Daily Market Highlights (01.08.2016)

  • The MSE Share Index retreated by 0.25% today to 4,459.255 points reflecting the declines in the share prices of both BOV and HSBC while three other shares closed unchanged (GO, MIA and RS2). Meanwhile, FIMBank plc was the only gainer today with a rise of 0.3% to the USD1.018 level across 90,000 shares. Download a copy of today’s Equity Market Summary.
  • On the bond market, the RF MGS Index halted a three-day negative streak as it rebounded by 0.17% to 1,156.876 points. Euro zone sovereign yields drifted lower today, possibly reflecting renewed concerns on global economic growth, a probable delay in the timing of the next rate hike by the US Federal Reserve and further downward pressures on the price of oil. Indeed, the 10-year benchmark German Bund slipped from -0.076% last Friday to -0.105% today. Similarly, the 10-year yields of Italy and Spain also lost ground (prices went up). In a remarkable turnaround, the 10-year yield of the Italian government paper touched a seventeen-month low of 1.156% today after the country’s third largest (and world’s oldest) bank – Monte dei Paschi di Siena – unveiled a privately-backed rescue plan to prevent it from being wound up by regulators. Last Friday’s stress tests results on European banks revealed a broadly healthier industry and that Europe’s banks are now in a better position than two years ago. Nonetheless, problems remain especially in Italy and Ireland.
  • Bank of Valletta plc slid back to the €2.20 level (-0.9%) across 26,030 shares.
  • Within the same segment, HSBC Bank Malta plc continued to trade within a tight range as it dropped by 0.6% to the €1.59 level on volumes totalling 14,910 shares. The Bank will reveal its interim results on Wednesday 3 August. The Board of Directors will also consider the declaration of an interim dividend.
  • RS2 Software plc and Malta International Airport plc are also expected to reveal their respective interim results in the coming weeks. RS2 will do so on 11 August whilst MIA’s interim financial statements will be issued on 17 August. Both equities closed flat today as they held on to the €2.00 and €4.20 levels respectively on weak volumes. Recently, MIA upgraded its 2016 year-end traffic results to +7.5% from the original forecast of a 2.4% growth in passenger volumes.
  • Similarly, GO plc remained stuck at its sixteen-month low of €2.80 across insignificant volumes totalling just 725 shares. Last Thursday, GO announced that it was informed by TT ML Limited (a wholly-owned subsidiary of Tunisie Télécom) that it received acceptances totalling 66,281,050 shares – representing approximately 65.4% of the entire issued share capital of GO. Moreover, on Friday GO announced that, within the framework of its sales process to TT ML Limited, Forgendo Limited (the joint venture company between GO and Emirates International Telecommunications (Malta) Limited [EITML]) transferred its entire shareholding in the Greek telecommunications operator Forthnet S.A. to GO and EITML for a nil consideration. This share transfer was part of the conditions for the successful completion of TT ML’s majority take-over of GO.
  • The other notable development today was the announcement issued by Medserv plc which stated that its wholly-owned subsidiary Medserv Operations Limited has successfully concluded the renewal of one of its major contracts with an international oil company operating offshore North Africa for a further two years. Medserv Operations will provide fully integrated logistics shore base services from its base in Malta. The project relates to the continuation of the Bahr Essalm offshore gas field development in the central Mediterranean. Moreover, Medserv also stated that its 80%-owned Cypriot subsidiary Medserv (Cyprus) Limited has been granted an extension of its license to carry out port operations from Larnaca, Cyprus, for one year expiring on 31 August 2017. Medserv Cyprus continues to service ENI Cyprus from its base in Larnaca and is currently awaiting adjudication on a very competitive bid for the provision of shore base services to another international oil company.
  • Subscriptions from the retail public for the recently announced new Malta Government Stocks – i.e. the 1.5% MGS 2022 (IV) FI (which gives a yield to maturity of 0.266% per annum) and the 2.4% MGS 2041 (I) (which gives a yield to maturity of 2.307% per annum) – close next Wednesday 3 August (or earlier in the case of over-subscription). Tenders in the form of sealed bids for applications in excess of €100,000 (nominal) will be accepted until noon on Monday 8 August.