MSE Index rallies by 3.1%

The Malta Stock Exchange (MSE) index gained a solid 3.08 per cent in November, closing at 4,473.189 points. Activity was spread across 20 equities of which 14 gained ground, five fell and one closed unchanged as turnover totalled €9.28m.

The newly listed equity, Malta Properties Company plc (MPC), rallied by an impressive 103.1 per cent on their first trading days. The equity opened at €0.46 and reached a monthly high of €0.799, to ultimately end the month at €0.65 - witnessing a significant turnover worth €1.3m. The nominal price of the shares was of €0.32 and the value attributed to the dividend in kind distributed by GO plc (GO) was of €0.3313.

On the other hand, GO shares declined by €0.30 or 9.1 per cent as 73 deals of 256,481 shares were struck, closing at €3.00. The company announced that its fully-owned subsidiary, GO Data Centre Services Limited, has entered into a preliminary agreement to purchase 51% of the issued share capital of Kinetix IT Solutions Limited, subject to regulatory approval.

In the banking sector, FIMBank plc shares headed the list of gainers having appreciated by 30.2 per cent as 68 trades of 995,377 shares were negotiated, to close $0.13 higher at $0.56. In its interim directors' statement the company announced that during the third quarter, the bank continued its consolidation strategy and has adopted a prudent and practical risk approach to maintain a robust transactional structuring. Diversification in funding and a new core factoring strategy are being adopted as the company aims for sustainable profitability and growth, thus providing means to react to any changes in the financial markets. The group reported a positive net income for the third quarter and is now focusing on solid growth of its core operating businesses across the four lines: Banking, Forfaiting, Factoring and Treasury.

Conversely, Bank of Valletta plc shares oscillated between a monthly high of €2.45 and a low of €2.25, to then close at €2.31. The equity was negotiated over the highest turnover for the month of €2.4m. The bank's Annual General Meeting (AGM) will be held on December 17, 2015 at which, the bank's audited financial statements as at September 30, 2015 will be presented for approval of the shareholders together with the proposed gross final dividend payment of €0.085 per share. Also for approval of the shareholders will be the proposed bonus issue of one bonus share for every 12 shares held to be allotted to members on the company's register as at January 15, 2016.

HSBC Bank Malta plc shares eased 0.6 per cent as 346,277 shares changed ownership, to close at €1.79. In its interim directors' statement, the bank reported a modest decline in profit before tax compared with the same period in 2014 primarily attributable to higher costs and a lower contribution from the life insurance business. Customer deposits continued to increase and the bank maintains a strong liquidity and capital position. The bank stated that despite the challenging operating environment, it is focusing on improving its productivity and cost effectiveness. As part of this process, the bank has approved a plan to deliver sustainable cost savings mainly through an early retirement scheme for employees, the cost of which will depend on the number of applications received. This programme will reduce profitability in the current financial year but will support an increased level of profitability in future years.

Lombard Bank Malta plc shares registered an increase for the fifth consecutive month, having advanced by a further 4.4 per cent across 30 transactions of 150,317 shares, closing at its monthly high of €2.35. In its interim directors' statement the bank announced that the bank continued to experience pressure on its after-tax profits during the first three quarters of 2015. Core business remained healthy with some areas showing noticeable improvement. The Bank's Liquidity and Capital Ratios remained well in excess of regulatory thresholds during the period while its subsidiary MaltaPost plc (MaltaPost) reported an improved performance.

MaltaPost shares advanced by 9.3 per cent as seven deals of 6,801 shares were struck, to close at an all-time high of €1.99. Meanwhile, Mapfre Middlesea plc shares closed the month unchanged at €2.12. The equity was active on 24 deals of 40,596 shares.

Elsewhere, Simonds Farsons Cisk plc shares rallied by a further €0.37 or 6.2 per cent as 66,542 shares changed hands, closing at yet another record high of €6.37.

Similarly, RS2 Software plc shares flirted with an all-time high of €3.10, however they closed the month slightly lower at €3.095. The I.T. equity was active across 148 trades of 393,152 shares. In its interim directors' statement, the company outlined that demand for the Group's services continue to be significant as the Group increases its implementation and service offering to its clients in Europe, Latin America and Asia Pacific. Higher interest is evident from other regions such as the Middle East and Africa. The Group holds a positive outlook for the year with potential business in the pipeline.

6PM Holdings plc shares edged 4.6 per cent higher over 12 deals of 34,561 shares, to close at £0.68. The company announced that by virtue of an agreement dated October 9, 2015 it has transferred 14,000 Ordinary A shares and 6,000 Ordinary "B" shares it holds in Agilis6 Limited and which amount to the total issued share capital of Agilis6 Limited. This transfer is in line with the objectives of the company to focus principally on the health industry.

Malta International Airport plc (MIA) shares soared by €0.14 or 3.6 per cent as 100 deals of 179,176 shares were struck, closing at €4. The local airport operator announced that traffic results for the month of October witnessed the greatest monthly increase for the year - up by 10.2 per cent over October 2014. MIA reported a rise in passenger numbers from all of the airport's top performing countries with the exception of Germany, and with the UK and Italy as its top two destinations. Cargo and mail also increased by 3.6 per cent on the month.

Furthermore, in its interim directors' statement, the company announced that during the period under review its financial position has remained sound with a seven per cent increase in passenger movements from January to October 2015 over last year. Traffic for the rest of 2015 is expected to be similar or slightly higher than 2014 with forecasts in passenger movements exceeding 4.5m.

Medserv plc shares were active on 63 deals of 138,426 shares, closing the month 21.1 per cent higher at €2.12. The equity's price was adjusted to reflect the bonus issue of four shares for every five already held. The company has declared an interim dividend of €0.08 per share - amounting to €4m- which will be paid to all shareholders on the company's register as at close of business on October 30, 2015. Meanwhile, in its interim directors' statement the company announced that the second half of the year has seen a continued expansion of business across the whole spectrum of operations as results for the third quarter of the year have exceeded budget.

International Hotel Investments plc shares registered an increase of 8.5 per cent as 52 deals of 221,318 shares were negotiated, closing €0.066 higher at €0.846. Similarly, Pefaco International plc shares closed the month 2.3 per cent higher as a sole transaction of a mere 100 shares was struck, to close at €2.24.

Tigne' Mall plc shares declined by 1.1 per cent across 18 deals of 149,000 shares, to close at €0.94. In its interim directors' statement, the Company announced that positive trends outlined in the condensed interim financial statements have continued throughout the third quarter, with healthy cash flows from operations and full occupancy of the mall; adding two new outlets to its brand mix, namely Calvin Klein Jeans and Boux Avenue. Moreover, profitability is up when compared to the corresponding period of the previous year and going forward, expectations remain positive.

In the same sector, Plaza Centres plc shares fell by two per cent over seven trades of 132,550 shares, closing at €0.97. Conversely, MIDI plc shares advanced by 4.3 per cent over 18 transactions of 161,230 shares, closing at €0.365. In its interim directors' statement, the company reported that it entered into definitive deeds of transfer pertaining to Q1 apartments - profits from these sales will be registered in the company's 2015 financial statements which according to the company's projections should result in the company registering a profit for the 2015 financial year.

Grand Harbour Marina plc (GHM) shares gained €0.04 or four per cent as five deals of 20,976 shares were concluded, to close at €1.04. In its interim directors' statement, GHM reported improved revenues for the Group during the first nine months of the year with growth in both Grand Harbour Marina in Malta and in IC Cesme Marina, Turkey, in which the Group holds a 45% beneficial interest. For the period under review, the Group registered revenues of €4.63 million, an increase of 6% over the corresponding period in 2014 and a profit before tax amounting to €0.55m.

Malita Investments plc shares edged 3.3 per cent higher over 22 trades of 153,582 shares, closing at €0.95. In its interim directors' statement, the company announced that the performance of the company was within that projected for the period January 1 to date and subject to any unforeseen circumstances, the Directors expect the Company's financial performance for the financial year ending December 31 2015 to be within the company's projections.

In its interim directors' statement, GlobalCapital plc announced that the company's transformation strategy aimed at generating revenue growth, reducing operational costs and ensuring long-term financial stability is generating the desired result for the Group. The business registered by the Company's life insurance subsidiary registered growth during the first nine months of 2015 when compared to the same period in 2014. The investment company registered a decrease in its fees, which was more than offset by the reduction in the company's cost base. The equity was not active this month.

On the corporate bond front, out of the 40 active issues, gainers and fallers tallied at 16 while eight stood unchanged. Recording the best performance for the month was the 7% MIDI plc GBP 2016-2018 issue, with a 4.2 per cent gain, to close at €110, as a single deal of 7,000 nominal was traded. Meanwhile, the 6% Island Hotels Group Holdings plc € 2024 issue fell by 3.5 per cent on the month to €109, as 64,000 nominal changed hands across 13 trades. The 4.5% Hili Properties plc Unsecured € 2025 recorded a turnover worth €1.6m - representing 43.4 per cent of a total turnover of €3.6m.

 BOV has issued €75m Subordinated Notes maturing in 2030. The notes are subordinated and unsecured. The bond offers a coupon of 3.5% per annum and will be issued at a price of €100 per bond. This issue is split into two series - Series 1/2015 has a minimum application amount of €25,000 while Series 2/2015 is subject to a minimum application of €5,000. Out of the €75m on offer, up to €40m is reserved for preferred applicants being BOV shareholders on the register of members as at October 21, 2015 as well as the directors and staff of the Issuer. The closing date for subscription in this bond is tomorrow.

In the sovereign debt market, 27 issues were active, of which most of the long dated issues moved up while short dated issues declined as maturity nears. The 2.3% MGS 2029 (II) FI Oct 15 I issue recorded the highest liquidity with a turnover of €10.6m, having closed the month 1.7 per cent higher at €107.20. On the other hand, the 3.3% MGS 2024 (I) issue inched 0.8 per cent lower to close the month at €116.52, on a single trade of 20,000 nominal. Total trading value amounted to €27.8m

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]