Daily Market Highlights (11.06.2021)

MSE Equity Price Index resurfaces above 4,000 level


The MSE Equity Price Index advanced by 0.3% to a two-week high at 4,009.246 points as the gains in Lombard and HSBC outweighed the decline in RS2. Meanwhile, MIA, BMIT and MPC all closed unchanged as overall trading activity eased to €0.05 million. Download today’s Equity Market Summary.

A single trade of just 400 shares lifted HSBC Bank Malta plc 1.9% higher to the €0.825 level. Today, HSBC announced that it will be rolling out a new strategic initiative aimed at further improving the bank’s operational structure in order to drive efficiencies and enhance customer experience. HSBC explained that this initiative relates primarily to the transformation and automation of certain areas within the bank, and also to a planned transfer of a number of employees and activities to a local service provider. To achieve this, the bank is proposing the launch of two Voluntary Redundancy Schemes that will impact a limited number of areas in the bank, subject to MUBE (Malta Union of Bank Employees) agreement. The bank noted that the restructuring costs to deliver these changes will be booked in the 2021 financial results and that the amount will depend on the number of applications received.

Also in the retail banking sector, Lombard Bank Malta plc surged by 12.2% to recapture the €2.20 level as 500 shares changed hands.

Malta Properties Company plc closed flat at the €0.55 level across 20,000 shares. Shareholders as at close of trading today will be entitled to receive the payment of a net dividend of €0.012 per share.

Malta International Airport plc failed to hold onto an intraday high of €6.40 (+0.8%) as it closed unchanged at the €6.35 level across 4,000 shares. Today, the airport operator published its traffic results for the month of May whereby it revealed that it registered 75,420 passenger movements which translates into a drop of 88.8% compared to the same month in 2019. However, the level of passenger movements marks a slight improvement over the first four months of 2021 during which monthly passenger movements consistently remained below the 40,000 mark. The seat load factor during May stood at 62%. MIA noted that it expects seat capacity deployed by airlines in June to increase by more than double when compared to May, as passenger demand is expected to gradually start recovering. Meanwhile, yesterday Emirates airline announced that flights between Malta and Dubai (via Larnaca, Cyprus) are to restart on 14 July. The airline explained that it will be operating this route three times per week.

In the technology sector, BMIT Technologies plc remained at the €0.50 level across 1,000 shares, whilst the ordinary shares of RS2 Software plc fell by 1% to the €1.95 level across a single trade of 4,000 shares.

Today, FIMBank plc announced that Fitch Rating downgraded its credit rating to ‘B’ from ‘B+’ whilst maintaining a ‘Negative’ outlook on the bank. In its report, Fitch explained that  the downgrade reflects heightened pressures on the bank’s business model, performance and capitalisation. In particular, the rating agency views increased pressure on the bank’s performance from lower margins and due to business growth constraints given thin capital buffers over regulatory minima. FIMBank concluded the announcement by noting that although 2020 was a challenging year, the bank maintained strong capital buffers and liquidity position. In fact, FIMBank had a CET1 capital ratio of 18.5% as at 31 December 2020 whilst its Liquidity Coverage Ratio stood at 241%.

Elsewhere, this afternoon Medserv plc held its AGM during which shareholders approved all resolutions placed on the agenda including the merger with Regis Holding Limited.

The RF MGS Index extended its positive streak as it added another 0.12% to a one month high to 1,107.444 points as Eurozone yields extended their declines following yesterday’s European Central Bank (‘ECB’) decision to maintain favourable financing conditions. The ECB also revised upwards the outlook for economic activity and the projected Eurozone annual real GDP growth stands at 4.6% for 2021 and 4.7% in 2022. Similarly, Eurozone annual inflation projections were revised upwards to 1.9 % in 2021 and 1.5% in 2022 as price pressures are likely to increase this year due to temporary supply constraints and improved domestic demand.

Meanwhile, on the local front, today the Central Bank of Malta (‘CBM’) published its outlook for the Maltese economy until 2023. The CBM expects Malta’s Gross Domestic Product (‘GDP’) to grow by 4.9% in 2021, 5.4% in 2022, and 4.7% in 2023, which would result in Malta regaining 2019 GDP levels by 2022. Meanwhile, the government deficit for 2021 is expected to amount to 9.9% of GDP before gradually improving to 4.2% of GDP by 2023, which would result in a government debt-to-GDP ratio of 64.0% in 2023.