February 15 2004
Malta Stock Exchange index climbs 6.5 per cent in January
The Malta Stock Exchange reviews activity in Malta’s equity and bond markets over January 2004 and reveals that the MSE’s index, over heavy trading, climbed by 6.5 per cent, while bond market dealing increased by 43 per cent. Following are extracts from the MSE’s monthly report
During January 2004 the Malta Stock Exchange’s Share Index powered ahead by 6.5 per cent on considerable volume levels, closing the month at 2262.947, up from the 2125.765 registered at the end of December. Over December the index had lost 0.8 per cent off its value.
A total of 3.28 million shares changed hands - including two put-through trades in FIMBank that amounted to a million shares each. Even without these two exceptional transactions that were part of a corporate action taken FIMBank, the volume of shares traded was nevertheless remarkable, with the monthly figure 1.28 million shares being well above the 2003 monthly average of 0.85 million, and the 0.795 million recorded in December 2003.
The figure was also twice that of the corresponding month of 2003, in which 0.693 shares were traded. The surge in activity showed also in the number of deals transacted. During January 2004, 682 deals were registered; for December the amount of deals in equities was 265, while in January of last year it was 467. The 2003 monthly average was of 367 deals.
Bank of Valletta and Maltacom shares accounted for the lion’s share of this increase. Bank of Valletta shares traded 182 times and 202,558 shares were involved. In December the figures were 54 and 156,159 respectively. The shares gained 11 per cent to cancel out the previous month’s 6 per cent loss and get closer to the October 2003 level of Lm2.75.
Maltacom shares, meanwhile, were the top performers in terms of price gains as their value leaped ahead by 14.29 per cent. Some 752,231 million shares changed hands in 278 deals. The lowest price recorded was that of Lm1.049 on the first trading session of the year whilst the highest was of Lm1.27.
The company issued its financial results as at 30 September 2003. Profit before tax for the first nine months of 2003 increased to Lm19.381 million compared to Lm9.842 million for the corresponding period of 2002. The sale of Vodafone shares was behind this increase, contributing Lm 7.538 million. Profits before tax net of this exceptional one-off event were Lm12.616 million or 25 per cent higher from the same period of last year. Turnover was higher by just three per cent and the increase in profits was largely due to decrease in costs, both direct and indirect. Trading activity in the telecom company was comparatively high. During December, 73 deals accounted for the transfer of 111,637 shares whilst a year ago the amount of deals in January was 166 with 293,967 shares changing hands. Volume on up days was noticeably higher.
Albeit at a slower pace, HSBC Bank Malta shares continued to benefit from further buying interest and added another healthy seven per cent. The amount of shares traded in January was nearly a quarter of that of December although the number of deals was up from 61 to 81.
Shares of Middlesea Insurance were amongst the worst performers during the month with a loss of 8.3 per cent. Activity in these shares continued to be low. While there was no trading last December, 24 deals took place in January 2004 with the corresponding volume being of 3,213 shares. In January 2003 activity was somewhat higher with 77,984 shares changing hands. In 2003 the average monthly volume in MSI shares was 15,692.
Suncrest shares were not traded despite the company issuing its financial statements for the year ended 31 October 2003. Suncrest Hotels plc made a loss on ordinary activities of Lm0.361 million with a turnover of Lm2.193 million. In 2002 losses were Lm0.309 and the turnover was Lm2.512. Losses per share rose to 3c6 from the 2c of a year earlier as the company explained that 2003 was weak for the industry and the losses incurred between November and April were too high to be recouped in the summer months – revenue per room declined by 12 per cent. The outlook for 2004 is not optimistic although the company expects a further pickup in summer. No dividend was paid. The last trade in SCR shares was registered on 23 August, at a price of 52c. Currently there are no bids (buy orders) on the market whilst offers (sell orders) stand at 29c9. – shares were listed on the market at 75c in April 1997.
Activity in the rest of the equity market was subdued. GloBAl shares, formerly Globe, traded only twice with just 400 shares changing hands, closing off 9.5 per cent at 95c. The Global Financial Services Group established a new subsidiary, MY Insurance Brokers to enhance the Group’s core business by assisting its clients in their insurance requirements.
Plaza, FIM Bank and IHI shares all ended the month in the red with losses of 1.67 per cent, 3.23 per cent, 4.76 per cent. Shares of Lombard were up 0.54 per cent on the month whilst Simonds Farsons Cisk extended the positive spell by adding another 2.22 per cent.
Trading activity in the Corporate Bond Market was in line with the previous month’s level though the number of deals was up nothing short of 43 per cent. Turnover in corporate bonds reached Lm0.532 compared with Lm0.538 a month earlier and Lm1.015 a year earlier. Average monthly turnover in the market during 2003 was of Lm0.850 million.
Bonds of Suncrest Hotels took a hit as soon as the company published its financial statements for the year ending 31 October 2003. A disappointing performance, that saw the trading deficit widen, sent bond prices to an all time low of Lm94 with the yield to maturity at 10.58 per cent. Since the announcement was made only Lm16,700 nominal worth of bonds have been offloaded as the market is short of any bids (buy orders).
The company has Lm2.992 million worth of bonds listed on the MSE. In the meantime Suncrest said that it will convert a number of hotel guest rooms into timeshare apartments over a three-year period, the profit from which will serve to redeem the bonds in 2007.
The newly issued Gasan Finance bonds carrying a coupon of 6.4 per cent have been the second worst performing fixed income instrument as they shed 2.43 per cent to close at Lm100.50, down from Lm103 of last year. Other corporate bonds losing ground in January included 6.7 per cent Corinthia 2009 and 6.5 per cent Corinthia 2010 (EUR), 6.7 per cent Tumas 2010/12 and 6.75 per cent United 2008. Bonds of Farsons and CareMalta have increased in value although in the case of Farsons trading was thin.
The recently listed Dolmen bond has also appreciated in satisfactory trading activity. Twenty-four deals for a value of Lm39,893 have taken place in 6 per cent Dolmen 2010/2013.
Turnover in Government stocks was exceptionally high, surpassing the Lm9 million level. One single transaction on 28 January in the 5.6 per cent MGS 2005 (II) accounted for half of the activity in the market.
Nevertheless trading was very active in this asset class with 332 deals. In December 2003 there had been 196 deals amounting to Lm2.88 million in turnover, whilst in January 2003 there were 163 deals and Lm0.96 million in turnover).
The best performing stock was the 5.9 per cent 2010 gaining 2.78 per cent to Lm107.82 with the yield going in the opposite direction down to 4.55 per cent from 5.05 per cent a month earlier.
The biggest decline was registered in the stock with the second shortest maturity, 6.8 per cent MGS 2004 (II) that is due for redemption in July. In four deals the price got closer to the nominal value of Lm100 by 75c, taking the yield up to 2.85 per cent. Yields remained pretty unchanged at the long end of the curve, whilst price volatility in short-term stocks caused the yield curve to flatten considerably.
Almost 40 per cent of the activity in government bonds was accounted for by the most recently issued stock 4.8 per cent MGS 2016 (II). This on-the-run issue traded 124 times with total value traded amounting to Lm1.986 million. The price of the bond increased by 1.24 per cent, up from Lm100.75 at the end of December to Lm102 by the end of January. Its yield was down by another 13 basis point to 4.59 per cent. Turnover was also considerable in the 7.8 per cent MGS 2018 which accumulated Lm1.358 million over 13 deals; the closing price was Lm129.95, half a percentage point less than the close of December.