Daily Market Highlights (24.06.2016)

  • The MSE Share Index closed in negative territory for the first time this week as it retreated by 0.48% to 4,479.895 points on very low activity. The declines in the share prices of four large companies (BOV, HSBC, MIA and GO) outweighed the gains in another three equities. Despite today’s decline, week-on-week, the local equity index still registered a gain of 0.45%. Download a copy of today’s Equity Market Summary.
  • On the bond market, the RF MGS Index erased all the gains registered in the previous four days as it slumped by 0.46% (the steepest decline in five months) to 1,148.309 points. The hardest hit were the long-dated Malta Government Stocks with maturities of fifteen years and over, with each declining by over 100 basis points. The outcome of the UK’s historic referendum vote in favour of leaving the EU sent the whole financial world in disarray, triggering declines in equities and a surge in demand for ‘safe haven’ assets. Indeed, the 10-year benchmark German Bund yield and the 10-year UK gilt touched new record lows of -0.170% and 1.018% respectively. In contrast, the 10-year yields of the two largest peripheral countries with similar credit ratings to Malta – Italy and Spain – lost ground. At one point, the 10-year Italian yield climbed to 1.654% – the highest level since early October 2015. Likewise, the yield of the 10-year Spanish Government paper touched a four-month high of 1.742% before easing back.
  • Bank of Valletta plc suffered the first decline this week as it retreated by 1.7% today to the €2.201 level across 17,214 shares. On Wednesday, BOV issued an announcement confirming that Visa Inc. completed the acquisition of the entire share capital of Visa Europe Limited in which BOV is a Principal member and a shareholder. The Bank’s share of proceeds from this transaction amounts to €29.1 million comprising €22.0 million in cash and a further €7.1 million in Visa Inc. preferred stock. The total consideration will be reflected in the Bank’s financial statements for the financial year ending 30 September 2016. BOV will be retaining the cash consideration within its reserves in order to strengthen its Core Tier 1 regulatory capital.
  • A similar announcement was also issued by HSBC Bank Malta plc yesterday. In its statement, the Bank said that it received a cash consideration of €7.6 million (to be recognised as a one-off gain in the 2016 financial statements) and convertible preference shares, together with a deferred cash payment expected to be paid in 2019, amounting to circa €1.4 million. The equity dropped back to the €1.60 level (-0.9%) on trivial volumes.
  • The worst performing equity today was Malta International Airport plc as it declined by 2.4% to a fresh five-month low of €4.10 across 1,882 shares.
  • GO plc also finished lower today, as the equity retreated by 0.9% to the €2.88 level on volumes totalling 3,450 shares. All GO shareholders ought to have received the Offer Document from TT ML Limited. The acceptance period closes on 22 July.
  • In contrast, International Hotel Investments plc continued to add to its recent gains as the equity advanced by a further 2.8% to a new twelve-week high of €0.689 on shallow volumes. Week-on-week, the share price of IHI increased by 6.0%. Shareholders as at Monday 27 June will be entitled to a 3 for 100 bonus share issue. Furthermore, shortly after the close of today’s session, IHI issued an announcement in which it revealed its intentions of issuing a new €55 million secured bond maturing in 2026. Subject to regulatory approval, IHI shareholders as at 27 June 2016 will be given preference to subscribe to the first €30 million of the new bonds.
  • Two deals totalling 37,722 shares lifted the equity of Malta Properties Company plc up by 0.2% to the €0.507 level.
  • The other positive performing equity today was Lombard Bank Malta plc which bounced back by 1.1% to the €2.021 level across 2,205 shares. The Board of Directors is scheduled to meet on 25 August to consider and approve the interim financial statements covering the six months ending 30 June 2016.
  • Also in the banking segment, FIMBank plc maintained its six-year high of USD0.92 on just 1,200 shares.
  • Thin volumes left the equities of Loqus Holdings plc and Mapfre Middlesea plc flat at €0.131 and €2.19 respectively.
  • Five million new shares of RS2 Software plc were admitted to listing today following the recent bonus share issue. Trading in these new shares is possible as from Monday 27 June.

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