Daily Market Highlights (20.03.12)

  • Local equity market partially recovers from last week’s 1.5% drop as the MSE Share Index rose by 0.3% to 2,970.286 points on the back of increases in the share prices of most of the active equities, including BOV, FIMBank and GO. On the other hand, Lombard Bank traded lower on weak activity. Download a copy of the Equity Market Summary.
  • On the bond market, the Rizzo Farrugia MGS Index declined for the twelfth time in a row as Eurozone yields moved higher compared to last Friday morning reflecting the general improved investor sentiment.
  • This morning, Corinthia Finance plc announced that its issue of €7.5 million 6% bonds maturing between 2019 – 2022 was oversubscribed through subscriptions from existing bondholders of the maturing 6.75% bonds. Therefore, the Intermediaries offer did not take place. The Company will be announcing its allocation policy by not later than 29 March.
  • Today, BOV published the Final Terms in relation to 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 on the new notes together with copies of the Final Terms and other relevant documentation available here.
  • On the equity market, following last week’s 0.5%, BOV’s share price rose by a further 0.9% during this morning’s session to regain the €2.18 level. Seven trades totalling 10,296 shares took place today with further bids remaining unsatisfied at the closing price and lowest offers at the €2.21 level.
  • Similarly, FIMBank extended last week’s 13.3% increase with a further 2.4% rise to USD0.87 on a single deal of 28,000 shares. Last week, 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. Further details of results available here.
  • GO recovered by 1.3% from its all-time of €0.76 to the €0.77 level on volumes of 4,700 shares. Last week’s full-year results publication 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.
  • Middlesea Insurance edged 1.5% higher to regain the €0.70 level across three trades totalling just over 2,000 shares. Other bids unsatisfied at the closing price whilst lowest offers pitched at the €0.72 level.
  • On the other hand, Lombard Bank’s share price slipped by 0.8% to a new 17-month low of €2.50 on very low volumes of 810 shares. Today’s downturn follows last week’s full-year results publication which revealed a 20.9% drop in profitability to €6.6 million mainly due to the 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 today. Further details available here.
  • Medserv and MIA will be publishing their full-year results this week on Wednesday 21 March and Thursday 22 March respectively.