BOV shares gain 4.5%

Monthly Round up Report for June 2022

The MSE Equity Total Return Index (MSE) fell further, as it ended June with a 0.9% decline to close at 7,716.967 points. Activity doubled when compared to May, as turnover reached €4m over 676 deals. A total of 31 equities were active, 24 of which traded lower, while five gained ground. Since the beginning of the year the MSE is down by nearly 6%.

Bank of Valletta plc (BOV) was one of the two gainers in the banking sector, having advanced by 4.5%, as 394,931 shares changed ownership across 87 transactions. BOV closed the month €0.04 higher at €0.93. During the second quarter, BOV was the best performing equity, as it gained €0.16 or 21%.

Meanwhile, on June 20, trading commenced in the newly listed shares of APS Bank plc.The share price appreciated by 6.5% to end the month at €0.66. The banking equity registered the highest turnover in June, as 208 transactions worth €1.3m were executed.

FIMBank plc surrendered the previous month’s gain, as it registered a decline of 4.6%, to close at a price of $0.21. Trading volume amounted to 16,696 shares across five transactions.

HSBC Bank Malta plc (HSBC) added on its losing streak, as 48 deals involving 352,344 shares dragged the equity 0.7% lower. HSBC ended the month at the €0.765 price level.

During the month, HSBC reported a profit before tax of €4.8m for the first quarter of the year, down by €5.1m compared to the €9.9m profits reported in same period last year. The decrease is a result of lower profit reported by the insurance subsidiary of €4.9m, reflecting the unfavourable market impact. Revenues were €6.2m lower than those reported in the first three months last year and net interest income decreased because of tighter margins and an increase in cash placements at negative rates.

The bank reported improvements in net fee income driven by increased activity across cards and payments and a strong performance in foreign exchange income. Expected credit losses were broadly maintained at the levels booked as at end of 2021. A marginal release was booked for the retail business in view of the improvement in customers’ performance.

The bank continued to implement effective cost management discipline resulting in lower operating expenses of €1.1m than those reported in the same period in 2021. Cost savings continued to be realised through the implementation of the prior year’s transformation programme. Lower regulatory fees also contributed to the reduction in expenses.

Net loans and advances to customers were marginally lower than those reported as at December 31, 2021. Customer deposits increased by €122m compared to December 31, 2021. The bank’s liquidity position remained strong and regulatory capital ratios continued to exceed regulatory capital requirements.

The worst performer among the listed banking equities was Lombard Bank Malta plc (LOM), as it extended its losing streak with a 7.1% decline. The equity closed the month at €1.70, as 10 transactions of 41,251 shares were recorded.

The board of LOM held its AGM on May 26, 2022 wherein the bank’s bonus issue resolution was approved. The bank capitalised €149,226.50 for the purpose of issuing 596,906 fully paid ordinary shares of a nominal value of €0.25 per share, representing one bonus share for every 75 shares. The bank thereby increased its issued share capital from 44,766,961 shares to 45,363,867 of €0.25 each fully paid up, resulting in a paid-up capital of €11,340,966.75. 

Malta International Airport plc (MIA) declined by 0.8%, as 34 trades of 40,596 shares were executed. MIA closed the month at €5.95. However, the equity’s quarterly performance was a 5.3% gain.

During the month, the company announced that it continued to observe signs of a comeback in air travel, with May becoming the second consecutive month to surpass the half-a-million passenger mark. A total of 554,820 passengers travelled through MIA last month, translating in a recovery of 82.3% of pre-pandemic figures, as more travel requirements were lifted by the Maltese authorities. Additionally, most of the countries that are directly connected to MIA have now completely removed their travel requirements for passengers coming from a European Union or Schengen country.

Last month’s seat occupancy was the highest MIA has registered in the past two years, indicating a further release of the pent-up demand for air travel.

Italy continued to lead the way in terms of market popularity, accounting for 121,120 passengers out of May’s total traffic. The United Kingdom, France, Germany and Poland too retained their rankings from the previous month.

MIA also announced that the European Commission has approved a €12m Maltese aid measure to compensate MIA for the losses suffered due to the coronavirus pandemic. This measure aims at compensating MIA for the material losses suffered during the period between March 21, 2020 and June 30, 2020 due to the coronavirus pandemic and the travel ban imposed by Malta to limit the spread of the virus. MIA registered year-on-year traffic growth in the decade leading to 2020, which culminated in a record of 7.3m passenger movements in 2019. This figure was slashed by the COVID-19 pandemic, with the airport having ended 2020 with just 1.7m passenger movements, which is roughly equivalent to the traffic handled by the same airport in the first four months of 2019. While 2021 brought an improvement of 45.3% over 2020 traffic, passenger numbers remained 65.2% below pre-pandemic levels.

International Hotel Investments plc depreciated by €0.08 or 11.4%, as 159,632 shares changed hands over 20 transactions. The equity is back to the €0.62 price level and has now erased all previous year-to-date gains.

The best performer for June was MedservRegis plc, as its share price soared 41.4% to reach €0.99, the highest price since April 2020. In total, 140,000 shares were traded over seven deals.

The board of MedservRegis plc announced the approval of the audit consolidated financial statements of the Company for the year ended December 31, 2021. The board resolved that the annual report be submitted for the approval of the shareholders at the forthcoming AGM on July 28, 2022.

The group registered a total revenue of €30m for 2021, up by €18.8m when compared to the previous year. Adjusted EBITDA amounted to €5.3m for the year as compared to a negative €4m in financial year 2021. The group recorded a smaller loss after tax of €7.2m versus the €12.7m loss declared in 2020.

Following the publication of its annual audited financial statements for the period ending December 31, 2021 the suspension of trading for MedservRegis plc’s listed securities has been terminated. 

The IT sector was dominated by selling pressure, as all four active equities declined. Harvest Technologies plc headed the list, as the equity declined by 18% to €1.22. A total of 9,115 shares changed ownership over nine transactions.

BMIT Technologies plc extending its losing streak to three months. The equity eased another 1.3% to €0.47, on 123,136 shares over 13 deals.

RS2 Software plc Ordinary (RS2) and preference shares (RS2P) followed suit with a loss of 4.3% and 4.7%, respectively. RS2 shares were active across 20 deals of 52,425 shares, ending the month at €1.57. Meanwhile, a total of 12,500 RS2P shares exchanged ownership across five transactions, closing June at €1.60.

VBL plc was the best performing equity in the property sector and the second-best performer overall. The equity added 8% to the previous month’s gain, finishing at €0.27. This was the outcome of just 33,500 shares traded across three deals.

Similarly, the share price of AX Real Estate plc (AXR) gained 0.9%, as 172,557 shares exchanged hands across 15 transactions. The equity finished the month at the €0.55 price level.

The board of AXR declared and resolved to distribute a net interim dividend of €3.4m, equivalent to a net dividend of €0.0125 per ordinary share, which will be paid on July 15, 2022.

Furthermore, the board approved the financial results for the six-month period ended April 30, 2022. During the period under review, the group registered €4.4m in total revenue. This was primarily made up of €3.6m in rental income and €0.7m from the sale of property. As at April 30, 2022 practically all properties available for rent were leased out.

Rental income from AX Group and related parties accounted for €3.3m, representing 90% of the rental revenues generated by the group. Operating costs amounted to €0.9m, and are primarily made up of €0.5m representing the cost of property sold, and administrative overheads of €0.4m. Staff costs including directors’ remuneration amounted to €0.2m. During the period under review, the group registered an operating profit of €3.4m, representing a margin of 77% over total revenue. Finance charges, including the interest on the newly issued 3.5% AX Real Estate plc 2032 bond, amounted to €1.6m. Profit before tax during the period under review amounted to €1.7m.

On the other hand, Santumas Shareholdings plc registered an 8.3% decline, closing the month at €1. This was a result of 10,131 shares executed across three deals.

Malita Investments plc recorded just two deals of 18,000 shares, which shaved 8.2% of the share price, to €0.725.

Hili Properties plc also traded on slim volume, as six trades of just 22,500 shares were executed. The equity closed flat at €0.24.

Malta Property Company plc shares oscillated between €0.494 and €0.545, ultimately closing 3.9% lower at €0.50. The equity was active on 20 transactions of 47,467 shares.

The company announced that it has been granted approval by the MFSA for the admissibility to listing on the official list of the MSE of a bond issuance programme of up to €50m in one or more tranches up till June 1, 2023.

MIDI plc posted a loss of 6.9% to reach €0.35. A total of 45,173 shares were exchanged across six transactions.

Trident Estates plc turned red, as it declined by 2.1% to reach €1.43. Trading volume totaled 22,443 shares over eight deals.

The worst performer was Loqus Holdings plc, as it declined by 52%. The equity closed the month at €0.091, as a result of a sole transaction of just 861 shares.

Grand Harbour Marina plc shares fell by 2.8%, as two deals of 16,500 shares were negotiated, to close at €0.70.

M&Z plc shares partially erased May’s 2.7% gain, having declined by 2% during the month of June, as eight transactions of 93,950 shares were negotiated, to close at €0.755.

Meanwhile, Main Street Complex plc shares closed unchanged at €0.40, despite having reached a monthly low of €0.352. The shopping complex company was active on four deals of 16,750 shares.

PG plc shares slipped by 3.6% over 12 trades of 56,913 shares, closing at €2.16.

In the food and beverage sector, Simonds Farsons Cisk plc (SFC) drifted 12.7% to a price of €7.20. The equity reached a monthly low of €7, a price last seen in November 2020. A sizeable turnover of €689,183 was generated across 66 trades.

SFC resolved to recommend for the approval of the AGM the capitalisation of €1.8m from the company’s retained tax-exempt earnings for the purpose of issuing up to 6m fully paid-up ordinary shares of a nominal value of €0.30 per share, representing one bonus share for every five shares held.

The MFSA approved the application for admissibility to listing of 6m ordinary shares of a nominal value of €0.30 per share as well as the proposed changes to the Memorandum and Articles of Association.

Tigne Mall plc shares declined by €0.05 or 7.1% over five trades of 12,931 shares, closing at €0.65.

Mapfre Middlesea plc shares lost a further 6.2%. The equity ended the month at €1.81, as six deals of 5,042 shares were recorded.

Telecommunications company, GO plc joined the list of fallers, as it declined further with a 2.5% negative movement in price. A total of €299,196 were traded across 35 deals, resulting in the equity closing at €3.10.

MaltaPost plc fell by 1% across four transactions of 5,941 shares, to close at €1.01.

LifeStar Holdings plc shares closed 4% lower at €0.95, despite having reached a monthly low of €0.20. The equity was active on four deals of 1,716 shares.

In terms of IPO activity, Mediterranean Investments Holding plc announced that the €30m 5.25% unsecured Bonds 2027 has been heavily oversubscribed with applications received exceeding €50m in total value.

BNF Bank plc announced the issuance of a new €15m unsecured subordinated bonds with a coupon of 4.5% and maturing in 2032 with a call option from the fifth anniversary onwards. The issuer will have an over-allotment option of an additional €5m if the bond is oversubscribed. This bond offer will be available from July 7, and will close on July 22, 2022 or earlier.

The MSE Corporate Bonds Total Return Index lost 0.1% during the month of June, to finish at 1,144.163 points. A total of 66 issues were active, with total turnover reaching €8.4m. The 3.5% GO plc € Unsecured 2031was the most liquid corporate bond, as 97 trades worth €1.4m were recorded.

The MSE MGS Total Return Index recorded a significant decline of 5.3% to close at 931.309 points. A total of 21 government bonds were active, with the 5.25% MGS 2030 (I) being the most liquid, as 16 trades worth a total of €3.2m were recorded.

In the Prospects MTF market 18 issues were active, with total turnover tallying to €0.24m spread over 56 deals. The 5% Busy Bee Finance plc Unsecured € 2029 was the most liquid, and generated a total monthly turnover of €44,000 to close at par.

This article, which was compiled by Jesmond Mizzi, Managing Director of Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member Firm of the Malta Stock Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information, contact Jesmond Mizzi Financial Advisors at 67 Level 3, South Street, Valletta, or on Tel: 21224410, or email jesmond.mizzi@jesmondmizzi.com