Daily Market Highlights (03.12.2019)

MIDI share price plummets over 14%


The MSE Equity Price Index lost 0.51% to close the day at just above the 4,702 mark as the drops in four companies outweighed the gains in IHI and FIMBank. Meanwhile, another five shares finished unchanged whilst trading activity remained subdued as only €0.14 million worth of shares changed hands. Download today’s Equity Market Summary.

MIDI plc shed 14.1% to the €0.55 level after partially rebounding from an intra-day low of €0.515 (-19.5%). A total of 141,700 shares traded. Yesterday, MIDI announced that discussions with Tumas Group in connection with the possibility of establishing a joint venture with respect to the development of Manoel Island ceased by mutual agreement. Nonetheless, MIDI noted that it remains fully committed to the Manoel Island project and that development works will commence once the required planning permits are issued.

Medserv plc moved back to the €1.10 level (-0.9%) across 13,500 shares. Last Saturday, Medserv issued an Interim Directors’ Statement showing that it is on course to achieve this year’s target of generating an EBITDA of €14.1 million. Moreover, the company explained that its two major shareholders entered into a conditional agreement with the Swiss company AMT S.A. (“AMT”) whereby the majority shareholders bound themselves to transfer their shares in Medserv to AMT whilst AMT bound itself to issue a voluntary bid in cash for the acquisition of the entire issued share capital of Medserv. Subject to a number of conditions including Medserv shareholders’ approval, the process will first entail Medserv becoming the parent company of AMT via a share for share exchange. Thereafter, AMT will launch a voluntary bid to all shareholders of Medserv whereby minority shareholders will be offered a cash consideration of €1.102 per share. Subject to the transaction being successfully concluded, the new entity (i.e. the combined Medserv and AMT) will have an operational presence in 26 countries across 4 continents.

RS2 Software plc also performed negatively today with a drop of 2.8% to the €2.10 on activity totalling 5,000 shares.

Low volumes were also transacted in the equity of Bank of Valletta plc which retracted by 1.4% to the €1.06 level on just 4,060 shares.

Within the same sector, HSBC Bank Malta plc stayed at the €1.25 level on trivial activity.

Among the large companies, GO plc (625 shares) and Malta International Airport plc (2,060 shares) also traded flat at €4.18 and €7.10 respectively. MIA is soon expected to publish its November traffic results.

A single deal of 2,700 shares left the equity of PG plc at the €1.75 level. The company is due to publish its interim financial results on 18 December.

Tigné Mall plc held on to the €0.90 level across 2,210 shares.

Meanwhile, International Hotel Investments plc rose 1.3% to regain €0.81 level whilst FIMBank plc surged 2.4% to the USD0.64 level. Both equites traded on shallow volume.

The RF MGS Index trended lower for the third consecutive day as it slipped by a further 0.14% to yet another near five-month low of 1,143.294 points. Prices of all Malta Government Stocks remained under downward pressure following the most recent indications that manufacturing activity in Europe and China may now be rebounding. On the other hand, tensions regarding the international trade policy of the US escalated further after the US administration announced that it is considering imposing tariffs of up to 100% on USD2.4 billion worth of imports from France. This took place after the EU’s second largest economy introduced a tax that affects large US technology companies like Google LLC and Apple Inc. The US also said that it is also exploring the possibility of opening investigations into similar digital levies in Austria, Italy and Turkey. Meanwhile, in her first appearance before the European Parliament, the new President of the ECB, Ms Christine Lagarde reiterated that the central bank remains “resolute” in restoring price stability in the euro area and hinted that the upcoming review of the ECB’s monetary policy strategy will be wide-ranging.

Across the local corporate bond market, the sharpest movements took place in the 4.25% Mercury Projects Finance plc 2031 and the 3.75% Tumas Investments plc 2027. The former rallied by 242 basis points to 102.92% on €11,100 nominal whilst the Tumas bond shed 200 basis points to 98% also on light volumes. Yesterday, the Board of Directors of Tumas Investments plc issued a statement to update bondholders on the affairs of the company and of the guarantor of its bonds – namely Spinola Development Company Ltd (“SDC”). The statement relates to recent developments concerning one of its former directors and maintains that the resignation of Mr Yorgen Fenech is not expected to impact management continuity at SDC. Contrary to what has been reported on the local media, the Tumas Group is led by Mr Raymond Fenech who has been at the helm since 2014. Although the Tumas Group disassociates itself with allegations of irregularities, it has nonetheless decided that, in the light of the events that have unfolded over the past days, it will now seek additional comfort through an independent external report. The financial performance of SDC remains satisfactory and fully in line with the forecasts as published in the Financial Analysis Summary dated 28 June 2019. These had indicated that SDC will generate an EBITDA of just over €32 million and a net profit of nearly €18 million. The statement also concluded by stating that SDC continues to enjoy the support of the various local and international stakeholders and partners involved in its operations.


Comments are closed.