The MSE Index rallied by 3 per cent in May having recovered from April's 0.22 per cent fall, to close at 3,878.776 points - at this level, the MSE Index is up a staggering 16.4 per cent year-to-date. A total of 19 equities were active of which six declined, 12 gained ground and one closed unchanged on a turnover worth €5.3m.
Mapfre Middlesea plc (MMS) shares were the best performers for the month, having increased by €0.18 or 14.8 per cent across 13 deals of 17,321 shares, to close at €1.40.
In its Interim Directors' Statement, MMS announced that the first quarter of 2015 saw an increase in the Group's non-life and life premium volumes and revenues. A very positive performance by the Group's investment portfolio resulted in an increase compared to the modest performance during the comparative quarter in 2014. The company also reported that it has reached a preliminary agreement with Allcare Insurance Ltd for the transfer of the insurance portfolio of Allcare Insurance Limited. The preliminary agreement is subject to all regulatory approvals from the relevant authorities.
Similarly, International Hotel Investments plc shares rallied by 14.7 per cent as 336,659 shares changed ownership, closing €0.10 higher at €0.78. This significant gain was a result of a press conference held by the Corinthia Group regarding its plans to develop a six-star hotel on the site currently occupied by the San Gorg Corinthia, the Corinthia Marina and Radisson Blu in St Julians.
In the company's Interim Directors Statement, it was stated that the IHI-owned hotels and the 50 per cent associate Corinthia London Hotel continued to perform better in the first quarter in relation to the same period in 2014, other than the hotels in Tripoli and St Petersburg where external force majeure factors continued to affect demand for accommodation.
Meanwhile, Simonds Farsons Cisk plc (SFC) shares registered their ninth consecutive monthly gain, with a €0.40 jump in its share price to close at a record high of €3.75 - the equity was negotiated across seven deals of 2,949 shares.
SFC reported that it has submitted two applications to the Malta Environment and Planning Authority (MEPA) effectively commencing the approval process for the development of the Farsons Business Park. The company further reported that over the past months, the Board has firmed up its intent to review the internal structures within the group by hiving off a number of properties and eventually 'spin-off' part of the group's property interests from the core business activities - the food and beverage business, into a separate and distinct property-focused public limited liability company. The board intends to issue a number of ordinary shares in the property company that would equate to the same number of ordinary shares in issue under SFC. A dividend in specie would then be paid out to the current shareholders, and hence each shareholder would receive an equivalent number of shares in a newly listed company. This is likely to take place in the first half of 2017.
RS2 Software plc shares advanced by a further €0.26 or 8.3 per cent across 46 trades of 98,471 shares, closing at a record high of €3.38. The Group has recently signed a new licence agreement with a bank in Vietnam and has also concluded one of the letters of intent with a UK processing company and has now advanced to the stage of contract negotiation. The company also announced that it is recommending to shareholders at the next AGM a two for one share split.
In the same industry, 6PM Holdings plc (6PM) shares declined by 2.6 per cent as eight trades of 45,415 shares were struck, closing at £0.74. In the company's interim directors' statement it was reported that during 2014, the Group continued to build on the achievements reported in 2013 and secured positive results. 6PM also reported that it is planning to undertake an acquisition of another ICT health business in the UK, which should in turn help the organisation to significantly increase its customer base, grow revenues, grow annuity business, and grow EBITDA and pre-tax profit.
In the banking sector, FIMBank plc shares shed seven per cent to close at $0.465 - the equity was negotiated across 12 trades of 105,456 shares. In the bank's Interim Directors' Statement, it was noted that liquidity and funding have been maintained at very prudent levels during the last few months. However, the Board anticipates growth of new business opportunities during the next six months. The winding down process to exit from factoring business in Russia has continued and discussions are being held to pursue various options including a sale of this business, although the costs of this exit are likely to have additional impact in 2015.
The business of India Factoring & Financial Solutions Limited, a major contributor to the Group's losses in 2014, is now much more stable and whilst new impairments were experienced in 2015, the Board believes that the core fundamentals are being enhanced in order to return the Group to sustainable profit levels within a relatively short timeframe.
Lombard Bank Malta plc shares recouped by 3.2 per cent as 11 trades of 16,919 shares were struck, closing €0.06 higher at €1.96. In the bank's Interim Directors' Statement the Directors reported that during the first four months of this financial year the Bank reported a decline in profit after tax compared to the same period in 2014. The Board is confident that the bank will provide a satisfactory half-year result within the context of the challenging environment that is currently being faced by the banking sector.
Meanwhile, HSBC Bank Malta plc shares fell by 3.3 per cent to close at €1.81 over the highest turnover for the month worth almost €1.3m. In its Interim Directors' Statement, the bank reported that for the period January 1, 2015 to May 15, 2015, economic and market conditions remained very challenging, characterised by record low interest rates with the European Central Bank launching a quantitative easing programme in January 2015. Against this backdrop, HSBC Malta delivered a profit before tax that was in line with same period in 2014. Total revenues were higher compared to the same period in 2014, despite a decrease in interest income from lending. The increase was driven by a growth in insurance and trading income and a fall in the cost of funding. Operating expenses for the period were higher compared to the same period in 2014 as a result of continued investment in risk and compliance staff and the impact of currency changes on the cost of offshored services. Loan impairments were marginally higher than the same period last year. In view of the current challenging environment, the Bank continues to maintain a cautious approach to provisions.
The Board of Directors of the bank is scheduled to meet on August 3, 2015 to approve the group's and the bank's interim accounts for the half-year ending June 30, 2015 and to consider the declaration of an interim dividend.
Bank of Valletta plc shares oscillated between a monthly low of €2.255 and a high of €2.351, to ultimately close the month 0.7 per cent lower at €2.277. The equity was active on 212 deals worth €1.17m.
Malta International Airport plc (MIA) shares were negotiated across 73 trades of 126,626 shares, closing the month 2.9 per cent lower at €3.359. The local airport operator hosted 392,676 passengers in April - a 4.2 per cent increase over April 2014. This growth is in line with the increase in aircraft movement of 4.1 per cent, which translated to a seat capacity increase over last year. April also saw growth in the seat load factor, which measures the percentage of filled seats on each flight, to 77.8 per cent - compared to 76.7 per cent during the same period last year. Most of April's growth came from traffic to and from Italy and Germany.
In its interim directors' statement MIA stated that the company has remained sound and the performance has been marginally better than expected. The outlook for the summer season looks positive. The retail sector of the business is recovering well after absorbing the effects of the absence of the Libyan traffic and the lower number of flights from Russia.
On the up side, MaltaPost plc shares registered a fourth consecutive monthly gain, having appreciated by €0.079 or 5.6 per cent across 14 trades of 25,874 shares, closing at a record high of €1.50. The company registered a profit before tax of €2.5m for the six month period ended March 31, 2015, compared to €1.2m registered in 2014. Revenue for the period under review amounted to €13.3m, an increase of 13.8 per cent from 2014. Meanwhile, earnings per share increased to €0.05. This positive trend in profitability is expected to taper off in the coming months due to a number of seasonal factors and the one-off write-backs of previously accrued expenses.
GO plc shares climbed by €0.219 or 7.7 per cent as 317,121 shares changed hands, to close at €3.059. The Board of Directors of the company announced that it has been exploring options that would maximise value for its shareholders in relation to the portfolio of immovable property owned by its subsidiary Malta Properties Limited and its subsidiary companies. The portfolio consists of 11 immovable properties valued at approximately €50m.
Plaza Centres plc shares more than erased April's 0.5 per cent loss, having gained 3.7 per cent over 10 transactions of 128,172 shares, to close €0.035 higher at €0.98. In its Interim Directors' Statement the company announced that occupancy during Q1 of 2015, increased by eight per cent compared to the same period in 2014. Revenue and EBIDTA also increased. The Directors anticipate maintaining relatively high occupancy levels throughout the year.
Meanwhile, Tigne Mall plc shares closed the month unchanged at €0.80 as 13 deals of 77,500 shares were executed. On a positive note, MIDI plc shares gained a further 7.1 per cent as ten trades of 274,277 shares were struck, to close at €0.30.
Malita Investments plc shares edged €0.05 or 5.5 per cent higher across 33 transactions of 256,180 shares, closing at €0.96. Likewise, Medserv plc shares rose by 5.9 per cent over 30 deals of 99,505 shares, to close at €2.15.
Santumas Shareholdings plc shares closed the month at their monthly high of €2.05 as six deals of 16,840 shares were struck.
Grand Harbour Marina plc shares registered a marginal 0.5 per cent decline on two deals of 2,709 shares, closing at €1.89. In the company's Interim Directors' Statement the company reported better revenues for the Group during the first quarter of the year, with improvements at both Grand Harbour Marina in Malta and at IC Cesme Marina in Turkey - in which the Group holds a 45 per cent beneficial interest through a joint venture with the IC Cecen Group. In Q1 of 2015, the Group achieved revenue of €1.14m an increase of 12 per cent over the same period in 2014. The Group registered a loss before tax of €0.15m, compared to a loss before tax of €0.11m last year.
In the corporate bond market turnover amounted to €4.9m spread across 40 issues of which 30 issues gained ground, six fell in value and four closed unchanged. The recently issued 5.75% International Hotel Investments plc Unsecured € 2025 headed the list of gainers having increased by 9.5 per cent, to close at €109.50.
During the month of May, Izola Bank plc announced the issue €12m in bonds redeemable in 2025. The net proceeds from the new bonds will be used by the issuer for the purpose of purchasing the €9m 5.35% Izola Bank plc Secured Notes due on June 30, 2015 from existing noteholders for cancellation and to meet part of its general funding requirements. The issuer will be granting holders of the maturing notes preference to subscribe to the new bonds by surrendering their respective holding in the maturing bonds.
In the sovereign debt market turnover totalled €120.5m. A total of 29 issues were active all of which registered a decline. The 3% MGS 2040 (I) r registered the worst decline of 2.8 per cent, to close at €113.02. The long-dated issue was most liquid, having witnessed a turnover of €11m.
In the last week of the month, the Treasury announced the issuance of two new Malta Government Stocks (MGSs); 2% MGS 2020 (V) F.I. and 2.3% MGS 2029 (I). Applications shall open on June 11, 2015 and will be by auction only. The applications will close on June 12, 2015, or earlier at the discretion of the Accountant General.
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]