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27.10.2022 6 MARKETS Symbol Volume Value Trades High Low Open Closing Change Code Traded Traded Trades Price Price Price Price EQUITIES APS 10,000 6,350.01 2 0.635 0.635 0.635 0.635 0.000 BMIT 25,000 11,550.00 1 0.462 0.462 0.462 0.462 -0.002 BOV 21,329 18,689.98 5 0.900 0.870 0.880 0.900 0.000 GO 1,000 3,020.00 1 3.020 3.020 3.020 3.020 0.020 HSB 2,390 1,768.60 1 0.740 0.740 0.740 0.740 0.000 TRI 792 1,156.32 1 1.460 1.460 1.460 1.460 0.000 CORPORATE BONDS BN32A 20,000 20,000.00 1 100.000 100.000 100.000 100.000 0.000 CB27A 6,000 5,952.00 1 99.200 99.200 99.200 99.200 0.200 EF27A 4,000 4,000.00 1 100.000 100.000 100.000 100.000 0.000 HP25A 4,500 4,567.50 2 101.500 101.500 101.500 101.500 0.000 IB25A 99,500 101,987.50 2 102.500 102.500 102.500 102.500 0.000 IH26A 5,600 5,656.00 2 101.000 101.000 101.000 101.000 0.000 IH26B 4,800 4,776.00 1 99.500 99.500 99.500 99.500 0.000 IH31A 12,000 11,460.00 4 95.500 95.500 95.500 95.500 0.000 MD26A 17,800 17,801.12 4 100.040 100.000 100.040 100.000 -0.040 MF24A 100 102.60 1 102.600 102.600 102.600 102.600 0.600 PC26A 4,500 4,485.00 4 100.000 99.500 99.500 100.000 2.000 ST27A 10,000 10,000.00 1 100.000 100.000 100.000 100.000 0.000 Malta Stock Exchange Regulated Main Market Trading Date: 26 Oct 2022 The British pound may remain volatile for now THE British pound has been at the centre of market volatility in recent weeks, sparked by the reac- tion of financial markets to the UK mini-budget. ere doesn't seem to be a definitive end to this, even though the resignation of Former Prime Minister Liz Truss has act- ed as a temporary stabilizer for the currency. With regards to the UK market, there are several underlying drivers behind the sharp moves that have taken place. ere were many steps taken by both the Bank of England and the UK government that pre- cipitated the situation but alarm bells started ringing as soon as further expectations of monetary tightening by the Bank of England grew upon the announcement of a so-called mini-budget by the UK government on the 23rd of Sep- tember. is caused the pound to fall in value, which was detrimen- tal because a weakened pound left consumers with less buying power. Another cause of concern was the market turmoil that ensued. Volatility was observed in the FTSE 100 Index, which includes the largest 100 companies listed on the London Stock Exchange. e uncertainty resulting from the competence of the government's leadership during this time is what is thought to have caused the mar- ket's negative reaction. e market was already struggling as a multitude of UK companies faced demands for more liquidity. To make matters worse, pension funds were forced to offload part of their holdings of UK government bonds, or gilts, at distressed prices after the government's announce- ment of tax cuts sent yields soaring, triggering margin calls on deriva- tives designed to protect the funds against movements in rates. According to new data, the eco- nomic activity in the UK was poor in multiple areas, including real es- tate, which has since seen growth subsiding. is was due to the rise in borrowing costs which reduced home-loan affordability, with some lenders also pulling their mortgage products from the market. In addition, unemployment in the UK hit a multi-decade low around August, as data from the Office for National Statistics showed that unemployment stood at 3.5 per cent, which is 0.3 percentage points down on the quarter. With the po- tential of two decades of lost wage growth, the Bank of England's fore- casts have been dim. ese are not the only problems that the UK fac- es, and the nation has so far had a poor track record in dealing with its economic issues in 2022. e pound recovered to $1.126 and gilts rallied after Jeremy Hunt was appointed Chancellor of the Exchequer on Friday 14th Octo- ber. e British pound traded just above $1.125 after rising to almost $1.13 earlier in the session previous to that. In a statement, Hunt said he would reverse almost all previous- ly announced tax measures that were suggested by his predecessor, Kwasi Kwarteng. e 30-year gilt yield went down after he took over, reflecting higher market prices as companies seemed to have drawn comfort from this move which, in turn, restored some confidence in the UK's fiscal position. Liz Truss quit as UK prime min- ister, drawing a close to her 44 days in office which saw her preside over an economic meltdown and repu- tational concerns flowing towards the ruling Conservative party. Fol- lowing a market crash and a U-turn on her budget proposals, the an- nouncement came as Britain was still facing risks of recession amid political and financial turmoil driv- en by the surge in natural gas pric- es, post-Covid supply-chain bottle- necks, and labour shortages. In summary, the actions of the Bank of England—namely, stepping up its interest rates to combat per- sistently high inflation—in combi- nation with the decisions taken by the former UK Prime Minister, Liz Truss, have caused market turbu- lence in both the UK stock market and in the pound sterling. Possible future actions of UK government leadership may cast doubt on the stability of the UK economy and the British pound. At this stage, the smooth leadership of the country seems crucial for economic recov- ery. is article was written by Shaun Frendo, Research Analyst at Calamatta Cuschieri. e article is issued by Calamatta Cuschieri Investment Services Ltd, which is licensed to conduct investment services business under the Investments Services Act by the MFSA and is also registered as a Tied Insurance Intermediary under the Insurance Distribution Act 2018. For more information visit https:// cc.com.mt/. e information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. PC26A - 3.75% PRC PLC