Daily Market Highlights (30.06.2021)

Heightened activity in MIA shares


The MSE Equity Price Index rose by 0.26% to 3,902.032 points following the gains registered in BOV and Farsons. Meanwhile, HSBC, PG and MIA all closed unchanged with overall trading activity amounting to €0.15 million. Download today’s Equity Market Summary.

Malta International Airport plc recovered from an intraday low of €6.30 (-1.6%) to close unchanged at the €6.40 level as 17,635 shares changed hands, which represented 76% of today’s total value traded. Last week, in an interview published on the local media, MIA’s CEO Mr Alan Borg explained that tourism in Malta is expected to return to pre-pandemic levels by 2023.

Similarly, HSBC Bank Malta plc closed flat at the €0.80 level across 6,278 shares after touching an intraday low of €0.79 (-1.3%).

A single trade of 1,500 shares kept PG plc rooted to the €2.26 level.

Meanwhile, Bank of Valletta plc recovered from Monday’s decline as it rebounded by 1.7% to the €0.895 level across 4,300 shares.

Simonds Farsons Cisk plc inched 0.6% higher as it regained the €8.75 level on 2,695 shares.

The RF MGS Index rebounded by 0.05% to 1,098.301 points as Eurozone yields moved lower on concerns of economic repercussions as the COVID-19 Delta variant is leaving an impact on economically sensitive sectors. Furthermore, the annual inflation rate across the Eurozone eased to 1.9% in June from the 2% recorded in May, with analysts still indicating that the figure is likely to peak above 2.5% by the end of the year. Elsewhere, in the US, home prices in April increased by 14.6%, the fastest growth rate in more than 30 years, amid shortage of residential properties, increased demand for suburban homes, and a low interest rate environment. Meanwhile, data published yesterday revealed that US consumer confidence rose for the fifth consecutive month.

Fitch Ratings issued a brief analysis on Malta after being grey-listed by the Financial Action Task Force (‘FATF’). The US-based rating agency explained that the FATF’s decision confirms structural weaknesses in Malta’s anti-money laundering framework but has no immediate on Malta’s ratings or those of its domestic rated banks. In fact, these weaknesses were already captured in the ‘A+’/Stable sovereign rating and in the assessment of the operating environment for Maltese banks at ‘BBB’ with a negative outlook. Nonetheless, Fitch ratings noted that the FATF’s decision also highlights the risk of reputational damage, which could reduce investment. Moreover, the effectiveness of the authorities’ response will be important in assessing any potential credit impact.

Today, Tumas Investments plc published an updated Financial Analysis Summary (“FAS”) which also includes the 2021 forecasts of its guarantor, Spinola Development Company Limited. The Guarantor’s revenues are expected to ease by 2.5% as the decline in revenue generated from its ‘Property Development’ division is projected to slightly outweigh the improved performances in the ‘Hotel and Ancillary Operations’ and ‘Complex Management’ segments. Meanwhile, given the sharp increase in direct costs and administrative expenses to €23.6 million (2020 €15.4 million), EBITDA levels are expected to deteriorate to €9.8 million from €18.9 million in 2020. Overall, after deducting a tax charge of €0.4 million, profit after tax is expected to amount to €0.7 million for the year ended 31 December 2021. In terms of credit metrics, the Group’s gearing ratio (calculated as total debt divided by total debt plus equity) is forecasted to increase slightly to 29.8% from 28.8% as at the end of 2020. Meanwhile, net debt to EBITDA is expected to rise to 4.4 times (2020: 1.6 times) whilst the interest cover ratio is forecasted to weaken to 4.2 times (2020: 8.2 times) which reflects the lower EBITDA generation in 2021.