The positive sentiment which surrounded the local stock exchange during the month of January failed to prevail in the second month of the year, as the Index’s performance on the month declined by 5.89 per cent to 3,620.153 points. Negative outlook towards financial equities, mainly affected by the fall in the share price of HSBC Bank Malta plc, was the main contributor to the uncertainty which bordered the MSE Index this month. Investors’ insecurity tipped the Index from positive to negative and back again as risk aversion propelled investors to lessen their exposure to risky securities. This was visible mainly in the activity over the month, as the number of deals in the equity market declined heavily from 1,354 in January to 741 in February, while liquidity fell by almost half that traded in the previous month. Eighteen equities were active throughout the month as only five equities managed to gain, 10 closed in the red, and three equities closed unchanged.

Total number of transactions recorded on the MSE in February across all available securities amounted to 1,258 and the total value of deals negotiated declined from almost EUR40m to just over EUR34m, one third of which was attributable to Treasury Bills. Activity in Corporate Bonds also declined as 273 deals for a value of over EUR2.1m were executed, while a considerable increase in activity in Government Stocks was evident as over EUR18.7m was traded across 233 deals.

All financial equities lost ground this month, with the exception of Global Capital plc and FIMBank plc as the latter closed flat at last month’s closing price of $1.18. Thirteen deals of 34,210 shares were executed as the equity traded at a monthly low of $1.14 and a high of $1.18. Meanwhile, GlobalCapital plc closed the month at EUR1.895, 0.42 per cent up, however only 2,400 shares were traded across five deals.

Conversely, Middlesea Insurance plc registered a hefty loss amounting to 12.69 per cent or EUR0.109 as the equity closed the month at EUR0.75. A shortfall in liquidity was noticeable as trading volume declined from over 433,000 shares in January to 114,494 shares in February across 50 transactions. The lack of activity and price decline in the insurance firm was mainly the result of its announcement on 11 February, when the firm announced that its Italian Subsidiary, Progress Assicurazioni SpA will cease writing business and take the necessary measures to wind up the company.

Similarly, HSBC Bank Malta plc (HSBC) failed to maintain its positive momentum enjoyed during January. In fact, the equity lost ground during the first and last trading weeks of the month under review, as last week’s trading sessions were negatively affected by the Bank’s financial statements as at 31 December, 2009, which showed a decline of 25.9 per cent in its profit before tax. HSBC closed the month at EUR3.30, 15.38 per cent down on the month as nearly 226,000 shares were dealt over 225 deals. The equity’s year-to-date performance stands at 2.17 per cent.

Likewise Bank of Valletta plc (BOV) closed the month 1.03 per cent or EUR0.035 down, as it closed the month’s final trading session at EUR3.365, having traded at a monthly low of EUR3.20 early in the month. Trading volume in BOV declined heavily as 231,478 shares were active across 247 deals, down from 419 transactions in January. The Bank’s performance since the beginning of the year is still up by 8.69 per cent.

MaltaPost plc continued to be an investors’ preference as trading volume increased massively throughout February. In fact, the equity was the most liquid equity as 35 deals of 301,656 shares were executed, however the equity did not manage to keep up the positive outlook enjoyed throughout January, having closed the month five per cent down at EUR0.759.

Meanwhile, GO plc moved 0.83 per cent higher on the month to close at EUR2.299 as 75 deals of 108,415 shares were executed. The equity also experienced a significant decline in liquidity compared to 327,374 shares in January.

The share price of Malta International Airport plc also headed downwards after the equity lost 2.91 per cent throughout the month, having traded at a high of EUR3.09 and a monthly low of EUR2.90, ending the month at EUR3.00. Transactions for the month amounted to 29 as trading volume increased by 26,835 shares to 59,898 shares. Despite this fall, the equity’s performance year-to-date stands at 25 per cent in the green.

Meanwhile International Hotel Investments plc recouped all losses registered in January as the equity managed a 2.56 per cent gain on 11 deals of 29,148 shares, while Lombard Bank plc eased marginally lower to close at EUR3.09, hence 0.93 per cent down on the month. Grand Harbour Marina plc for the second month running closed 1.58 per cent in the red as liquidity increased.



Mr Mizzi is managing director of Jesmond Mizzi Financial Services Limited