Daily Market Highlights (28.05.2021)

MSE Equity Price Index posts four-day losing streak

 

The MSE Equity Price Index fell for the fourth consecutive session with a decline of 0.50% to 3,971.223 points. The declines in Mapfre and RS2 outweighed the gains in BMIT whilst BOV, GO, MIA and Farsons all closed flat. Meanwhile, overall trading activity improved to €0.13 million. Download today’s Equity Market Summary.

RS2 Software plc recovered from an intraday low of €1.95 (-2.5%) before ending the day 0.5% lower at the €1.99 level as 7,850 shares changed hands. Meanwhile, RS2 preference shares closed 0.5% higher at the €1.86 across 8,026 shares after touching an all-time high of €1.88 (+1.6%) earlier in today’s session.

A single trade of trivial volumes forced Mapfre Middlesea plc 9.2% lower to the €2.16 level.

Elsewhere, BMIT Technologies plc rebounded by 2.1% as it regained the €0.49 level across 39,900 shares. BMIT is due to pay out a final net dividend of €0.02922 per share today.

Bank of Valletta plc traded unchanged at the €0.90 level as 23,823 shares changed hands.

Similarly, GO plc remained at the €3.40 level across 1,250 shares. Yesterday, GO published a prospectus in relation to the issuance of €60 million bonds maturing in 2031 at a coupon of 3.50% per annum. The net proceeds from the bond issue will be primarily used by the company to repay borrowings held with the European Investment Bank, to rollout a new network and for investment in information technology systems. GO has reserved up to €30 million of the bond issue for subscription by authorised financial intermediaries through placement agreements. Meanwhile, the remaining amount of €30 million will be made available for subscriptions from preferred applications and the general public. The bonds are expected to be admitted to the Official List of the Malta Stock Exchange on Monday 5 July 2021 whilst trading would be possible as from Tuesday 6 July 2021. Meanwhile, GO will be paying out a final net dividend of €0.16 per share on Monday 31 May.

Also among the large companies by market cap, Malta International Airport plc closed flat at the €6.40 level as 6,507 shares changed hands.

Meanwhile, Simonds Farsons Cisk plc remained rooted to the €9.00 level across 1,315 shares. On Wednesday, Farsons published its Annual Report and Financial Statements for the year ended 31 January 2021 which exceeded the projections published in the Financial Analysis Summary. Overall, the Group generated a profit before tax for the year which amounted to €4.4 million, a decrease of €7.9 million over that reported in FY2020 as the Group was heavily impacted by the coronavirus pandemic. In its commentary, the Directors explained that the immediate outlook remains uncertain, as does the speed at which the economy and the tourism market will re-open and recover to pre-Covid levels. However, given the effectiveness of the vaccine and inoculation programs, the Directors are cautiously optimistic that it will be able to report improved results in FY2022

The RF MGS Index snapped a six-day winning streak as it declined by 0.27% to 1,103.788 points. Today, the National Statistics Offices published provisional estimates which revealed that during Q1 2021, Malta’s Gross Domestic Product fell by 1.8% in volume terms when compared to the same period last year. The main drivers of this negative growth rate were service activities, industry and construction. Meanwhile, agriculture & fishing increased by 4%. Elsewhere, in the US, core personal consumption index, a key inflation indicator, rose by 3.1% in April, faster than the forecasted 2.9%, as price pressures within the rapidly expanding US economy continued to grow.

Yesterday, Medserv plc published an Interim Report providing an overview of the company’s performance during the Q1 2021 as well as the forecasts up to the end of the current quarter. Medserv explained that revenues in Q1 2021 amounted to €5.9 million which represents a 33% decline when compared to the same period in 2020. However, Medserv also noted that a rebound in activity is expected to be registered in Q2 2021. In fact, the forecasts for the first six months of 2021 show that Medserv is anticipating OCTG revenues to climb to €7.7 million which, however, would still be 11.5% lower than the amount of €8.7 million in OCTG revenues recorded in H1 2020. On the other hand, ILSS revenues are anticipated to amount to €10.7 million in H1 2021 which, in turn, is 11.5% higher than the figure of €9.6 million recorded in H1 2020. Moreover, given the projected increase in business in Q2 2021, EBITDA is expected to surge by almost 55% to €4.8 million compared to €3.1 million in H1 2021.

In a separate announcement, the company explained that Medserv Egypt has been awarded a second contract by BP. This contract, for the Integrated Facility Management of the West Nile Delta Site in Idku, Egypt represents the largest award in value terms secured to date by the company in Egypt. The contract will take effect in June 2021 for a term of three years with an option for BP to extend the term by a further year. It is expected that this contract will be serviced through Medserv’s internal resources and will not require major capital expenditure.

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