Daily Market Highlights (02.11.2023)

Higher interest income uplifts BOV’s profitability


The MSE Equity Price Index increased by 0.17% to 3,504.579 points as the gains in BOV and MaltaPost outweighed the decline in APS. Meanwhile, three other equities closed unchanged as total trading activity in local equities remained muted at €0.07 million. Download today’s Equity Market Summary.

Bank of Valletta plc moved 0.8% higher to the €1.24 level across nine trades totalling 37,986 shares. BOV Failed to hold onto an intra-day high of €1.25 (+1.6%). Today, Bank of Valletta plc issued an Interim Directors’ Statement providing information about its performance during the nine-month period ended 30 September 2023 when compared to the same period in 2022.Net interest income surged by 85% (or €116.5 million) to €253.8 million as the growth in the lending book and investment portfolio, coupled with the upward repricing of interest rates offset the higher interest expense incurred following the 10% Callable Senior Non-Preferred Notes issued at the end of 2022. Meanwhile, non-interest income fell by 4.3% to €62.1 million reflecting lower levels of net fee and commission income and net trading income. In this respect, BOV highlighted a slowdown in investment-related commissions. On the expenditure side, operating costs increased by 4.9% to €145.7 million as the further investments in human resources and digitisation offset the lower levels of regulatory costs and professional fees. Overall, BOV recorded a pre-tax profit of €163.5 million compared to a pre-tax loss of €48.7 million in the same period last year, which however had included a net litigation charge of €103.5 million related to the settlement of the Deiulemar claim in May 2022. Excluding the impact of the settlement, BOV’s comparable pre-tax profit of last year would amount to €54.8 million BOV’s net profit for the first nine months of 2023 amounted to €108.8 million, which translates into an annualised return on average equity of 12.4%. Total equity increased by 9.8% (or €109 million) to €1.22 billion, which translates into a net asset value per share of €2.091.

MaltaPost plc surged by 8.9% to a ten-month high of €0.49 as 9,000 shares changed hands.

APS Bank plc moved 0.9% lower to €0.575 on muted activity. Last week, APS published its financial results for the nine-month period ended 30 September in which the Group reported a record net profit for the period of €15 million. On Monday, the offer of up to €50 million 5.80% APS Bank plc unsecured subordinated bonds 2028-33 was closed ahead of schedule following oversubscription.

Meanwhile, FIMBank plc held the USD0.2 on a single deal of 22,217 shares.

Hili Properties plc held the €0.19 level across six trades totalling 89,400 shares. Hili failed to hold onto an intra-day high of €0.20 (+5.3%).

International Hotel Investments plc traded flat at €0.48 level on two deals of 2,000 shares. Today, IHI announced the basis of acceptance and allocation policy in relation to the offer of €60 million 6.00% unsecured bonds redeemable in 2033. In total, IHI received 6,189 applications for a total value of €72.1 million. As a result of the over-subscription, the offer was closed ahead of schedule. Holders of the €10 million 5.8% International Hotel Investments plc 2023 and €35 million 6% International Hotel Investments plc 2024 bonds who exercised their preference to exchange their maturing bonds into the new bonds amounted to €5.94 million (59.4%) and €24.6 million (70.2%) respectively. As a result, there was a total exchange of €30.5 million (67.8%), all of which was allotted in full. The remaining balance was allocated between preferred applicants which included existing bondholders applying in excess of their holding in Exchangeable Bonds, Corinthia Group personnel and holders of other IHI, MIH or CPHCL securities. Preferred applicants were allocated the first €5,000 in full and 44.2% of the remaining amounts rounded to the nearest €100. The total amount of preferred applications was €41.6 million of which 70.9% (€29.5 million) was allotted.

The RF MGS Index moved 0.62% higher to 858.508 points reflecting a decrease in yields across the eurozone sovereign bond market. The German 10-year bund yield fell to lows last seen in mid-September. Yesterday, the US Federal Reserve kept the federal funds rate unchanged for the second consecutive meeting. Indeed, the range remains at a 22-year high between 5.25%-5.50%. The President of the Federal Reserve Jerome Powell acknowledged the risks of a potential inflation upside due to higher gas prices and stronger economic activity. However, he recognises the fact that financial conditions have tightened, and long-term yields have increased which allows the Federal Reserve to slow down and better assess if further hikes are appropriate. Meanwhile, in the United Kingdom, the Bank of England also decided to hold the interest rates steady for the second consecutive session. Interest rates remained at a 15-year high of 5.25% with six members of the Monetary Policy Committee voting in favour of keeping rates unchanged whilst another three advocated for a 25 basis-point increase.


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.