Daily Market Highlights (25.06.2021)

 GO bond issue over-subscribed by nearly threefold


The MSE Equity Price Index eked out a 0.67% gain to 3,892.116 points as it continued to rebound from Wednesday’s 2-month low. BMIT, BOV, Farsons and MIDI all traded higher whilst HSBC, Harvest, MIA, PG and RS2 closed unchanged. Meanwhile, overall trading activity contracted to €0.07 million from €0.12 million yesterday. Download today’s Equity Market Summary.

Today’s main highlight was the announcement made by GO plc, in relation to the allocation policy of the issue of €60 million 3.50% unsecured bonds maturing in 2031. In total, GO received applications for an aggregate amount of just over €176 million. Applications received from Preferred Applicants amounted to €65.1 million. Each application will be allotted the first €2,000 in full and 24.999% on the remaining amount (rounded to the nearest €100). In addition, applications received from the General Public amounted to €80.9 million. Each application will be allocated the first €1,000 in full and 7.7956% on the remaining amount (rounded to the nearest €100). Refunds of unallocated monies will be processed on 5 July 2021 and interest on the bonds will start accruing as from today. The Bonds are expected to be admitted to listing on the Official List of the Malta Stock Exchange on 5 July 2021 and trading is expected to commence as from 6 July 2021.

Another important development today was the announcement made by Medserv plc confirming the completion of the share for share exchange with Regis Holdings Limited. Commenting on the conclusion of the transaction, Medserv Chairman Mr Anthony Diacono stated that: “The coming together of the two highly specialised management teams of the respective Groups will create a very strong asset bringing with them the guarantee of continuity for our clients as most members will be retained. This vital in-depth know-how will continue to generate new business going forward. This strategic development has been well received by all stakeholders and is seen as a positive development taking place at the right time. I am optimistic that the Company will continue to strengthen its market position across the globe.”

In the technology sector, BMIT Technologies plc rose by 2.1% as it regained the €0.49 level across 4,100 shares whilst Harvest Technology plc traded flat at the €1.53 level on 3,635 shares. Meanwhile, RS2 Software plc remained at the €1.92 level as 5,200 shares changed hands.

Simonds Farsons Cisk plc recovered from yesterday’s sharp decline as it rebounded by 5.5% to the €8.70 level across 1,025 shares.

MIDI plc advanced by a further 2.8% to the €0.37 level as 2,000 shares changed hands.

In the retail banking sector, Bank of Valletta plc edged 1.7% higher to the €0.895 level across 6,258 shares whilst a single trade of 1,169 shares in HSBC Bank Malta plc left the equity unchanged at the €0.79 level.

Similarly, PG plc closed unchanged at the €2.26 level across a single deal of 2,900 shares. Today, PG announced that its Board of Directors is scheduled to meet on 6 July 2021 to consider the distribution of an interim dividend for the financial year ended 30 April 2021.

Elsewhere, Malta International Airport plc held on to the €6.35 level on volumes of 4,195 shares. Yesterday, Malta was included on the UK’s green list for travel as from 30 June. The UK represents Malta’s largest market, having welcomed 650,000 Briton travellers in 2019. Moreover, although Malta is currently only recognising vaccination certificates issued by the Maltese authorises, discussions are currently underway between the Maltese and UK government on whether the certificates issued by the UK National Health Service can be recognised by Malta.

Today, Mediterranean Investment Holdings plc (“MIH”) published an updated Financial Analysis Summary which provided the financial forecasts for 2021. Revenues are expected to drop by 6.5% to just under €24 million, reflecting the negative impact of the devaluation of the Libyan Dinar at the start of 2021 despite the stable occupancy level of 53% at Palm City. Moreover, the financial performance of MIH is also expected to be dented by a substantial one-time loss on exchange arising in connection with the conversion of monetary assets and liabilities denominated in Libyan Dinars to Euro. Notwithstanding this negative impact, MIH is still forecasted to post a net profit of €6.6 million. In terms of credit metrics, MIH’s net debt to EBITDA multiple is anticipated to deteriorate to 4.3 times compared to 3.73 times in 2020 whilst the interest cover is expected to drop to 2.25 times from 3.96 times in 2020. On the other hand, MIH’s gearing ratio (calculated as total debt divided by total debt plus equity) is expected to improve to 30.1% from 33.8% as at end 2020.

The RF MGS Index inched 0.02% higher to 1,100.015 points. Today, the European Central Bank President Christine Lagarde addressed the EU leaders in Brussels and explained that although the Eurozone is recovering faster than expected, the continued fiscal and monetary support are necessary to ensure that the turmoil brought by the pandemic does not leave repercussions on the economy. Statistics from Italy showed that business and consumer confidence have indeed surpassed pre-pandemic levels, while Germany’s consumer confidence remained negative but better than previous forecasts. Meanwhile, in the US, President Biden has managed to negotiate an agreement with a bipartisan group of senators on an infrastructure plan which shall include $579 billion in new investments in roads, internet, electric utilities and related projects.