Daily Market Highlights (27.05.11)

  • MSE Share Index declines by 0.5% to 3,378.974 points on the final trading day of the week as BOV’s share price slipped 1.8% lower following yesterday’s announcement revealing a buy-back offer to the shareholders of the La Valette Property Fund. Share prices of Farsons and MaltaPost also in negative territory today whilst the other two active equities closed unchanged. Download a copy of today’s Equity Market Summary. This week the Share Index slid 0.5% lower as seven equities, including BOV, GO, MIDI and Farsons, traded lower during the last five sessions to offset the 0.2% rise in HSBC.
  • On the local bond market, the Rizzo Farrugia MGS Index closed the week 0.24% higher mainly following this morning’s rise as the benchmark Eurozone yields dipped below the 3% level for the first time since mid-January. Euro yields are circa 50 percentage points below the 2011 high of 3.51% (reached in mid-April) on concerns of the sustainability of sovereign debt (particularly of Greece) and the contagion effects it may have on the other countries in the eurozone. Such uncertainties intensified in recent weeks following the downgrade of Greece’s credit rating and a warning of further possible downgrades of other countries such as Italy and Belgium.
  • BOV’s equity touched a new 7-month low of €2.74 before recovering to close of €2.75 representing a 1.8% drop from the previous close. Today’s downturn follows yesterday’s announcement by the Bank that it will be offering to buy-back the shares of the La Valette Multi Manager Property Fund. BOV is offering €0.75 per share to all investors as at 18 August 2008. The price is composed of €0.50 per share for the value of the investors’ Main Pool shares and the Side-Pocket shares and a further €0.25 per share as compensation for the fund’s underperformance in comparison to its peers. Shareholders of the Property Fund have until the 30 June 2011 to accept the offer. The Bank reserves the right to revoke the offer if acceptances received amount to less than 70% of the outstanding shares. In the coming days, the investors eligible to this offer should receive all the relevant documentation together with a detailed explanation of the offer and the reasons behind it. If all investors accept the offer, the Bank will incur a charge of €14.5 million in its income statement. Equity ended the week 1.4% lower.
  • Meanwhile HSBC shares inactive today with further offers unsatisfied at the closing price of €2.985 whilst best bids pitched at the €2.97 level. The Bank’s equity was the only one to close the week in positive territory with a 0.2% rise.
  • The Greek telecoms Group Forthnet published its first quarter results of 2011 yesterday afternoon. Forthnet revealed a 3.3% increase in revenue to €102.6 million with the adjusted EBITDA rising by 8.8% to €18.5 million which was mainly driven by the Group’s Telecom Business. This resulted in an EBITDA margin of 18%. The Forthnet Group explained that during the first quarter of 2011 it continued to increase its subscriber base and to add customers that bundle Telecom and PayTV services. The Forthnet Group confirmed that it is in advanced stages of discussions with its lending syndicates in a bid to refinance its maturing stock of debt for 2011 and 2012 and extend the repayment terms beyond 2013. GO plc, which has an indirect investment in Forthnet, failed to recover this week’s earlier declines as the equity closed unchanged at the €1.37 level across five trades totalling 3,400 shares. GO’s share price dropped 0.7% this week.
  • Farsons’ equity active for the first time in three weeks as its share price retreated by 2.8% back to the €1.75 level on low volumes of 1,180 shares. The company is scheduled to hold its Annual General Meeting on 23 June.
  • IHI also unchanged during this morning’s session as a further 11,000 shares change hands at the €0.80 level. Other offers unsatisfied at the last traded price whilst best bids now placed at the €0.70 level.
  • A small deal of 300 MaltaPost shares transacted at the €1.08 representing a 0.4% drop from the previous close. Few other offers unsatisfied at the closing price whilst best bids still in the market at the €1.02 level.
  • Plaza Centres’ Interim  Statement, published earlier this week, failed to generate any trades as the equity remained inactive with shares on offer at the last closing price of €1.70. The announcement revealed that since the start of 2011 the Company maintained a satisfactory level of performance in line with the Directors’ expectations. Moreover Plaza noted that the new wing, which was opened in March 2011, is already 85% occupied with negotiations for the remaining spaces underway. The overall occupancy rate is 92% which is expected to increase by the third quarter of this year.