Business • January 25 2004

The Malta Stock Exchange reviews Q4 2003

In its review of last year’s fourth quarter, the Malta Stock Exchange reviews its equity and bond markets and its administrative, regulatory and operational. Following are extracts from the extensive report, which highlight activities on the Exchange between October and December 2003.

The Maltese equity market
During the fourth quarter of 2003 the MSE Ordinary Share Index moved higher. The first half of the quarter had however been more positive, with the Index accumulating 4.4 per cent. Since 12 November, when the Index peaked at 2164, market prices consolidated and the MSE Index gave away nearly half of this gain to finish off the quarter up by just 2.3 per cent.
A total volume of 2,232,553 shares were traded over 1,074 deals. This compares negatively to the 1,133 trades of Q3 in which 3,960,395 shares were traded. Similarly this quarter’s trading activity has been milder than that registered in Q4 of 2002 when 2,572,496 shares changed hands over 1,210 transactions.
Out of the 11 companies making up the MSE index, six closed the quarter in the red. The biggest losers have been the shares of First International Merchant Bank (FIM Bank) which shed more than 21 per cent off their value. Shares of FIM Bank closed at US$0.93 compared with the US$1.18 at the end of the third quarter. Shares of Plaza Centres and GloBAl were also amongst the worst performers with losses of 14 per cent each. Maltacom shares retraced back towards the Lm1 level and closed the quarter down by four per cent. Lombard Bank and Middlesea Insurance shares closed marginally down. Datatrak shares continued their slide and gave up another four cents to close at an all time low of 25c.
On the positive side, HSBC Bank Malta shares and Simonds Farsons Cisk shares were the best performers with rises of over 10 per cent and 12 per cent respectively. For HSBC the leap occurred on heavy volumes, and came hot on the heels of the 13.7 per cent rise of the previous quarter. During the last three months of the year more than half a million HSBC shares changed hands for a total value of Lm2.76 million. HSBC Bank Malta shares were up 43 per cent for the year 2003.
Simonds Farsons Cisk shares rose in response to encouraging financial results issued on 1st October, covering the six months ending 31 July. Bottom line figures have improved across the board with earnings per share rising from 2c2 to 3c. Trading volumes were relatively low with 23,883 shares (Q3 - 27,274) changing hands over 22 deals (Q3 - 32).
Malta International Airport reported its financial performance for the interim period ending on 30 September. Despite a nine per cent increase in turnover, profits before tax were down by 3.3 per cent from the corresponding period a year before. Shares closed the quarter up by nearly three per cent thanks to an increase in price of 7.7 per cent on December 29. Otherwise trading in MIA was choppy with neither buyers nor sellers prevailing; trading was range bound between 63c and 70c. The company paid out 1c4 per share in dividends.
Bank of Valletta also presented its financial statements for the year ending on 30 September. Both net interest income and profit before tax were up from a year before, with EPS rising from 16c6 to 18c7. Net interest income rose by more than 13 per cent whilst the profit before tax increased by a mere 1.7 per cent due to higher impairment losses. This increase in impairment losses results from an exercise that the Bank is carrying out to revise the level of impairment allowances as stipulated by new local legislation and international practices.
The company paid out 11c per share in dividends. Trading in Bank of Valletta shares was high, with 625,900 shares (Q3, 321,686) changing hands in 368 deals (Q3- 250). The price of BOV shares was up over two per cent for the quarter.

The Maltese bond market
Two new corporate bonds were listed during the quarter – 6.4 per cent Gasan Finance 2008/2011 and six per cent Dolmen Properties 2010/2013. At the same time the bond 6.15 per cent Gasan Finance 2003/2004 has matured. Gasan Finance issued Lm5 million worth of bonds whilst Dolmen Properties issued Lm4.7 million.
After these changes the number of corporate bonds listed on the MSE has gone up to 27, with a nominal value of nearly Lm218 million. A total of 637 transactions have taken place during the quarter for a value of Lm2.42 million. This amount is considerably higher than of the one of the previous quarter in which only 464 trades were registered totalling Lm2.26 million in value. This was the first rise in trading activity in the corporate bond market after two consecutive months of decline.
Price performance has been mixed amongst bonds. The best performer was the Malta Government Privatisation Bond that matures in 2005 with an increase of 1.92 per cent. Notable price increases were also those registered in the bonds 6.7 per cent Corinthia Finance 2009 (+1.24 per cent) and eight per cent Bank of Valletta 2010 (+1.51 per cent). The bonds of Eden Finance lost 3.5 per cent over the quarter falling to Lm96.50 per Lm100 nominal.
Suncrest bonds with coupon 8.25 per cent have registered a decline of one per cent to Lm99. Trading was mainly concentrated in the newly issued bonds, 6.4 per cent Gasan and six per cent Dolmen, with over 50 trades a piece. The eight per cent BOV 2010 bonds denominated in US$ had another active spell in which 52 trades were consummated. In terms of traded value none of the former ranked at the top of the list. HSBC bonds registered the highest turnover at Lm236,001, followed by 6.7 per cent Tumas Investments at 2010/2012 with Lm233,987, and 6.3 per cent IHI 2013 with Lm196,208.
With regards to the Government of Malta Stocks (MGS) turnover rose to Lm20.4 million compared with the Lm15.2 of the previous quarter and Lm8.6 of Quarter 2. The number of deals has been substantially less than the previous three months. During Quarter 4, 786 trades were recorded compared to 1,063 of Quarter 3. The newly listed stock, 4.8 per cent 2016 (II) registered 79 trades with a total turnover of Lm1.18 million; its price rose by 75c to Lm100.75, pushing down the yield to 4.72 per cent.
As the yield curves show despite the slight decrease in prices, yields continued to decline across most maturities especially at the short end of the curve. Less pronounced was the decline in yields on the longer term bonds and indeed the yield on the 20 year bonds rose by 6.285 basis points. Only fourteen Malta Government Stocks out of the thirty that have been traded did gain in value in the last three months of the year. In the previous quarter the corresponding figure was twenty-three. Gains were limited and the 0.92 per cent increase in the price of 5.9 per cent MGS 2007 (II) was the highest increment registered. Price decreases were somehow more pronounced though isolated in nature –the stock 7.8 per cent 2012 lost two per cent whilst the stock 6.35 per cent 2013 (II) gave away 1.61 per cent.

The Malta Stock Exchange’s full review of Q4 2003 can be found on its website at: www.borzamalta.com.mt