Issue link: https://maltatoday.uberflip.com/i/635436
maltatoday, WEDNESDAY, 3 FEBRUARY 2016 11 Business Today www.creditinfo.com.mt info@creditinfo.com.mt Tel: 2131 2344 Your Local Partner for Credit Risk Management Solutions Supporting you all the way Market commentary: New month, same descent Markets got off to a cautious start on Monday, the fi rst day of February, after a rocky January led markets to trade in negative territory. Despite intervention from the European Cen- tral Bank, the Federal Reserve Bank leaving interest rates unchanged and the Bank of Japan adopting negative interest rates, a sense of uncertainty still lingers among investors. European stocks continued to lose ground on Monday as fading hopes for an oil supply cut and disappointing manufacturing data from China send most Asian and European shares tumbling. Low-cost airline giant Ryanair was in the news, after the company announced average fares will continue to fall as much as 6% in the coming months as a result of lower fuel prices. Ryanair have also announced their profit after tax has increased over the three months ended December, to €103 million. Last year, Ryanair was the first airline in the world to carry 100 million international passengers. Commerzbank described the company as a "cash machine", with company CEO Kevin O'Leary saying Ryanair is set to generate around €2 billion per year. Mr O'Leary went on to say that the company will share its proceeds with investors, via a record €800 million share buyback. Europe's largest lender, HSBC, is allegedly imposing a hiring and pay freeze across the bank globally in 2016. This news comes after the board met last week to consider moving headquarters to Hong Kong and focusing on the bank's strategy. Consequently, shares were trading lower on the day. Staying with big banks, Barclays and Credit Suisse have been fined a total of $154 million by U.S. regulators for misconduct and misleading investors using the platform of 'Dark pooling'. Dark pool operations allow investors to trade large blocks of shares, but keep the prices private and unavailable to the public. Shares in Barclays were down by 1.70% on the day, with Credit Suisse shares falling 3.20%. Twitter shares started the week on a high. When one considers that Twitter had seen a 41% tumble in shares over the past three months, investors will be happy to know that they were up 8% in pre- market trading. Shares kept up that momentum during the day, trading well in the green. This surge came as a result of rumours of a possible takeover, with venture capitalist Mark Andreessen and Silver Lake partners thought to be interested in buying. With the current turmoil in the markets, risk-averse investors have once again found safety in trading Gold futures. April gold gained $8.50, or 0.8%, to trade at $1,124.90 an ounce. It is good to keep in mind that, when all isn't plain sailing, gold remains a natural safe haven for anyone with exposure to a weak currency. During this week, of particular importance will be Friday's economic news on Nonfarm Payrolls, which could prove valuable when analysing the possibility of a Fed rate hike in March. This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is 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 on this newspaper. Eurozone unemployment lowest since September 2011 Unemployment in the eurozone dropped in December to its low- est rate in over four years despite worries about the global econo- my. Eurostat, the EU's statistical agency, said the jobless rate in the 19-country eurozone had fallen to 10.4% from 10.5% in November. This means 16.75 million people are jobless, down 49,000 from November. In the full 28 member European Union the unemployment rate was unchanged at 9% in December. Among the member states Greece and Spain continue to have the highest jobless total at over 20%. The Czech Republic and Germany had the lowest rate, both at 4.5%. Although the German authorities, using a different calculation method, released a domestic unemployment rate of 6.3% for December earlier on Tuesday. Youth unemployment in the eurozone was 22%, compared with 23% in December 2014. Vienna Airport increases stake in MIA to more than 48% Vienna Airport said it bought Cana- dian SNC-Lavalin Group's indirect stake in Malta International Airport for about €63 million, subject to closing conditions by both parties. The deal will increase the Austrian company's stake in the Maltese operator by 15.5 percentage points to more than 48%, Vienna Airport said in a statement on Monday. The purchase price is equivalent to €3 per Malta Airport share, it said, a nearly 30 percent discount to Friday's closing price at €4.33. SNC-Lavalin, an investor in the operator since it was privatised more than 13 years ago, said the sale was in line with its strategy to monetise some of its mature infrastructure concession investments. SNCL Malta has a 38.75% interest in Malta Mediterranean Link Consortium Limited ("MMLC") which in turn has a 40% interest in Malta International Airport. Upon reaching financial close, the total consolidated holding of Flughafen Wien AG in Malta Airport will be more than 48%. Malta Airport handled about 4.6 million passengers in 2015 and posted a profit of €7.29 million in the first half of last year. Since the privatisation of Malta Airport in 2002 Flughafen Wien AG has held a 57.1% stake in MMLC via its subsidiary VIE (Malta) Limited. Flughafen Wien AG also provides operating management for Malta Airport and directly holds a further 10.1% of the shares in Malta Airport through VIE (Malta) Limited. Before the transaction Flughafen Wien AG's total direct and indirect holding in Malta Airport equalled in 32.94%. The precise structure of Flughafen Wien AG holdings in Malta Airport will be disclosed upon closing. Vienna Airport, Austria's largest airport, handled 22.8 million passengers in 2015. Listed on the Vienna Stock Exchange, the company generated revenues of €630.2 million in 2014. In addition to its holding in Malta Airport, Vienna Airport also holds 66% of Kosice Airport in Slovakia. The airport site has over 230 companies with 20,000 employees, including approximately 4,400 employees just at Flughafen Wien AG, making it one of the largest employers in Eastern Austria. Money Market Report for the week ending January 29, 2016 ECB Monetary Operations On Monday, January 25, the European Central Bank (ECB) announced its weekly main refinancing operation (MRO). The operation was conducted on Tuesday, January 26, and attracted bids from euro area eligible counterparties of €68.96 billion, €3.77 billion higher 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, January 27, the ECB conducted a three-month, longer-term refinancing operation to be settled as a fixed rate tender procedure with full allotment, with the rate fixed at the average rate of the MROs over the life of the operation. The auction attracted bids of €13.56 billion from euro area eligible counterparties. The amount was allotted in full in accordance with current ECB policy. Also on Wednesday, January 27, the ECB conducted a seven-day US dollar funding operation through collateralised lending in conjunction with the US Federal Reserve. This operation attracted bids of $0.09 billion, which was allotted in full at a fixed rate of 0.84%. Domestic Treasury Bill Market In the domestic primary market for Treasury bills, the Treasury invited tenders for 91-day and 182- day bills maturing on April 28 and July 28, 2016, respectively. Bids of €29.00 million were submitted for the 91-day bills, with the Treasury accepting €17.00 million, while bids of €6.00 million were submitted for the 182-day bills, with the Treasury accepting €3.00 million. Since no bills matured during the week, the outstanding balance of Treasury bills increased by €20.00 million, to stand at €326.05 million. The yield from the 91-day bill auction was -0.151%, down by 0.1 basis point from bids with a similar tenor issued on January 21, 2016, representing a bid price of 100.0382 per 100 nominal. The yield from the 182-day bill auction was -0.120%, unchanged from bids with a similar tenor issued on January 21, 2016, representing a bid price of 100.0607 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 and 273-day bills maturing on May 5 and November 3, 2016, respectively.