Daily Market Highlights (04.08.2016)

  • The MSE Share Index finished higher for the first time this week as it rebounded by 0.11% to 4,430.393 points from a near 7-month low on the back of gains in the share prices of BOV and RS2 which marginally outweighed the declines in MIA and Malita Investments. Nonetheless, trading volumes were very weak today as merely €0.05 million worth of shares changed hands. Download a copy of today’s Equity Market Summary.
  • On the bond market, the RF MGS Index also registered a minimal rebound today as it advanced by 0.05% to 1,156.340 points. While the 10-year benchmark German Bund yield was largely unchanged this morning at -0.040%, the corresponding 10-year yields of Italy trended lower whilst that of Spain moved marginally higher. Nonetheless, euro zone sovereign yields slid lower this afternoon to -0.07% after the Bank of England cut its base rate for the first time in seven years to a new record low of 0.25% from 0.50% in line with markets’ expectations. Furthermore, the British central bank boosted its bond-buying programme by a further GBP60 billion (from GBP375 billion to GBP435 billion). Additionally, the Bank of England will also start purchasing high-grade corporate bonds (GBP10 billion) and introduced a liquidity facility for banks of up to GBP100 billion. The BoE further stated that it would take “whatever action is necessary” to achieve stability in the wake of the UK’s vote to leave the EU as it is now expecting the UK’s economy to stagnate for the rest of 2016 and also revised lower its growth projections for 2017 and 2018.
  • Yesterday, HSBC Bank Malta plc reported a 13.8% increase in pre-tax profits to €41.3 million in the first half of the year ended 30 June 2016. Nonetheless, the improvement in profitability came on the back of a one-off gain related to the sale of shares in Visa Europe. Indeed, excluding the aforementioned one-off gain, the pre-tax profit of HSBC would have amounted to €30.5 million, representing a 15.9% drop from the previous comparable figure. The Bank declared a gross interim dividend of €0.071 per share (net: €0.0462). This is 39.2% higher than the gross interim dividend for the first six months of 2015. Accordingly, the payout ratio advanced to 61.9% from 49.9% for H1 2015. The interim dividend will be paid on 9 September to all shareholders as at the close of trading on Wednesday 10 August. The equity closed today’s session unchanged at the €1.64 level on shallow volumes totalling 3,000 shares.
  • In contrast, Bank of Valletta plc regained the €2.22 level (+0.9%) across 5,517 shares. This morning, BOV issued a company announcement explaining the mechanism it will be adopting for the election of its directors.
  • A single deal of 3,640 shares lifted the equity of RS2 Software plc 0.3% higher from its six-month low of €1.90 to the €1.905 level. The Company is scheduled to release its 2016 interim financial statements on 11 August.
  • Meanwhile, Malta International Airport plc slipped back to the €4.10 level (-1.1%) on insignificant volumes of 740 shares. After recently upgrading its 2016 year-end passenger traffic forecast to +7.5% growth, yesterday MIA published the traffic statistics for the month of July during which passenger movements grew by 5.9% on the back of a 3.1% increase in seat capacity and an improved seat load factor of 88% – a record for the month of July. In aggregate, during the first seven months of the year, passenger movements amounted to more than 2.76 million – representing a 9% increase over the previous year’s comparable period.
  • Malita Investments plc traded for the first time in the last eight sessions as it eased by 1.1% to the €0.88 level on 27,000 shares. Malita is expected to issue its interim results later on today.
  • Trading in the recently issued €50 million 4.0% MIDI plc 2026 secured bonds commenced today, with the price touching an intra-day high of 104.50% before closing at the 103.01% level on volumes totalling €169,900 nominal.

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