Issue link: https://maltatoday.uberflip.com/i/525174
maltatoday, WEDNESDAY, 10 JUNE 2015 12 Business Today Regular market closed – 09/06/2015 Symbol Code Volume Traded Value Traded Trades High Price Low Price Open Price Close Price Change l BOV 6,550 14,999.500 4 2.290 2.290 2.290 2.290 0.000 l FIM 18,681 8,691.670 4 0.466 0.465 0.466 0.465 0.000 l GHM 20,000 37,778.750 3 1.890 1.840 1.840 1.890 0.000 l GO 3,000 9,300.000 1 3.100 3.100 3.100 3.100 0.000 t HSB 556 1,023.040 1 1.840 1.840 1.840 1.840 -0.010 t MIA 740 2,493.800 1 3.370 3.370 3.370 3.370 -0.005 s MMS 16,110 28,961.000 6 1.850 1.750 1.750 1.850 0.180 t PZC 7,825 7,582.430 2 0.969 0.969 0.969 0.969 -0.001 t G15B 7,222 7,360.670 3 101.920 101.920 101.920 101.920 -0.020 t G15F 373,800 380,341.500 7 101.750 101.750 101.750 101.750 -0.030 t G16A 13,977 14,702.410 2 105.190 105.190 105.190 105.190 -0.020 t G16B 2,200 2,348.500 1 106.750 106.750 106.750 106.750 -0.020 t G20B 125,000 146,900.000 1 117.520 117.520 117.520 117.520 -0.130 t G21A 234,940 288,764.750 8 122.910 122.910 122.910 122.910 -0.120 t G22A 95,272 119,814.070 1 125.760 125.760 125.760 125.760 -0.150 t G22B 68,600 82,285.700 3 119.950 119.950 119.950 119.950 -0.120 t G28A 110,000 144,782.000 2 131.620 131.620 131.620 131.620 -0.390 t G28B 44,500 57,071.250 5 128.250 128.250 128.250 128.250 -0.380 t G29A 55,000 74,921.000 4 136.220 136.220 136.220 136.220 -0.420 t G30A 56,700 78,915.060 4 139.180 139.180 139.180 139.180 -0.410 t G31A 84,800 118,974.400 3 140.300 140.300 140.300 140.300 -0.370 t G32A 107,000 142,994.800 7 133.640 133.640 133.640 133.640 -0.320 t G32B 105,000 137,445.000 5 130.900 130.900 130.900 130.900 -0.310 t G33A 110,200 142,334.320 6 129.160 129.160 129.160 129.160 -0.370 t G34A 127,000 162,456.900 6 128.310 126.470 126.470 126.470 -0.450 l BV19A 24,100 26,510.000 4 110.000 110.000 110.000 110.000 0.000 t HM24A 19,000 20,805.580 2 109.510 109.500 109.510 109.500 -0.010 t IH19A 1,000 1,032.000 1 103.200 103.200 103.200 103.200 -0.570 s IH20A 2,500 2,602.500 1 104.100 104.100 104.100 104.100 0.600 s IH21A 7,000 7,595.000 2 108.500 108.500 108.500 108.500 0.500 l IH25A 17,500 19,600.000 3 112.000 112.000 112.000 112.000 0.000 s MI15A 31,000 31,387.500 3 101.250 101.250 101.250 101.250 1.750 l MI17A 20,000 19,790.000 6 99.000 98.500 99.000 99.000 0.000 l MS23A 1,600 1,776.000 1 111.000 111.000 111.000 111.000 0.000 s PC20A 2,500 2,737.500 1 109.500 109.500 109.500 109.500 0.070 t TI24A 13,500 15,066.500 2 111.990 110.500 111.990 110.500 -1.490 Market Summary as at June 9, 2015 Equity Official List Session State ................................................................... closed Number of trades ............................................................. 116 Volume Traded ................................................................. 1,934,373 Value of € denominated securities .................................... 2,353,453.430 Value of US$ denominated securities ................................ 8,691.670 Value of GBP£ denominated securities .............................. 0.00 Current Index ................................................................... 3,970.379 Previous Index ................................................................. 3,956.308 Change in Index (%) ......................................................... 0.356% 6pm Holdings plc .......................... 0.706 0.00% Malta International Airport plc ....... 3.449 -0.03% Bank of Valletta plc ........................ 2.290 0.44% MaltaPost plc ................................. 1.500 0.00% FIMBank plc .................................. 0.451 0.00% Medserv plc .................................. 2.155 0.00% GlobalCapital plc ........................... 0.800 0.00% Mapfre Middlesea plc .................... 1.221 0.00% GO plc ........................................... 2.990 0.00% MIDI plc ........................................ 0.290 0.00% Grand Harbour Marina plc ............. 1.900 0.00% Plaza Centres plc ........................... 0.951 0.00% HSBC Bank Malta plc ..................... 1.845 -0.27% RS2 Software plc............................ 3.179 0.00% International Hotel Investments plc 0.680 0.00% Simonds Farsons Cisk plc ............... 3.650 3.55% Island Hotels Group Holdings plc ... 1.020 0.00% Tigné Mall plc ................................ 0.800 0.00% Lombard Bank Malta plc ................ 1.950 0.00% Pefaco International plc ................. 2.190 0.00% Malita Investments plc ................... 0.869 -0.11% Santumas Shareholdings plc ......... 1.995 0.00% MSE Index Market commentary: Deciphering current markets Gone seem to be the days where the investment strategy was easy, where you would buy any American or Eu- ropean financial product (apart from commodities) and you'd make money. Be it bonds or equities, all were mak- ing money and the strategy was very straight forward as the policy winds were in their sails and the market drift- ed along gently, making it seem all too easy for the average investor. Sure enough, many retail investors boarded the money making ship which was the promise and implementation of QE which will inflate asset prices, and boy did it pay dividends. As Isaac Newton had discovered a while back, eventually what goes up must come down. Although in financial markets that does not always hold proportionally true, when markets over-stretch themselves there is often a quick and unforgiving knee- jerk reaction which catches the passive investor by surprise. Over the past couple of weeks we have witnessed this characteristic as many overly bullish investors were left somewhat surprised by the European economies' positive reaction to Draghi's policies and QE programme. Sentiment appears to be changing, albeit it is still very early to claim victory as we require further, broader and more consistent data to claim that Europe is out of the woods. Over in the US, for the past couple of months it has been a matter of when not if the Federal Reserve is going to raise interest rates, consensus leaning towards the end of September should economic data return favourable. The headwinds that appear to remain are the performance of the global economy, with China slowing down and Europe still buckling, creating a damper on GDP growth expectations. The result of this mixed and rather unclear environment is volatility. In Draghi's press conference last Thursday the ECB president made it clear that investors should expect a period of volatility in asset prices. This in my opinion added more fuel to the correction, as volatility adds to the equity risk premium attributed to stocks, increasing the expected return on those assets in order to hold the stock. Investors have started to question whether we have reached a turning point, and those early birds who begin to have cold feet, and want to lock in the handsome return they generated over the recent months to take a risk off approach and dump their assets, resulting in downward price pressure. The current short term approach I am taking is also one which is risk off, underweight equities and bonds, which so far has proven successful since as anticipated the lack of clarity and difficulty in interpreting the markets is resulting in further downward pressure on asset prices as less people are willing to take on risk, also given that the summer months play a factor due to decreased volume and bids. Going forward however, downside risks still remain as I expect the optimism following the increased momentum from the QE programme to wear off and I still have my reservations whether the European economies can produce back-to-back improvements in economic data which is commensurate with justified changes in future inflation and interest rate expectations due to structural weaknesses inherent in the European economies which persist. Signs of this are the poor translation of QE funds to non-financial corporates which are the economic drivers in an economy. One thing may be true however, it appears that European economies have bottomed out, and the probability of deflation is lower than a couple of months ago; therefore I find it hard to visualise bond prices reaching the levels they achieved last April. We surely have interesting times ahead, and I would retain some cash to take advantage of some over-played weaknesses. This article was issued by Simon Psaila, trader/analyst at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The 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. Calamatta Cuschieri & Co. Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing in this newspaper. Money Market Report for the week ending June 5, 2015 ECB decisions On Wednesday, June 3, the Governing Council of the European Central Bank (ECB) decided that the interest rates on the main refinancing operations (MRO), on the marginal lending facility and on the deposit facility will remain unchanged at 0.05%, 0.30% and -0.20% respectively. ECB Monetary Operations On Monday, June 1, the ECB announced its weekly MRO. The auction was conducted on Tuesday, June 2, and attracted bids from euro area eligible counterparties of €92.52 billion, €7.59 billion lower than the bid amount of the previous week. The amount was allotted in full at a fixed rate equivalent to the prevailing MRO rate of 0.05%, in accordance with current ECB policy. On Wednesday, June 3, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation was carried out at a fixed rate of 0.62% and did not attract bids from euro area eligible counterparties. Domestic Treasury Bill Market In the domestic primary market for Treasury bills, the Treasury invited tenders for 91- day bills maturing on September 4, 2015. Bids of €44.00 million were submitted, with the Treasury accepting €5.00 million. Since €17.00 million worth of bills matured during the week, the outstanding balance of Treasury bills decreased by €12.00 million, to stand at €192.05 million. The yield from the 91-day bill auction was -0.005%, down by 0.1 basis point from bids with a similar tenor issued on May 29, 2015, representing a bid price of 100.0013 per 100 nominal. During the week under review, there was no trading on the Malta Stock Exchange. On Tuesday the Treasury invited tenders for 91-day bills maturing on September 11, 2015.