The Malta Independent 22 February 2020, Saturday

Monthly Round up Report for July 2019: MSE Index closes July 0.731% higher

Thursday, 8 August 2019, 14:49 Last update: about 8 months ago

The MSE Equity Total Return Index added to June's 0.137 per cent gain, having increased by 0.731 per cent, to close at 9,853.225 points. Activity was spread across 24 equities, of which 10 fell, nine gained ground and five closed unchanged - reaching a turnover of €9.7 million

Bank of Valletta plc (BOV) shares succumbed to selling pressure, having decreased by €0.095 or eight per cent, over the highest turnover of 2.3 million shares worth €2.6 million, to close at €1.10.

During the meeting held on July 31, 2019 the Board of BOV approved the Group's Interim Financial Statements for the first half of 2019, showing a profit before tax of €54.3 million. During the comparative period in 2018, the group registered a profit before tax of €13.5 million, which included a litigation loss provision of €75 million.

An interim operating profit of €45.06 million was recorded in 2019, compared to €84.15 million for the same period last year. This was mainly the result of higher recurrent costs amounting to €81 million - an increase of over 27 per cent overall the comparative period and an impairment charge, compared to substantial reversals of impairment reported last year of €20.2 million.

Net Interest income is marginally lower than the previous year at €77.6 million, accounting for more than 60% of operating revenue. Meanwhile, net commissions and trading profits amount to €49.9 million, €1 million higher than 2018.

The bank stated that the €50 million Subordinated 3.75% bond the bank recently issued, was successfully part of the capital plan focusing on strengthening Tier 2 capital and MREL requirements. The capital plan also focuses on the strengthening of the Tier 1 capital, via a financial instrument which will be eligible as Additional Tier 1 later on this year. In the meantime, Capital ratios remain strong, with a CET1 Ratio of 19.1%, compared to 18.3% last December.

The Board stated that following supervisory guidance, has resolved not to declare an interim dividend while the recommendation for a final cash dividend will be revisited at the end of the financial year in line with developments in the second half of the year.

Moreover, the bank announced that Raiffeisen Bank International had recently opened accounts denominated in US dollars. This enabled the bank to achieve its short term objective - putting into place the necessary mechanism to enable it to offer full USD services. The longer term objective is that the bank will have access to a wider network of USD correspondents.

At the end of the month, the international rating agency Standard & Poor's lowered the bank's rating from BBB with a negative outlook to BBB- with a stable outlook. The agency highlighted that such downgrade comes on the back of regulatory observations it has made, the cyber-attack and the doubts this shed on the bank's robustness of its operational risk management, together with the various litigation cases.  The bank's short-term rating was also revised from A-2 to A-3.

HSBC Bank Malta plc shares oscillated between a monthly high of €1.61 and a low of €1.51, to ultimately close at €1.52. The banking equity witnessed 62 trades of 164,816 shares, and registered a 5.6% loss in July, in anticipation of the financial results announcement.

FIMBank plc was the only gainer from the banking sector, having advanced by 10.2%, as 141,609 shares changed ownership across 11 transactions, closing $0.06 higher at $0.65. The trade finance bank announced that its board shall be meeting on August 8, 2019, in order to consider and approve the interim financial statements for the first half of 2019, as well as to consider the payment of an interim dividend.

Lombard Bank Malta plc shares closed unchanged at €2.30, despite having reached a monthly low of €2.20. The equity was active on 13 deals of 21,811 shares.

Malta International Airport plc (MIA) shares appreciated by €0.75 or 10.7 per cent, as 201,492 shares changed hands over 126 transactions, closing the month at €7.75. MIA published the traffic results for the first six months of 2019, showing a 5.9 per cent increase in passenger movements over the corresponding period last year. The figure of 3.2 million passengers over the first half, is in line with the company's forecast of 7.2 million passenger movements to be expected by the end of the year. April was the fastest growing month, with a 10.5% increase in passenger movements, closely followed by June. Each month however, has successfully set a new record in terms of passenger numbers.

According to the Airport Industry Connectivity Report 2019, published by the Airports Council International, MIA has managed to double its connectivity between 2009 and 2019, putting it in the lead among a group of 26 airports in the European Union.

The group's interim financial statements for the six months ended June 30, 2019 were approved on July 25, 2019. The results show an increase in revenue of over 9 per cent to €44.6 million, which reflects the growth in passenger movements as well as an increase in non-aviation revenue.  The company registered a profit before tax for the first half of 2019 of €21.7 million, compared to €20.2 million in the corresponding period last year. The Directors also approved a net interim dividend of €0.03 per share, for payment on all shares settled as at August 21, 2019 and payable by no later than September 13.

Mapfre Middlesea plc shares fully recouped the previous month's 9.9 per cent loss, having advanced by 10 per cent over 23 deals of 33,353 shares, to close €0.20 higher at €2.20. The MAPFRE Middlesea Group registered a profit before tax of €9.83 million for the financial half year ended June 30, 2019, compared to €9.02 million registered during the comparative period last year.  The profit after tax and minority interests, allocated to shareholders, amounted to €4.31 million as compared to €3.77 million in 2018.  The increase in profit was derived from improved non-life business results with the long-term business result marginally lower when compared to the previous year.

MAPFRE Middlesea plc's non-life business has registered a marked improvement in technical results compared to the previous year, both in premium written and combined ratios.  Results remain however susceptible to the volatility caused by large event or risk losses which materially impact such results.

MAPFRE MSV Life plc continues to have stable results reflecting the annual management charge on assets under management which provides stability to the results, shielding them from the impact of fluctuations in the financial markets.  The unrealised capital losses incurred last year have been recovered with rallying markets leading to strong investments yield being attained during the first half year.

In the same sector, GlobalCapital plc shares fell by 5.3%, as two deals of 600 shares were negotiated, to close at €0.25.

The telecommunications services provider GO plc, registered a 0.4% decrease in its share price, as 192,709 shares changed ownership over 72 trades, closing at €4.56. The Board of GO is scheduled to meet on August 9, 2019 to discuss the Group Interim Unaudited Financial Statements for the six-month period ended June 30, 2019.

The company's spin-off BMIT Technologies plc's (BMIT) share price closed unchanged at €0.535, as 885,789 shares were executed across 73 transactions. BMIT issued a circular to shareholders in connection with the resolution which shall be voted on at the Extraordinary General Meeting, held on August 6, 2019. The resolution relates to the promise of sale agreement which was announced back in May, in which BMIT has bound itself to purchase and acquire a property which houses a significant part of the BMIT Group's data centre facility in Handaq, Qormi. The agreement is subject to certain terms and conditions, including approval at the upcoming Extraordinary General Meeting. If approved, the purchase shall be made against a consideration of €4 million.

The Board of BMIT is scheduled to meet on August 8, 2019 to discuss the Group Interim Unaudited Financial Statements for the six-month period ended June 30, 2019.

Meanwhile, Malta Properties Company plc registered a gain in its share price for the fourth consecutive month, having increased by 0.8 per cent over 37 trades of 492,846 shares, closing at €0.665. The company's Board will meet on August 12, 2019 to discuss the Group Interim Unaudited Financial Statements for the first half of 2019.

In the same sector, MIDI plc shares advanced by 5.5 per cent across 41 deals of 489,050 shares, to close at €0.675.

Malita Investments plc shares partially erased June's 7.3 per cent gain, having declined by 2.8 per cent, as 17 transactions of 84,821 shares were negotiated, to close at €0.855. Meanwhile, Trident Estates plc shares closed unchanged at €1.92, despite having reached a monthly high of €1.98 and a low of €1.91. The property management company was active on 21 deals of 61,853 shares.

Simonds Farsons Cisk plc shares reached a monthly high of €10.40, but closed unchanged at €10. The food and beverage supplier's shares were active on 23 transactions of 21,559 shares.

RS2 Software plc shares rallied by 21.2 per cent, as 960,565 shares changed ownership across 224 deals, to close €0.33 higher at €1.89.

Loqus Holdings plc shares increased by €0.044 or 109.9 per cent over four trades of 30,000 shares, closing at €0.085.

The oil and gas logistics services provider Medserv plc, registered 0.9 per cent advance in its share price, as nine transactions of 25,369 shares were executed, to close at €1.16. The company announced that it has been awarded a contract by Total E&P Cyprus to provide Shore Base Logistics services for drilling activities offshore Cyprus. The contract is valid for one year with options to extend. The company shall be providing these services from the port of Limassol.

The board of Medserv shall meet on August 30, 2019, in order to consider, and if thought fit, approve the unaudited half-yearly report for the first six months of 2019.

Tigne' Mall plc shares fell by 4.9 per cent across 23 deals of 169,461 shares, to close €0.045 lower at €0.88. The Board of is scheduled to meet on August 30, 2019 to consider and approve the condensed interim financial statements for the half-year ended June 30, 2019; and consider the declaration of an interim dividend.

Main Street Complex plc shares slipped by 3.9 per cent over four trades of 78,000 shares, closing at €0.61. Meanwhile, Plaza Centres plc shares closed unchanged at €1, as 20 transactions of 187,596 shares were concluded. During the company's Board meeting held on July 31, 2019, the company's interim financial statements for the six months ended June 30, 2019 were approved. Revenue stood at €1.7 million, translating to an increase of 9.98% when compared to the same period last year. One factor for this positive performance was an increase in occupancy levels from 87% to 91%. This surge in revenue translated to a 13.43% increase in EBITDA, to just over €1.4 million. A profit before tax figure of €944,522 was registered, 27.5% higher than the €740,823 registered during the corresponding period last year.  The Board did not recommend the payment of an interim dividend.

The retail and supermarkets owner PG plc registered a minimal 0.6 per cent decline in its share price. The equity witnessed 37 deals of 201,600 shares, to close July at €1.61.

International Hotel Investments plc shares erased June's 4.9 per cent gain, having declined by 8.1 per cent, as 28 trades of 338,208 shares were executed, closing at €0.79.

MaltaPost plc shares fell by €0.19 or 12.8 per cent across 10 transactions of 31,230 shares, to close at €1.30.

Santumas Shareholdings plc shares advanced by 13.1 per cent over eight deals of 30,754 shares, closing €0.19 higher at €1.64.

In the corporate bond market, 63 issues were active, of which 25 gained ground, 30 fell and eight closed unchanged, amounting to a turnover of €7.6 million. The 6% AX Investments plc € 2024 was the worst performer, having declined by 6.8 per cent, to close at €110. Meanwhile, the 6% Corinthia Finance plc € 2019-2022 and the 5% GlobalCapital plc Unsecured € 2021 both headed the list of gainers, having increased by 2.3 per cent, closing at €102.50 and €100.25 respectively.

In the sovereign debt market, short-dated issues fell, while medium and long-term issues advanced. Turnover totalled to €39.1 million spread across 27 issues, of which 21 increased and seven fell.  The 5% MGS 2021 (I) was the most liquid issue, having witnessed a turnover of €7.2 million, closing 0.01 per cent higher at €111.20. The 2.4% MGS 2041 (I) headed the list of gainers, having appreciated by 8.4 per cent, closing the month at €123.89. Meanwhile, the 6.6% MGS 2019 was the worst performer, having declined by 1.3%, to close at €100.57.

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]


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