BOV sells a portfolio of Non-Performing Loans

The MSE Equity Price Index advanced by 0.68% to 3,699 points as the gains in six equities outweighed the declines in APS, Hili Properties and Harvest. Meanwhile, GO plc traded flat at the €2.82 level across volumes totalling 10,000 shares. Download today’s Equity Market Summary.

Bank of Valletta plc climbed by 0.8% to the €1.26 level across five trades totalling 8,631 shares. Following the close of trading, 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.

Within the same sector, HSBC Bank Malta plc moved 0.8% higher to the €1.27 level on three deals totalling 15,000 shares.

Today’s most actively traded equity – PG plc – surged by 5.8% to an over one-year high of €2.18 as 50,000 shares changed hands. Yesterday, 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.

Tigné Mall plc advanced by 9.1% to the €0.895 level across two deals totalling 50,000 shares.

Likewise, Plaza Centres plc climbed 4.8% higher to the €0.65 level on two trades totalling 13,459 shares.

Today’s best performing equity (+75%) was Grand Harbour Marina plc as it moved to the €1.10 level compared to the previous closing price of €0.63, albeit the volume-weighted average price for the day was at €0.692 (+9.8%). A total of 126,233 shares changed hands.

In contrast, Harvest Technology plc fell by 11.1% to the €1.20 level after partially recovering from an intraday low of €0.61 (-55%) across two trades totalling 2,992 shares.

APS Bank plc dropped by 1.8% to an all-time low of €0.54 across four deals totalling 22,302 shares.

Hili Properties plc eased by 0.9% to the €0.214 level on muted activity.

Today, Santumas Shareholdings plc published its interim financial statements for the six-month period ended 31 October 2023. Investment income dropped to €0.19 million compared to the €0.38 million figure generated in the comparable period last year as the higher income from dividends, interest, and ground rents was offset by the lower income from concession rights. Meanwhile, Santumas Shareholdings registered a €0.23 million increase in fair value of its financial assets, which is higher than the increase of €0.10 million in the comparable six-month period last year. Overall, Santumas Shareholdings posted a net profit of €0.27 million compared to the net profit of €0.37 million recorded in the six months ended 31 October 2022. When compared to the corresponding figures as at 30 April 2023, total equity improved by 2.3% to €11.9 million, which translates into a net asset value per share of €1.624.

The RF MGS Index advanced by a further 0.06% to 900.942 points, largely driven by the increase in bid prices for longer-dated MGS as yields across the longer-end of the yield curve continued to move lower. Indeed, the German 20-year bund yield moved to a nine-month low of 2.26%. In the US, the housing market rebounded in November as the sector is benefitting from the lower mortgage rates. Elsewhere, the latest shipping disruptions brought by militant attacks on ships in the Red Sea added to fears of energy supplies. Oil prices increased as oil tankers were diverted to longer routes.

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.