The Malta Stock Exchange (MSE) Index registered a 0.86 per cent decline in October, closing the month at 3,304.642 points. Activity was spread across 20 equities of which 11 gained ground, seven fell in value and two closed unchanged. Loqus Holdings plc (Loqus) shares managed to lock the highest gain while International Hotel Investments plc (IHI) headed the list of fallers.
During the month, Bank of Valletta plc (BOV) and HSBC Bank Malta plc (HSBC), reported the final results of the EU-wide asset quality review (AQR) and stress tests executed. Both banks managed to pass the comprehensive assessment carried out by the European Central Bank (ECB) - a year-long audit exercise on 130 banks in the euro area which have been considered as significant credit institutions.
Bank of Valletta plc shares were the most active throughout the month as they witnessed a turnover value of over €1.2 million. The banking equity oscillated between a monthly high of €2.27 and a monthly low of €2.19, to ultimately close unchanged at €2.23. The Board of Directors of the bank approved changes to the bank's senior management organisational structure to ensure a more focused corporate governance structure as well as efficiency in dealing with challenges that the bank may face in the coming decade. Furthermore, the Board approved the audited financial statements for the financial year ended September 30, 2014 for the approval of the shareholders at the forthcoming Annual General Meeting (AGM) scheduled on December 17, 2014. The bank reported a profit before tax of €104.1m compared to €115.8m in 2013 representing a decrease of 10 per cent.
The Board resolved to recommend the payment of a final gross dividend of €0.0925 per share, which would make for a total gross dividend for the year of €0.135 per share. If approved, the final dividend will be paid on December 18, 2014 to the shareholders on the bank's register as at close of business November 17, 2014. Moreover, the Board recommended a bonus issue of one share for every 11 shares held, which will be allotted to shareholders on the bank's share register as at close of business on January 16, 2015. The bonus issue will be funded by a capitalisation of reserves of €30 million.
HSBC shares were also quite volatile as they varied between a monthly high of €2.04 and a low of €1.92, adding 0.8 per cent to its former declines by closing at €1.97. The equity was active across 121 deals of 446,243 shares. Meanwhile, FIMBank plc shares dipped 4.6 per cent lower as 11 trades of 77,035 shares were struck, to close at $0.63. Conversely, Lombard Bank Malta plc was the only banking equity to register a gain in its share price as it advanced by €0.051 or three per cent on 24 trades of 152,558 shares, closing at €1.75.
GO plc shares added on to their recent winning streak by registering a 1.5 per cent gain over 70 transactions of 145,361 shares. However, the telecommunications provider failed to maintain its monthly high of €2.70, as it closed the month at €2.64. On a similar note, Simonds Farsons Cisk plc shares rallied by a further 9.1 per cent as five deals of 16,062 shares were concluded, to close at €3.01 just shy of its all time high of €3.011.
Middlesea Insurance plc (Middlesea) shares climbed by 5.7 per cent as 12 trades of 20,685 shares were struck, closing €0.054 higher at €0.994. During the month, the company released its interim directors' statement for the third quarter of 2014. The results reflected positive sale trends and strong performance that was previously reported in the interim half year review of results issued earlier this year. These results continue to strengthen the solvency position of Middlesea, which remains well above the regulatory requirement. Technical results of the holding company remain satisfactory in spite of inherent risks and market competition. Financial markets delivered positive returns and hence satisfactory return yields on the Group's investment portfolios, particularly MSV Life plc, were reached.
Malta International Airport plc (MIA) were negotiated over 45 trades of 246,499 shares, closing 0.8 per lower at €2.33. The company reported a 2.4 per cent increase in traffic in September as the local airport operator hosted 463,215 passengers despite the closure of the Libyan airspace since mid-July, which has resulted in a passenger drop within this market. In September, landings and take-offs at the airport increased by 0.9 per cent to 3,199, while the number of people that could be flown to and from Malta (seat capacity) grew by 1.1 per cent to 540,423. The largest market growth was registered by France as it grew by 11.1 per cent as a result of increased demand on the Paris route. Traffic from Italy and UK also grew while Spain and Germany both saw a decrease. Between January and September, MIA saw an increase of 7.2 per cent when compared to 2013 figures.
A single transaction of 3,139 Loqus shares led to a 9.5 per cent increase in the equity's share price - closing at €0.115. The group registered a loss for the year of €247,225, compared to a €577,308 loss in 2013. Revenue for the period under review amounted to just over €3.5 million, an increase of 3.8 per cent from 2013.
In the IT sector, RS2 Software plc shares edged 0.2 per cent high as 13 trades of 82,704 shares were executed, closing at €2.94. Conversely, Crimsonwing plc shares dipped by 1.4 per cent over two transactions of 1,118 shares, to close at €0.789. Meanwhile, 6PM Holdings plc shares traded flat at £0.72 across 12 deals of 85,417 shares.
Plaza Centres plc shares declined by a minimal 0.8 per cent over 12 trades of 102,220 shares, closing at €0.61. The Directors of the company reported that they expect the company's financial results for 2014 to be in line with the projections approved at the beginning of the year. The company received a MEPA permit to refurbish its facades - the refurbishment is currently being carried out and is expected to be completed before the Christmas period. Meanwhile, Tigne Mall plc shares strengthened by one per cent as 91,240 shares changed hands over 10 transactions, to close at €0.53.
From the hoteliers sector, International Hotel Investments plc shares succumbed to ongoing selling pressure as they stumbled by a further €0.06 or 10 per cent as 15 deals of 76,171 shares were processed, closing at €0.54. Conversely, Island Hotels Group Holdings plc shares advanced by €0.03 as 8,000 shares changed ownership, to close 3.7 per cent higher at €0.85.
MaltaPost plc shares appreciated by a significant 4.5 per cent across 16 deals of 41,907 shares, closing €0.05 higher at €1.17 and even reaching an all-time high of €1.20 intra-month.
The other positive performers for the month were Medserv plc and Malita Investments plc as their share price increased by 4.3 per cent and 3.6 per cent respectively. The former was negotiated across 37 deals of 317,800 shares, to close at €1.33, while the latter witnessed 12 trades of 163,100 shares, closing at €0.58. On the contrary, MIDI plc shares declined by a further 4.4 per cent on five trades of 144,000 shares, to close at €0.22.
In the corporate bond market two new issues were offered to the public in October. United Finance p.l.c. issued a new €8.5m bond maturing in 2023 with an interest coupon of 5.3%, while Hal Mann Vella Group plc offered a €30m secured bond at par, with a 5 per cent coupon maturing on November 6, 2024.
Furthermore, Premier Capital plc (Premier) reported that it has been notified by its ultimate shareholder, Hili Ventures Limited, that PTL Holdings plc - a member of the Hili Ventures Group and sister company of Premier - has submitted an application to the listing authority of the MFSA to authorise the admissibility of a new bond issue. Holders of the 6.8% Premier Capital plc bonds 2014-2020 appearing on the bond register at the central securities depository as at November 3, 2014 will be given preference over the general public to subscribe to the new bonds up to an aggregate of €5 million, subject to regulatory approval.
Total turnover in the corporate bond market amounted to over €4.5 million - spread over 39 issues, of which 13 declined, 23 rose and three closed unchanged. The 5.6% GlobalCapital plc € 2014/16 was the top performing bond as it rallied by 5.3 per cent - to close at par, while the 7.5% Mediterranean Investments Holding plc EUR 2012-2014 registered the worst decline - closing two per cent lower at €98.
In the sovereign debt market, 29 issues were active of which 13 slipped, 14 climbed and two closed unchanged. In this market 1,632 deals worth €65m were executed as long-dated issues continued to outperform short-term ones. The 4.65% MGS 2032 (I) locked in the best performance as it strengthened by 1.8 per cent - to close at €118.28. Meanwhile, the 4.3% MGS 2022 (II) was the most liquid issue as it witnessed a turnover worth €11.2m.
This article, which was compiled by Jesmond Mizzi, Managing Director of Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors at 67 Level 3, South Street, Valletta, or on Tel: 21224410, or email [email protected]