Issue link: https://maltatoday.uberflip.com/i/674824
maltatoday, WEDNESDAY, 4 MAY 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: Gold taps highs as dollar slides European markets slipped into nega- tive territory on Monday, dragged down by a weak session in Asia and a rough day in the banking sector. Activity in Europe was dulled by the absence of London, which was closed due to the May Day bank holiday. On Wall Street, US stocks struggled to make substantial headway, after a mixed set of manufacturing and construction data showed a slow but steady growth in the US economy af- ter a disappointing fi rst quarter. Japanese stocks fell sharply on Monday, causing a ripple effect across Asia. As the yen surged to a new yearly high against the dollar, this is impacting Japanese exports. Weak earnings results from several local firms, as well as a selling spree after the Bank of Japan's inaction on Thursday, are taking their toll on the market. Several banks started the month on the losing side on Monday. Italian banks were lower after the latest government measures aimed at tackling the sector's pile of bad loans fell short of expectations. Shares in Intesa Sanpaolo dropped 1.65% after the lender said it would sell its Setefi and Intesa Sanpaolo card payments units for a little over €1 billion in cash to a consortium of private equity funds as part of its strategy to focus on its core business. This led several other Italian banks trade lower. UniCredit tumbled 4.39% and Mediobanca surrendered 3.69%. However, Germany's Dax rose 0.8% after data showed factory activity in Europe's biggest economy rose to a three-month high in April, buoyed by rising demand at home and abroad. The automobile industry was broadly higher after some positive data for the sector. Ferrari shares traded higher, as the sports car maker raised its forecasts for 2016. The Italian company reported a rise in profit during the first quarter, thanks to growth in sales on its new sports car models. BMW and Volkswagen also traded in the green, and were up 0.50% and 0.16%, respectively. Also enjoying yet another positive session were precious metals. Nothing seems to be slowing down the gold market right now, amid renewed demand for stores of value. Gold futures headed higher for a sixth straight session, and surpassed $1,300 an ounce during Monday's session, but retreated slightly to close the day up 0.5% at $1,297. Shares in Apple dropped 0.96%, the eighth straight day of decline for the company. This fall came on the back of news that worldwide shipments of tablets fell 15% during the first quarter of the year as 'overall disinterest' for the product hit record highs. During the European Central Bank monetary policy meeting in March, it announced the planned buyback of an average of €80 billion worth of bonds per month, up from the previous target of €60 billion. This commitment was kept, as the ECB reportedly bought €85.2 billion of debt last month as it boosted purchases in its quantitative- easing programme. The ECB governing Council gathers for its next monetary policy meeting on June 2 in Vienna. This article was issued by Rebecca Naudi, Trader at Calamatta Cuschieri. For more information visit, www. cc.com.mt. The information, views 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 Investment Services Ltd. has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website. HSBC profi t falls victim of market 'uncertainty' Banking giant HSBC reported a 14% drop in profi ts for the fi rst quarter of 2016 following "extreme levels of volatility" in fi nancial mar- kets at the start of the year. Statutory pre-tax profits in the three-months to the end of March fell to €5.3 billion which the bank described as "a resilient performance despite challenging market conditions". However, analysts had expected a far steeper fall in profits. If currency movements and other one-off items were excluded profits fell 18% to €6.7 billion. Stuart Gulliver, the bank's chief executive, said: "Market uncertainty led to extreme levels of volatility in January and February, which affected our ability to generate revenue in our markets and wealth management businesses. However, our diversified, universal- banking business model helped to cushion the impact through growth in other parts of the bank". The dividend – which analysts fear could come under pressure – was held at 10c a share. The bank made 1,000 redundancies in the first quarter as global admin roles were cut back, but was forced to hire another 536 staff in regulatory compliance, as well as 1,357 staff charged with cutting back other parts of the business. The chief executive said: "All of our cost-reduction programmes are now under way and we have a good grip on operating expenses. We are confident of hitting our cost target by the end of 2017." However, the bank was hit by extra costs from commodities companies that are suffering from falling oil, gas and minerals prices. Ahead of the results, analysts had warned HSBC might signal an end to its highly-valued progressive dividend, which delivers ever- increasing payouts. However, HSBC maintained the progressive target and left its dividend unchanged from the same period last year at $0.10. The bank also announced that the €4.5 billion sale of its Brazil unit to banking giant Banco Bradesco received preliminary approval from competition regulators. Swiss bank UBS also reported a sharp drop in income for the first quarter of the year, with pre-tax profit falling 64% year-on-year to €900 million. UBS pointed to "substantial volatility" as one of the main reasons for the fall, along with wider economic and geopolitical uncertainty. However, French bank BNP Paribas reported a 3.4% rise in first-quarter pre-tax income to €2.6 billion. Summer starts early for MIA as it sees 5.7% passenger increase in April Malta International Airport wel- comed 415,409 passengers last April, marking a 5.7% growth over the same month in 2015, and kick starting the busy, sum- mer months ahead. In a statement, the airport said that this figure is comparable to the passenger numbers registered in the August peak of 2011 (427,575 passengers), just five years ago. "April's growth partially resulted from the launch of the airport's summer schedule, featuring new routes, airlines, and increased flight frequency to a number of destinations, which contributed to a seat capacity growth of 3.8%," the statement reads. They added that the top five traffic drivers for April remained largely unchanged from the previous months, with the United Kingdom holding on to its top spot, followed by Italy, Germany, and France. However, according to figures, Poland presented an exception, placing fifth in the airport's top markets list with its 27.3% growth over the previous year. The increase is being linked to the introduction of the new Poznań route towards the end of March and an increased flight frequency to Gdansk. "All of this falls in line with stepped-up efforts by the Government, the Malta Tourism Authority, and Malta International Airport to continue to develop the Island's network with the Eastern European market," the airport adds. Figures for the first four months of 2016 show a record number of passenger movements at Malta International Airport, with over 1.2 million guests having passed through, up by 12% compared to 2015. Malta International Airport sees 5.7% passenger increase in April compared to 2015