Daily Market Highlights (24.11.11)

  • Local equity market dragged lower for the second consecutive session. MSE Share Index down 0.5% today on the back of declines in the share prices of the two large banks. Download a copy of today’s Equity Market Summary.
  • For the third consecutive session, the Central Bank of Malta Stockbroker lowered its Malta Government Stock bid prices in line with the hike in Eurozone yields which have now reached a level exceeding 2.2%. Over recent days, fear and uncertainty gripped European bond markets particularly following yesterday’s intervention by the Bundesbank in a German sovereign bond auction. Concern over Europe’s ability to manage and handle the prevailing sovereign debt crisis are at a high as investors have now started to question Germany’s ability to continue supporting the other troubled Eurozone countries. Furthermore, this morning Fitch downgraded Portugal’s credit rating from ‘BBB-‘ to a junk status of ‘BB+’ on the back of large fiscal imbalances, high indebtedness and depressed economic outlook.
  • The Rizzo Farrugia MGS Index dropped 0.7% today to a new 7-month low of 971.479 points. However, although the indicative bid price quoted by the Central Bank of Malta for the 5.25% MGS 2030 (I) declined by 99 basis points to an all-time low of 99.29%, over €200,000 (nominal) of this stock changed hands in the market at prices ranging between 102.65% and 102.70%.
  • Today the Treasury announced that the Institutional tranches of the Malta Government Stocks issued last week will be admitted to the Official List as from today with trading expected to commence as from tomorrow. The FR% MGS 2014 (V) has also been listed today. However the MSE has not indicated when the retail tranches of the fixed rate stocks will be listed.
  • BOV failed to hold on to this week’s earlier increases as its share price tumbled 1.2% back to the €2.50 level on increased volumes of 76,100 shares. Few other offers unsatisfied at the closing price whilst best bids pitched at the €2.46 level. This afternoon BOV published the agenda for the upcoming Annual General Meeting scheduled to be held on 16 December. Amongst the resolutions on the agenda, shareholders will be asked to approve the recommended final gross dividend of €0.08 per share and a 1 for 8 bonus share issue.
  • Following yesterday’s 2.2% drop, HSBC closed again in negative territory with the equity sliding a further 0.8% lower to €2.61 on low volumes of 5,319 shares. In the Interim Statement published last week, the Directors revealed that trading conditions remained challenging and a more difficult 2012 is expected. In response to this, the Directors approved a cost-savings plan which will result in a one-off charge of approximately €10 million for the 2011 financial year. Further details available here.