deal of 4,500 shares. On Tuesday, MaltaPost published its Annual Report and Financial Statements for the financial year ended 30 September 2023. Revenues rebounded by 25.7% to €39.6 million largely reflecting the higher levels of international cross-border postal sales, which amounted to €20.6 million compared to €13.3 million in the previous year. MaltaPost registered an operating profit of €2.63 million compared to the €0.99 million figure in the previous financial year. Net profits attributable to MaltaPost’s shareholders amounted to €1.85 million compared to €0.27 million in the previous financial year. The Directors recommended an unchanged (share spit-adjusted) final net dividend of €0.02 per share to all shareholders as at close of trading on Monday 8 January 2024. The dividend will be paid on 8 March 2024 subject to shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on 9 February 2024. The Directors are giving shareholders the option to receive the dividend either in cash or by the issue of new shares at the attribution price of €0.44 per share.

Simonds Farsons Cisk plc dropped by 1.5% to the €6.75 level on two deals totalling 4,750 shares.

PG plc traded flat at the €2.10 level across two deals totalling 6,800 shares. On Monday, PG published its interim financial results for the six-month period ended 31 October 2023. Revenue increased by 19.1% to a new record (at interim stage) of €96.2 million (FY2022/23 €80.8 million). Operating costs increased by 19.4% to €85.4 million reflecting the overall growth in business as well as the impact of the Group’s decision to absorb an element of the cost price increases to maintain its competitiveness. Nonetheless, the operating profit in absolute terms increased by 16.9% to €10.9 million compared to €9.30 million in the same period last year, which translates into a marginally lower EBIT margin of 11.3% compared to 11.5% in H1 2022/23. Overall, PG reported a pre-tax profit of €10.1 million. After accounting for a tax charge of €2.89 million, PG’s net profit amounted to €7.21 million, which is 18.2% higher than the €6.10 million figure reported for H1 2022/23. The net profit reported during the period under review translates into an annualised return on equity of 23.4% compared to 22.1% in H1 2022/23.

Malta International Airport plc (2,000 shares) and HSBC Bank Malta plc (3,200 shares) held the €5.75 and €1.28 levels respectively.

The RF MGS Index moved higher for the fourth consecutive session as it advanced by a further 0.17% to 906.963 points. Data published today showed that during the third quarter, the US economy grew by an annualised rate of 4.9%, which is below earlier estimates of 5.2%. Nonetheless, this marks the strongest economic growth rate since the last quarter of 2021. Economic activity in the world’s largest economy was boosted by consumer spending but it also suffered from lower spending on services.

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.