MSE | Wednesday, 25 February 2009

GlobalCapital Financial Management Ltd - Malta Stock Exchange Review

Leading banking stocks record another negative movement

Yesterday, losses posted by the big banks left the Malta Stock Exchange index in negative terrain for the ninth consecutive session. The Maltese equity market saw sluggish trading predominantly in the red and no gainers were recorded.
On the banking front, Bank of Valletta p.l.c. and HSBC Bank Malta p.l.c. witnessed another setback. Their share price dipped €10c2 and €10c0 at €2.033 and €2.24 respectively. Volumes were quite strong as 29,130 shares were swapped in Bank of Valletta across thirty-three trades. Meanwhile, 27,765 shares changed hands in HSBC Bank Malta across twenty-one deals.
On Friday 20th February, the Board of Directors of HSBC Bank Malta p.l.c. approved the Preliminary Statement of annual results for the financial year ended 31st December 2008. The Board of Directors resolved to recommend that the Annual General Meeting to be held on 1st April 2009 shall approve the payment of a final ordinary dividend of €0.096 gross per share or €0.062 net per share. This will be paid on 20th April 2009 to shareholders who are on the company’s register of shareholders as at 4th March 2009. This, together with the gross interim ordinary dividend of €0.119 per share, results in a total gross dividend for the year of €0.215. Profit before tax of €96.1 million for the year ended 31st December 2008, down €18.6 million, or 16.2%, compared with €114.6 million in 2007. Profit attributable to shareholders down 17.3%, or €13.2 million, to €63.1 million, compared with €76.3 million in 2007. Earnings per share of €0.216, down 17.2% compared to €0.261 for 2007. Loans and advances to customers of €3,112.2 million at 31st December 2008, up €289.9 million, or 10.3%, compared with 31st December 2007. Core customer deposits of €3,407.5 million at 31st December 2008, up €33.7 million, or 1%, compared with 31st December 2007. Return on equity of 22.3% for the year ended 31st December 2008, compared with 27.6% in 2007. Total assets of €5,296.1 million, up €401 million, or 8.2%, compared with 31st December 2007.
Remaining on the banking front, Lombard Bank p.l.c. slipped €2c0 to settle at the €2.46 level across 2,000 shares. At market close, best unsatisfied bids stood at €2.20 for 500 shares against best offers of 4,500 shares at €2.48. Week on week, Lombard Bank lost 5.39% from its closing price of €2.60 on Tuesday 17th February. The shares of GlobalCapital p.l.c. are still trading at €1.991.
On the retail front, Plaza Centres p.l.c. finished the second session of the week €0c1 lower at €1.679 across 3,000 shares.
Meanwhile, the shares of Middlesea Insurance p.l.c., Simonds Farsons Cisk p.l.c. and 6pm Holdings p.l.c. managed to stay above water. The share price closed unchanged from their previous session close at €2.575, €1.90 and £0.59 respectively.
On Thursday 12th February, Malta International Airport p.l.c. announced that the Company’s board of directors is scheduled to meet on the 12th March 2009 and shall consider the approval of the financial statements for the financial year ended 31st December 2008. Furthermore, the Board shall also consider whether to declare and make a recommendation to the shareholders for the payment of a dividend.
On Thursday 19th February Crimsonwing p.l.c. announced that the Company has been dealing with difficult trading conditions during the third quarter due to the financial markets turmoil and this challenge has continued in the final quarter of the financial year. Overall, and before exchange rate effects, the Crimsonwing business units will show a combined operational profit for the year of circa €100,000, and this includes an allowance for losses of around €400,000 at VDA which was acquired in July 2008. All the business units, apart from VDA are profitable, despite the difficult global economic conditions. The further weakening of the UK Sterling against the Euro in Q4 has compounded the effect of the general economic downturn that could have a material impact on the Group’s profitability. Unless there is significant recovery in the exchange rate scenario over the remaining two months until the Group’s financial year-end, it is likely that the Group will make a loss of circa €400,000 on exchange that will result in the year-end position of Crimsonwing plc reporting losses of around €300,000 overall. In order to facilitate a speedy profit recovery for the first financial year quarter of 2009, Crimsonwing has undertaken some restructuring to reduce the cost base. Despite the set-back due to tough market conditions and a weaker Sterling currency, the Directors have taken prompt and decisive action and feel very confident about Crimsonwing’s ability to compete in a tight market.
In the fixed interest market, a total of €813,236 (Eighty-Eight deals) were transacted in Government Bonds. Meanwhile, a total of €68,767 (Thirteen deals) were transacted in Corporate Bonds.

Issued by GlobalCapital Financial Management Ltd, 120 The Strand, Gzira, GZR1027 for information purposes only and is not intended to constitute any financial, legal or tax advice. This write up is not to be taken as investment advice to buy or sell any investment. Investors should seek professional advice prior to taking investment decisions and should note that the value of investments may fall as well as rise. Readers who would like more information are invited to send an E-mail to or Tel: 21 342342. GlobalCapital Financial Management Ltd is a member of the Malta Stock Exchange and is licensed by the Malta Financial Services Authority (MFSA).


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25 February 2009

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