Daily Market Highlights (04.06.2020)

Broad activity across local equities


The MSE Equity Price Index erased some of yesterday’s strong uplift as it retreated by 0.16% to 4,041.742 points. Activity took place across twelve equities – four trended lower, three posted gains whilst five companies closed the day unchanged. Trading volumes contracted to €0.31 million with 50% of today’s activity taking place in RS2. Download a copy of today’s Equity Market Summary.

RS2 Software plc maintained the €2.28 level across 69,485 shares having a market value of €0.16 million. On Tuesday, RS2 announced that one of its subsidiaries concluded a major processing outsourcing agreement with one of the largest acquirers in the US for a 10-year term with the option to renew. RS2 noted that this latest development is a milestone achievement that falls under its expansion strategy of extending its operations in the US.

Also in the technology segment, BMIT Technologies plc retained the €0.48 level on 51,000 shares.

Three deals totalling 40,000 shares left the equity of FIMBank plc at the USD0.38 level.

International Hotel Investments plc and PG plc traded flat at €0.585 and €2.00 albeit on light volumes.

Low trading activity also took place in the equities of MIDI plc and Harvest Technology plc which lost 2.4% and 1.3% to €0.40 and €1.47 respectively.

A single deal of just 4,000 shares forced the equity of Medserv plc to move 4.3% lower to a fresh multi-year low of €0.67.

The other negative performing equity was Bank of Valletta plc as it dropped by 2.9% back to the €1.01 level across 25,760 shares.

Meanwhile, GO plc recaptured the €3.60 level (+0.6%) across 7,100 shares. Today, GO’s subsidiary in Cyprus – namely Cablenet Communication Systems Ltd – published a slide show in relation to the proposed issuance of €40 million 4% unsecured bonds maturing in 2030. The proceeds from the bonds are largely earmarked for financing capital expenditure (€14.6 million) to support the continued growth of Cablenet particularly in the mobile segment as well as refinance existing debt (€21.7m).

Malta International Airport plc added 1.7% to regain the €5.90 level across 7,079 shares. In an interview published on Tuesday on the local media, MIA’s CEO Mr Alan Borg explained that as the airport operator will soon resume operations on 1 July, it will be introducing social distancing technology alongside a designated surveillance team and also limiting connectivity to direct fights only. Mr Borg also opined that it will take up to three years for the airline industry to completely recover from the ‘COVID-19’ setback.

Simonds Farsons Cisk plc extended yesterday’s gain as it advanced by a further 1.9% to the €8.20 on a total of 1,297 shares.

Following yesterday’s sharp drop of 0.43%, the RF MGS Index lost a further 0.27% to a new seventeen-month low of 1,096.581 points. Attention across international financial markets was centred on the monetary policy meeting of the ECB during which the central bank increased the size of its ‘Pandemic Emergency Purchase Programme’ (“PEPP”) by €600 billion to €1.35 trillion. The ECB also said that it will extend the time horizon of the PEPP “to at least the end of June 2021” and “until it judges that the coronavirus crisis phase is over”. With respect to the ‘Asset Purchase Programme’ and interest rates, the ECB did not implement any changes and reiterated its pledge towards its ultra-loose monetary policy “for as long as necessary”. In response, Spanish and Italian government bond yields dropped sharply whilst Germany’s benchmark 10-year Bund yield surged, thus resulting in a much narrower credit spread on the bonds of the two largest peripheral countries. Meanwhile, German Chancellor Angela Merkel yesterday unveiled a €130 billion fiscal stimulus package to help revive Europe’s power-house economy. Included in the plan is a temporary cut in value-added tax; a €50 billion fund addressing climate change, innovation and digitalisation; an additional €25 billion liquidity and loan support programme for small and medium-sized businesses; and a cap on social security contributions until 2021.