Daily Market Highlights (16.03.12)

  • MSE Share Index slumped 0.9% to a new 32-month low of 2,960.079 points following a 9,3% drop in GO’s share price. HSBC, IHI and MIA also traded lower today whilst BOV and FIMBank closed unchanged. Download a copy of the Equity Market Summary. During the last five trading sessions, the local equity benchmark slid 1.5% lower as the weekly decline in HSBC, IHI, GO and MIA, amongst others, offset the marginal weekly increase in BOV and the 13.3% jump in FIMBank’s share price.
  • On the bond market, the Rizzo Farrugia MGS Index rounded off a dismal week with a further marginal decline to yet another 3-month low of 983.019 points. This reflects this week’s sharp recovery in yields from a low of 1.74% to 2% this morning on the back of renewed investor confidence following the publication of positive economic data from Germany and the United States as well as a respite in Greece’s sovereign debt crisis after the country managed to successfully complete a debt swap with private investors and subsequently obtain its second bailout amounting to €130 billion. This afternoon, yields extended their recovery as they broke through the 2% level to reach a 3-month high of 2.07% on some further positive news from across the Atlantic.
  • Subscriptions by preferred applicants for the new €7.5 million Corinthia Finance plc bond now closed. The new bonds carry a 6% coupon and mature between 2019 and 2022.
  • Earlier this week, BOV announced the issue of the second series of Notes under its €125 million Debt Issuance Programme. The first tranche of this second series will encompass €40 million of Notes carrying a coupon of 4.25% and maturing in 2019. Further details will be available in the Final Terms which will be issued next Tuesday.
  • GO’s equity today plunged to its all-time low of €0.76 following this morning’s full-year results publication which revealed a record €51 million loss and the lack of a dividend for shareholders. The subdued performance is again solely attributable to the losses incurred by the Greek telecommunications company Forthnet (in which GO and its major shareholder have a stake of 41%) which offset the steady performance of the Maltese operation. In fact, Forthnet’s losses, which included a €128.5 million impairment of goodwill on its Pay-Tv business, led to a €62.3 million charge in ‘losses attributable to investments in jointly-controlled entity’. Coupled with the previous years’ write-downs, GO’s indirect investment in Forthnet (originally valued at around €120 million) is now worth only €3.6 million. For the first time since the privatisation way back in 1998, GO’s Directors did not recommend a dividend. The Directors explained that at this stage it is important for the GO Group to replenish its reserves after these have been depleted by the various impairments on GO’s indirect investment in Forthnet in recent years. GO now ranks as the eight largest company by market capitalisation compared to a fourth position in early 2010.
  • Meanwhile FIMBank held on to the USD0.85 level on activity of 100,500 shares to end the week as the best performing equity with a 13.3% jump. On Wednesday, FIMBank plc informed the market of a possible transfer of shares amounting to 38.8% of the total issued share capital from the largest shareholder Massaleh Investments K.S.C.C. to Burgan Bank. Furthermore, Burgan Bank subsequently intends to inject new equity which will increase its potential holding to over 50% thereby initiating a Mandatory bid for the remaining shares. The above transactions are subject to the necessary approvals. It is also noteworthy to highlight that FIMBank’s equity is still trading with the entitlement to the net dividend of USD0.02 per share together with the 1 for 25 bonus issue as announced in this week’s 2011 preliminary financial results publication. Further details of results available here.
  • HSBC Bank shares eased a further 1.2% lower to the €2.55 level across five trades totalling 23,635 shares. Equity ended the week 3.2% lower mainly as it started trading ex-dividend as from the mid-week session. The dividend will be paid on 27 April following shareholders’ approval at the upcoming Annual General Meeting scheduled to be held on 18 April.
  • On the other hand, BOV traded unchanged at the €2.16 level across two trades totalling just over 2,800 shares. Other bids remain unsatisfied at the closing price with lowest offers at the €2.17 level. BOV’s equity ended the week 0.5% higher.
  • Yesterday’s financial results publication by Lombard Bank failed to generate any trades as the equity remained inactive during this morning’s session with offers in the market at the last closing price of €2.52 and highest bids placed at the €2.50 level. The 2011 preliminary results reveal a 20.9% drop in profitability to €6.6 million mainly due to the significant increase in net impairments to €2.2 million reflecting the Bank’s prudent approach to lending especially in the prevailing challenging economic conditions. The Directors proposed an unchanged final gross dividend of €0.115 per share to all shareholders as at close of trading on 20 March. Further details available here.
  • Medserv and MIA will be publishing their full-year results next week on Wednesday 21 March and Thursday 22 March respectively.