The MSE Equity Total Return Index registered a 1.159 per cent decline for the first month of 2020, with HSBC Bank Malta plc (HSBC) being the main loser, having stumbled by 19.2 per cent. Total turnover for the month amounted to €6.5 million and was spread across 23 equities, of which nine gained ground and eight fell. The index closed at 9,504.238 points.
HSBC shares were active on 105 deals of 464,302 shares, registering a €0.25 decline, to close at €1.05. The board of the bank is scheduled to meet on February 18, 2019, to approve its final audited accounts for the financial year ended December 31, 2019. Moreover, the board shall also consider the declaration of a final dividend, which is to be recommended during the bank's AGM, to be held on April 8, 2020.
HSBC announced that on January 15, 2020, it entered into a promise of sale agreement with Malta Properties Company plc (MPC), to sell a building complex in Swatar, including the parking area adjacent to this building complex as well as the overlying airspace and sub-terrain of the property as freehold. Such sale's purpose is the disposal of a non-core property asset, which is not part of the bank's normal business. This shall generate an immaterial profit as this responsibility is transferred to a third party, lower volatility in earnings associated with revaluations, and the complexity of related-party obligations shall be reduced.
The property is being sold subject to a lease agreement in place in favour of HSBC Global Services (UK) Limited. Moreover, HSBC shall guarantee in favour of MPC that the property is free from any burdens or any other rights in favour of any third party given that MPC shall have the right to not appear on the deed without any liability. MPC shall be entitled to an immediate refund of the deposit should it appear that the property acquired is burdened. It shall also be entitled to a refund should MPC not obtain an acquisition of immovable property, should the due diligence exercise being undertaken turn out not to be satisfactory, or should MPC fail to obtain, within five days from the agreement date, a sanction letter in terms of bank financing to fund the purchase of the property. In addition, HSBC Global Services (UK) Limited has undertaken to carry out refurbishment works to the property for an amount of not less than €1 million.
The property's sale and acquisition is €8.05 million, of which €0.805 million are payable as per price terms and conditions set out in the agreement, and the remaining €7.245 million shall be paid by the purchaser on the deed on account of the price.
HSBC and MPC have also agreed that the deposit is a payment made on account of the price and not the earnest. Should MPC terminate agreement with a reason valid at law, MPC shall have the right to the immediate refund of the deposit. Moreover, if MPC fails to appear for the publication of the deed, for no valid reason at law, HSBC shall have the option to proceed against MPC or decide to request/retain the payment of deposit in its favour by way of pre-liquidated damages.
This agreement will remain valid and effective for five months from the agreement date, provided that an automatic three-month extension for the agreement will be given should the AIP permit application process still be ongoing. Once the deed reaches publication, the property will form part of MPC's property portfolio, whereby MPC will receive the lease payments made in terms of the lease agreement.
MPC's shares were negotiated across 25 transactions of 146,418 shares and closed four per cent higher at €0.655.
The telecommunications services provider GO plc, recorded a €0.12 or 2.8 per cent loss in its share price, as 46,482 shares changed ownership across 29 trades, closing at €4.14.
GO's spin-off BMIT Technologies plc's (BMIT) shares closed unchanged at €0.52, as 30 deals of 307,730 shares were concluded. BMIT announced that the final deed of sale and purchase of the property in Tal-Handaq, which houses the group's largest data centre, was executed on January 17, 2020. A substantial part of the company's operations can now be carried on from its own property. This shall minimise the risks involved with migration to another facility since there is no need for relocation of any customers allocated to the data centre operating from the property. This implies less expenses with respect to rental of premises.
Bank of Valletta plc shares increased by 1.9 per cent, over 153 trades of 570,477 shares, closing at €1.08. Meanwhile, Lombard Bank Malta plc shares declined by 4.4 per cent across six transactions of 7,264 shares, to close €0.10 lower at €2.18.
The trade finance bank FIMBank plc¸ registered no change in its share price of $0.60, despite having traded at a monthly high of $0.63 and a low of $0.59. The equity was executed across 11 deals of 124,154 shares.
Malta International Airport plc (MIA) shares closed unchanged at €6.90. The equity was active on 93 transactions of 86,961 shares. The year 2019 marked the tenth year of traffic growth for the airport. The airport ended 2019 with a record of 7,310,289 passenger movements, equivalent to a 7.4 per cent increase when compared to 2018. Such rise was in line with a 7.3 per cent increase in seat capacity. Seat load factor remained unchanged from 2018, as it stood at 81.8 per cent.
One of the main drivers for this positive performance was the improvement in flight schedules, for both winter and summer months. During 2019, MIA welcomed a new airline, inaugurated 18 new routes spanning three continents, and introduced other developments with the intention of further enhancing the islands' connectivity, particularly in the off-peak months.
During the peak summer months, a 7.6 per cent increase in passenger movements was recorded while a 7.2 per cent increase was recorded for the winter months. The fastest-growing months for the year were December, April, June and October, with three of these top performers being winter and shoulder months. Meanwhile, August was the main driver for the full year traffic as it registered more than 823,000 passenger movements.
The top drivers of traffic for the year were Spain, France, Germany, Italy and the United Kingdom. These all benefitted from route developments that continued to reinforce their popularity during 2019.
The Board of MIA is scheduled to meet on February 26, 2020 to consider and approve its financial statements for the year ended December 31, 2019. The Board shall also consider the payment of a dividend to its shareholders.
Furthermore, during a press conference held at the end of the month, MIA announced its long-term goals, including an investment of around €100 million in the terminal expansion. The company's traffic forecast for 2020 shows that passenger numbers are expected to rise by an additional 2-3 per cent, reaching 7.5 million movements.
This expansion will eventually occupy around 31,200 square metres, that is doubling its current area. The main focus will be given towards improving the passenger experience and airport processes, particularly the check-in hall, the security screening area and the departure gates.
The airport will soon be issuing a call for architects to submit a detailed proposal and phasing plans for the terminal expansion project. Other important projects will also be taken into consideration, including the development of Apron X and the development of SkyParks II. Last week, a call for hospitality partners was issued to submit their proposal for running the hotel, which will be forming part of the SkyParks campus.
The company's financial targets were disclosed at the end of the conference. Total revenue is expected to exceed €102 million while EBITDA is expected to be over €64 million. Net profit is projected to be more than €35 million and capital investments are estimated to reach €23 million.
RS2 Software plc (RS2) shares appreciated by €0.20 or 9.4 per cent, as 887,520 shares changed ownership across 138 deals, closing at €2.34. During the month, RS2 announced the acquisition of KALICOM Liebers Zahlungssysteme KG, a very successful commercial network operator. This company, which is located in Germany, is one of the leading commercial network operators for electronic, card-based payments systems with several thousand payment terminals. It offers products including POS terminals, girocard/direct debit processing, routing of credit card transactions and referral of acquiring services to small-to-medium sized enterprises across Germany.
RS2's product portfolio shall be enhanced, as this acquisition shall give a quick start into the direct acquiring business with immediate capabilities of selling, installing and servicing terminals and processing card transactions in the German market. It will provide the company with an attractive entry portfolio, with more than 4,000 terminals as well as an existing merchant book. This is in line with RS2's strategic shift from continuing to provide perpetual Licenses of its platform to Managed Services, Merchant Acquiring Services and Issuing Services throughout Europe, Middle East, North America, Latin America and Asia Pacific, resulting in international growth and expansion.
RS2 is one of the leading providers of payment solution for financial institutions, processors, ISVs, payment facilitators and merchants in Europe, APAC, LATAM, Middle East and North America through one single solution. The company serves more than 1.5 million merchants and over 350 million cards on an international basis.
Meanwhile, Loqus Holdings plc shares increased by 1.6 per cent, having witnessed one trade of 1,000 shares, to close at €0.066.
The newly issued equity Harvest Technology plc, traded unchanged at €1.50 on two transactions of 3,264 shares.
Mapfre Middlesea plc shares oscillated between a monthly high of €2.36 and a low of €2.18, to ultimately close at €2.32. The investments and insurance services provider's shares were negotiated across 19 deals of 27,814 shares. The board of the company shall meet on March 12, 2020 to consider, and if deemed fit, approve its audited financial statements for the year ended December 31, 2019. The board shall also consider the declaration of dividend to be recommended to the Annual General Meeting of shareholders.
In the same sector, GlobalCapital plc shares increased by 7.1 per cent over five trades of 19,704 shares, closing at €0.30.
The food and beverage supplier Simonds Cisk Farsons plc (SFC), registered a 5.2 per cent loss in its share price, as 8,690 shares were executed across 17 trades, closing €0.60 lower at €10.90.
SFC's spin-off Trident Estates plc shares advanced by €0.22 or 14.2 per cent, as 31,387 shares changed ownership across 11 deals, to close at €1.77.
International Hotel Investments plc shares fell by 2.4 per cent over 18 transactions of 240,329 shares, to close at €0.81.
Tigne Mall plc shares traded flat at €0.90, on eight deals of 210,850 shares. Meanwhile, Main Street Complex plc shares declined by 3.3 per cent across 10 deals of 103,200 shares, closing at €0.58.
The retail and supermarkets owner PG plc, registered a 9.8 per cent rally in its share price, having closed €0.18 higher at €2.02. The equity was negotiated over 69 trades of 714,086 shares.
In the same sector, MIDI plc shares fell by 13 per cent across 19 transactions of 109,185 shares, closing €0.07 lower at €0.47. Meanwhile, Malita Investments plc shares closed unchanged at €0.90, despite having traded at a monthly high of €0.94. The equity was negotiated across 17 trades of 119,050 shares.
The board of Malita is scheduled to meet on March 11, 2020, to consider and if deemed fit, approve the company's financial statements for the year ended December 31, 2019. The board shall consider the payment of a final dividend. The next AGM is set for May 6, 2020.
MaltaPost plc shares swayed from a monthly high of €1.35 to a low of €1.27, however closed 2.3 per cent higher at €1.34. The local postal services operator's shares were active on 11 transactions of 19,814 shares.
Medserv plc shares fell by a minimal 0.9 per cent over four deals of 4,900 shares, to close at €1.09. The oil and gas logistics services provider announced that the conditional framework agreement from the launch of the voluntary bid was extended to March 6, 2020. By this deadline, certain conditions need to be satisfied prior to the voluntary bid launched by AMT SA to the company's shareholders. Last December, the company commenced its process of due diligence on AMT SA and its subsidiaries. The EGM shall be scheduled once the board approve the terms of the share for share exchange.
In the corporate bond market, 63 issues were active, of which 40 gained ground and 16 fell, amounting to a turnover of €8.4million. The 6% Pendergardens Developments Plc Secured € 2022 Series II headed the list of gainers, having advanced by 2.9 per cent, to close at €108. Meanwhile, the 5.8% IHI 2023 were the worst performers, having declined by 4.1per cent, closing at €104.01.
In the sovereign debt market, turnover totalled to €20.9million. Activity was spread across 25 issues of which nine advanced and 14 declined. The 2.1% MGS 2039 (I) was the most liquid issue, having witnessed a turnover of €4.6 million, to close 4.5 per cent lower at €124.20.
This article, which was compiled by 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 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 Limited at 67, Level 3, South Street, Valletta, or on Tel: 2122 4410, or email [email protected]