Daily Market Highlights (06.05.2021)

Heightened activity in BOV shares

 

The MSE Equity Price Index rallied by 1.32% to 4,029.051 points as the strong gains in FIMBank and IHI, coupled with the positive performances of BOV and Harvest, offset the declines in MIA, HSBC and Farsons. Trading activity improved markedly to €0.27 million largely on the back of increased volumes in BOV shares. Download today’s Equity Market Summary.

Bank of Valletta plc added 1.1% to regain the €0.90 level on volumes totalling 189,324 shares having a market value of €0.17 million. Today, BOV announced that the full transition from Raiffeisen Bank to Western Union in relation to payments in USD is planned to start in the coming days. Moreover, the bank published a Quarterly Update wherein it explained that revenues decreased by 4% in Q1 2021 but operating costs increased by 4% mainly due to increases in employee compensation, investment in technology, and higher amortisation charges. The bank’s financial performance in the first three months of the year was also negatively impacted by impairment charges related to long-outstanding non-performing loans. On the other hand, de-risking projects are now being phased-out whilst the bank’s share from its associate investments was higher than expected. Overall, BOV posted a pre-tax profit of €9.3 million in Q1 2021 which is in line with the performance recorded during the same period in 2020. Looking ahead, the bank explained that it continues to focus on its operations with a view of increasing efficiencies and enhance customer experience.

Also in the banking sector, FIMBank plc surged 23.4% to the USD0.358 level albeit on trivial amounts.

Low trading activity also took place in the equity of International Hotel Investments plc as it rebounded by 8.8% to the €0.68 level. Yesterday, IHI announced that it signed an agreement with private investment firm Reuben Brothers to manage and operate ‘The Surrey Corinthia Hotel’ in New York. The property, which was acquired by the Reuben Brothers in 2020 reportedly for a total consideration of USD150 million, is currently undergoing an extensive transformation and is expected to reopen in early 2023. This development marks Corinthia Group’s penetration in the US and is also the second collaboration with Reuben Brothers following the agreement concluded in October 2019 for a new Corinthia Hotel in Rome.

The other positive performing equity today was Harvest Technology plc as it advanced by 1.4% back to the €1.46 level across 38,688 shares. Today, Harvest published a Quarterly Financial Update providing information about its performance in Q1 2021. In this respect, the company explained that it recorded a profit before tax of €1.12 million, representing an increase of 7% when compared to the projections at the time of the IPO, as well as a 34% improvement over the same period in 2020 on the back of improved business volumes and higher profit margins. Looking ahead, Harvest noted that as economies continue to adjust to the post-COVID era, it will maintain its commitment to investments with a view of supporting its growth strategy. Harvest reiterated its pre-tax profit target of €4 million for 2021 whilst also added that it expects to distribute an aggregate dividend amount similar to that distributed in 2020 (which amounted to a total net dividend of €0.06 per share), split over two interim payments during the course of 2021 and a final dividend in the first part of 2022.

Meanwhile, Malta International Airport plc retracted back to the €6.20 level after failing to hold on to an intra-day high of €6.30. A total of 4,710 shares changed hands. On Tuesday, MIA published the April 2021 traffic results showing a 94% drop in passenger traffic. The airport operator also made reference to the recent update by the Airports Council International Europe which is now predicting full recovery to 2019 passenger volumes by 2025. Elsewhere, in another development, three separate airlines, namely Cyprus Airways, Air France and Aeroflot have all announced their intentions to start services to Malta in the summer. Twice-weekly flights are expected to be serviced between Malta and Larnaca, Paris and Moscow respectively.

A single deal of just 500 shares forced the equity of HSBC Bank Malta plc to move 1.8% lower to the €0.805 level.

Simonds Farsons Cisk plc lost 2.6% to the €9.50 level across 1,885 shares.

LifeStar Holding plc announced that it received regulatory approval in relation to the IPO of its life insurance subsidiary LifeStar Insurance plc. As a result, LifeStar Holding will be offering for sale just over 18.5 million shares in LifeStar Insurance at an offer price of €0.54 per share. Moreover, LifeStar Holding will be offering 6.57 million shares that it holds in LifeStar Insurance to its shareholders in exchange for their ordinary shares in LifeStar Holding, at an exchange ratio of 1:1. LifeStar Holding explained that the net proceeds from the IPO will be primarily used to redeem the €10 million 5% unsecured bonds maturing on 2 June 2021. The shares of LifeStar Holding are expected to be admitted to the Official List of the Malta Stock Exchange on 31 May 2021 and trading is expected to commence on 1 June 2021.

The RF MGS Index moved 0.03% lower to 1,109.026 points as the extended upward trend in commodity prices continued to sustain higher movements in bond yields. In fact, copper prices reached 10-year highs amid supply constraints. Meanwhile in the UK, although the Bank of England decided to reduce the pace of its asset purchase programme, the central bank remarked that its decision was operational rather than a change in monetary policy as it maintained its key interest rate at a record low of 0.1%.

Today, AX Group plc announced that the Planning Authority approved the development permit in relation to the Verdala Hotel & Terraces project. This development will be spread over six floors above highest street level and two levels below and will include serviced residential units and luxury apartments earmarked for sale, retail spaces, a boutique hotel with ancillary facilities, as well as car parking facilities accommodating 176 motor vehicles. The project is estimated to cost around €50 million. Moreover, the boutique hotel and serviced apartments are projected to commence operations in 2024 whilst the development of the luxury apartments is projected to be completed in 2025.

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