HSBC rallies by 18 per cent in October

The Malta Stock Exchange (MSE) index followed on September's trend and registered a 1.67 per cent gain in October, closing at 4,541.16 points. Total turnover in the equity market in October surpassed the €6.6m mark spread across 20 equities of which eight gained ground and twelve declined.

In the banking sector, HSBC Bank Malta plc shares were undoubtedly the best performers in October as their price rose by a staggering 17.9 per cent. A total of 603,339 shares changed ownership, to close €0.29 higher at €1.91.

Meanwhile a total of 886,351 Bank of Valletta plc shares were traded for a total of value of just over €2m pushing the price up by €0.046 or two per cent, thus closing the month at €2.306. After close of business on Friday October 28, the bank announced its financial year end results as at September 30, 2016, reporting a profit before tax of €145.9m, after accounting for a one off gain resulting from the proceeds of sale of their interest in VISA Europe of €27.5m. In addition the board resolved to recommend, for approval of the AGM, the payment of a final gross dividend of €0.0852 and also a bonus share issue of one for every thirteen shares held.

Lombard Bank Malta plc shares also increased in value by €0.08 or 3.81 per cent over five transactions of 9,364 shares, closing at €2.18.

FIMBank plc share price continued on September's negative trend as it  fell by 5.38 per cent over twenty three trades of a total of 277,096 shares, closing at $0.88. In its interim directors' statement on issued mid-month, the bank reported a positive trend during the first half of the year with regards to its performance and objectives.  Cost control measures have led to positive results and the management of risk appetite has improved the quality of the assets' portfolio. The restructuring process of the existing factoring network is also underway and the company expects good quality business origination by the end of the year. In view of difficult market conditions the company has adopted a very conservative and prudent business model and approach.

Tigne Mall plc shares advanced a further 1.41 per cent when compared to September, as eleven deals of 75,323 shares were struck, closing €0.015 higher at €1.08. Late in the month, the company announced that no material events that require mention or disclosure, took place since the publication of its Interim Financial Statements. Apart from confirming that the company's financial position was positive for the first three quarters of 2016, the company has indicated that this positive trend is likely to continue in the final quarter.  This is due to the fact that the mall has remained fully let, thus maintaining the healthy cash flow and increasing profitability when compared to the corresponding period in 2015.

Malta Properties Company plc shares rallied by a significant €0.05 or 8.93 per cent over seventy transactions of a total of 492,568 shares, to close at €0.61. In an announcement early in the month, the company referred to a previous announcement regarding the potential mixed-use development incorporating the use of the company's St. George's Exchange in St. Julian's. The company announced that it entered into a tripartite Memorandum of Understanding regarding a proposed development at this site which shall consist of a mixed-use development envisaged to incorporate residential and commercial areas, including a shopping mall of at least 10,000m², as well as a car park. It is projected that the Project will be completed by 2023.

RS2 Software plc continued with the negative trend as its share price fell by 7.93 per cent over one hundred and twenty seven deals worth €1,3m. The price per share closed €0.13 lower at €1.51. Meanwhile, Loqus Holdings plc shares registered an increase of 21.32 per cent in price as four trades totalling 10,210 shares helped increase the price by €0.029 to €0.165.

GO plc shares registered a slight loss of 0.16 per cent, as twenty three deals took place resulting in an overall transfer of ownership of 58,441 shares, to close €0.005 lower at €3.215. In an announcement on Thursday October 6, the company referred to an announcement issued by Forthnet SA, in   mid-September, relating to the issue of a convertible bond loan with cash payment that entailed pre-emption rights for its existing shareholders. The board of directors resolved not to exercise GO's pre-emption rights and not to participate in the issue of the convertible bond as announced by Forthnet SA.

Malita Investments plc shares fell in value by 0.57 per cent or €0.005 to close at €0.865. A total of 118,500 shares were traded for an overall value of €101.5k. Likewise, Grand Harbour Marina plc shares fell by 0.11 per cent over two transactions of 4,000 shares, closing at €0.869.

Malta International Airport plc shares dropped 2.82 per cent as forty six trades of 72,296 shares were executed, to close at €4.14. After close of trading on October 6, the company announced its traffic results for the month of September, reporting movements exceeding half a million passengers for the third consecutive month, resulting in a 5.8 per cent gain over the same month in 2015.

International Hotel Investments plc (IHI) shares surged 3.78 per cent across thirty six deals of 103,500 shares, closing at €0.659. The company issued its Directors' Interim Statement on the last day of the month pre- trading - the directors reported that the company improved its performance in the first three quarters of 2016 when compared to the corresponding period in 2015. It was further stated that the positive outlook persists for the last quarter of the year. IHI also reported that Corinthia Hotel London improved its operational results in Sterling terms but these were impacted by the drop in the value of Sterling. On the contrary, Corinthia Hotel St. Petersburg also registered an improved performance but this was enhanced further by the favourable Rouble exchange rate.

Plaza Centres plc shares increased by 1.82 per cent as twenty trades totalling 228,635 shares were struck, to close €0.02 higher at €1.12.

GlobalCapital plc shares slumped further when compared to September as these fell by 8.16 per cent over four deals of 6,550 shares, closing at €0.45.

Mapfre Middlesea plc shares also fell in price by 4.24 per cent to close the €2.011 price level. The equity was active on eleven trades of 14,968 shares. In its interim directors' statement, the company announced that it envisages a reduction of net profit for the financial year ending December 31, 2016 due to the one time reinsurance cost saving adjustment carried in the financial statement of MSV Life plc in 2015 and a deterioration in the technical performance of the motor class. Ultimately, the company reports that its solvency position remains well above regulatory requirements.

Medserv plc shares declined by €0.05 or 3.23 per cent over thirty-seven transactions for a total of 326,593 shares, closing at €1.50. Likewise, MaltaPost plc shares fell by 1.6 per cent across 11 deals of 8,313 shares, to close at €1.85.

MIDI plc and Simonds Farsons Cisk plc both registered a slump in their share prices. MIDI plc's fall in share price has now been going on for six consecutive months. The equity fell by 6.88 per cent across ten trades of 70,685 shares in total, closing at €0.325. On the other hand, Simonds Farsons Cisk plc's share price fell by 7.66 per cent to close at €6.51. This was determined by seventeen trades for a total of 10,204 shares.

The non-trading equities last month were Santumas Shareholdings plc, 6PM Holdings plc and Pefaco International plc Investments plc. In the absence of trades, these holdings closed the month of October at €2.35, £0.8 and €2.24 respectively.

In the corporate bond market activity was spread across 49 issues of which 15 advanced, 21 declined and 13 closed unchanged. Turnover amounted to just under €5.7m. The recently issued 5% Dizz Finance plc Unsecured € 2026 and the 4.8% Mediterranean Maritime Hub Finance Unsecured plc €2026 headed the list of gainers having advanced by 2.75 per cent and 2 per cent respectively, to close at €102.75 and €102, while the 5.75% International Hotel Investments plc Unsecured € 2025 was the worst performer having declined by 3.71 per cent, to close at €104.

During the month a new corporate bond was issued, which is now at application stage. More specifically, Premier Capital plc announced the approval of a €65 million Unsecured Bond Issue, with a coupon of 3.75 per cent and maturing in 2026, issued at par.  Current bondholders of the 6.8% Premier Capital plc 2017-2020, to be redeemed on March 16, 2017, have a reserved amount of €30 million. Preference of up to €3 million is being granted to shareholders, directors or employees of Hili Ventures Limited, a further €12 million will be reserved to bondholders of Hili Properties and PTL Holdings while €20 million will be allocated to the general public.

In the sovereign debt market turnover totalled €70.8m spread across 28 issues of which 7 rallied and 21 declined. The 2.4% MGS 2041 (I) r was the most liquid issue having witnessed a turnover of €26.7m. On the other hand, the long-dated 3% MGS 2040 (I) was the best performer in October having appreciated by 2.04 per cent, to close at €121.83.

On a separate note, the Treasury announced that all applications in the recently issued 1.5% MGS 2022 (IV) Fungibility issue were accepted in full, while applications in the 2.1% MGS 2039 (I) up to and including 45,000 in nominal terms shall be met in full, while applications above 45,000 in nominal terms shall receive a minimum of 45,000 nominal per applicant plus an additional 11 per cent of the remaining unallocated balance per applicant rounded up to the nearest 100.

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. Mr. Jesmond Mizzi, Managing Director of Jesmond Mizzi Financial Advisors, is a non-executive director of Hili Ventures Limited, the parent company of Premier Capital plc.