Daily Market Highlights (18.02.2020)

HSBC lifts MSE Equity Price Index to 7-week high


The MSE Equity Price Index trended higher for the fourth consecutive session with a further 0.54% increase to a seven-week high of 4,699.762 points. The gains in five equities outweighed the losses in Tigné Mall, whilst two other equities ended the day unchanged. Trading activity amounted to €0.3 million, 38% of which was traded in HSBC shares as the Bank kicked off this year’s reporting season in the local equity market. Download today’s Equity Market Summary.

HSBC Bank Malta plc surged by 4.8% today to close at the €1.10 level across heightened activity of 105,680 shares after touching an intraday high of €1.14 (+8.6%). The upward movement in share price followed the publication of its 2019 financial results. The bank reported a 24% increase in adjusted profit before tax which excludes the impact of a one-off restructuring provision of €16.7 million which is expected to deliver sustainable cost-savings going forward. The improved operational performance exceeded management expectations and was supported by revenue growth in retail banking, improved balance sheet management and cost reduction initiatives. HSBC was also able to continue delivering on its strategic plan, launching new digital solutions and re-modelling traditional channels.

The Board of Directors recommended a final net dividend of €0.014 per share. Coupled with the interim dividend paid in September 2019 of €0.011, the total dividend for the 2019 financial year amounts to €0.025 representing a 44% payout ratio on the reported profit. The final dividend will be paid on 15 April 2020 to all shareholders as at close of trading on 5 March 2020. Looking ahead, HSBC Malta’s CEO Mr Andrew Beane noted that the bank’s commitment to invest and remodel its business in recent years in order to further embed high standards has resulted in a business becoming “smaller but stronger”. Mr Andrew Beane cited that this phase of the bank’s strategy was now complete and that the “…future focused HSBC model is strongly profitable, is producing dividends for shareholders and is protecting our stakeholders from the range of risks we face.”

RS2 Software plc rose by a further 0.8% to reach yet another new all-time high of €2.52 across 32,770 shares.

A single trade of 20,000 shares saw the equity of BMIT Technologies plc climb by 1% to recapture the €0.525 level.

Similarly, International Hotel Investments plc moved 0.6% higher to the €0.805 level across trivial volumes.

Santumas Shareholdings plc added 6.7% as it reached the €1.50 level albeit on just 648 shares.

Elsewhere, Tigné Mall plc fell by 2.2% to the €0.88 level as 8,300 shares changed hands.

Among the large companies, Malta International Airport plc retained the €7.00 level across 7,434 shares after recovering from an intraday low of €6.95 (-0.7%). The company is due to publish its 2019 full-year financial results on 26 February. The Directors will also consider the payment of a final dividend.

Meanwhile, Bank of Valletta plc failed to hold onto its intraday high of €1.06 (+1%) as the equity also closed unchanged at the €1.05 level across 31,394 shares.

The RF MGS Index rose by 0.29% to 1,153.216 points. Euro zone bond yields edged up yesterday as China took more steps to support its economy in an attempt to cushion the adverse impact from the coronavirus outbreak. Meanwhile, earlier today, the ZEW Indicator of Economic Sentiment for Germany fell 18 points from the previous month to 8.7 in February 2020, well below market forecasts of 21.5. A similar drop was then recorded at EU level, with the same indicator declining by 15.2 points from the previous month to 10.4 in February 2020, which was also far below market expectations of 30. The primary cause for the considerable drop in sentiment is the negative effects of the coronavirus outbreak on world trade.