Monthly Round-up Report for June 2020: MSE Index gains 1.6%

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The MSE Equity Total Return Index erased May’s 0.85 per cent loss, having advanced by 1.6 per cent, to close at 8,347.534 points. Turnover amounted to €4.3 million – spread across 24 equities, of which 13 appreciated and seven fell.

RS2 Software plc (RS2) shares registered the best performance, having surged by 23per cent, as 494,225 shares changed ownership across 145 deals, closing €0.45 higher at €2.40. This positive performance was a result of the fact that one of the company’s subsidiaries has concluded a major processing outsourcing agreement, with one of the largest acquirers in the US for a ten-year term with the option to renew. RS2’s Annual General Meeting (AGM) shall be held on July 30, 2020.

BMIT Technologies plc (BMIT) shares increased by 2.5 per cent, across 74 transactions of 610,673 shares, to close at €0.49. BMIT’s AGM shall be held on July 27, 2020 – at which the annual report and financial statements for the year ended December 31, 2019 shall be approved.

During the month, BMIT issued an announcement referring to an article that appeared in the media wherein it was stated that all major company investments are being re-evaluated.  The company reiterates its position that in view of the current situation, the board of directors and management of the company will continue to re-evaluate all major investments regularly and any final decision to postpone or otherwise reconsider any major investment will be communicated to the market accordingly.

Harvest Technology plc shares closed unchanged at €1.49. The equity witnessed seven deals of 9,001 shares.

Bank of Valletta plc shares added on to May’s 2.9 per cent loss, having declined by another two per cent. The banking equity was active over 126 trades of 601,621 shares, closing at €1. Meanwhile, HSBC Bank Malta plc shares fell by €0.04 or four per cent, as 172,784 shares changed hands across 51 transactions, to close at €0.95.

FIMBank plc shares increased by five per cent, over 11 deals of 104,644 shares, closing at $0.42.

Lombard Bank Malta plc shares advanced by €0.04 or 1.9 per cent, as 18 trades of 51,891 shares were negotiated, to close at €2.10.

MaltaPost plc shares rose by 1 per cent, across 14 transactions of 25,782 shares, closing at €1.18. The local postal services provider announced that regulatory approval has been received for a proposed change in the shareholding structure of Untours Insurance Agency Limited and which will effectively result in MaltaPost plc acquiring 49 per cent of the share capital of Untours Insurance Agency Limited.

Malta International Airport plc (MIA) shares closed unchanged at €5.80, despite having reached a monthly high of €6, and a low of €5.60. The airport’s shares were active on 168 trades of 133,361 shares.

MIA announced the traffic results for the month of May. Due to the COVID-19 pandemic and consequent travel ban, it was an unusually quiet month, with just 3,081 passengers. This translates into a decrease of more than 670,000 passenger movements when compared to May 2019. As air traffic to and from Malta remained at an almost complete standstill for the second full month, aircraft movements throughout May amounted to merely 283 take-offs and landings. For the month of May, 43 per cent of the flights were humanitarian and repatriation, ferrying passengers to and from more than 10 countries. The rest were cargo flights, which registered an increase of 11 per cent in movements over the same month last year.

The airport resumed operations on July 1, 2020. Six airlines are now offering direct connections to 17 airports in nine countries and regions, including Sicily, Germany, Switzerland and Luxembourg, for the period between July and October.

GO plc shares recorded a decrease in its share price for the fourth consecutive month. The telecommunications services provider’s shares fell by €0.14 or 3.9 per cent in June – as 138,828 shares were concluded over 82 transactions, to close at €3.50.

GO announced that the Board of Cablenet Communication Systems Limited, a Cypriot telecommunications provider operating in and from Cyprus and in which the company holds 60.26 per cent of the issued share capital, has authorised the submission of an application for authorisation for admissibility to listing to the Listing Authority. The application is requesting the approval of a prospectus in relation to the proposed public issue of the bonds in Malta of 4% unsecured bonds with an aggregate principal amount of up to €40,000,000. Application will be made, in respect of the bonds, to the Malta Stock Exchange for their admittance to the Official List and for trading to commence thereafter.

GO’s board agreed to recommend to the AGM, to be held on July 28, the approval of the payment of a dividend of €0.10 (net of taxation), revised down from the original announcement wherein the company had stated that it would propose a dividend of €0.14 (net of taxation). The final dividend for the year ended December 31, 2019 will be paid on July 30, 2020 to all shareholders on the shareholders’ register as at April 30, 2020.

The oil and gas logistics services provider Medserv plc, registered a decline in price for the seventh consecutive month. The equity fell by 1.4 per cent on seven deals of 29,050 shares, closing at €0.69.

Total revenue for the year ended December 31, 2019 amounted to €68.73 million, as against a forecast of €64.22 million. Such increase is mainly attributable to the nearshore drilling project in Suriname which ended prematurely in December 2019.

After deducting the net finance costs amounting to €5.64 million, the group registered a loss before tax of €2.55 million, versus an €8.83 million loss before tax recorded in 2018. The Group registered negative earnings per share of €0.054 versus a negative earnings per share of €0.168 during the previous year.

Medserv also published its interim report for 2020. Revenue for the first quarter of year 2020 was 29.6 per cent lower than that the previous year’s figure. Such loss in revenue was expected to be recovered from the new drilling projects that were scheduled to commence in Cyprus in the second quarter of year 2020. Due to the Covid-19 pandemic, this was postponed, resulting into the company revising downwards its budget revenue for the year 2020 to €26.5 million. Moreover, EBITDA for 2020 is estimated at €5.5 million, adjusted to reflect the impact of the postponement of drilling.

In addition Medserv was notified that an agreement was entered into by and between, on the one part, Mr Anthony S. Diacono (31.17 per cent present shareholding) and, on the other part, Malampaya Investments Limited (34.33 per cent present shareholding), which is wholly and beneficially owned by Anthony J. Duncan. Each of the parties granted to each other the option to acquire their shareholding in the company. This option is only triggered on the demise of either Anthony S. Diacono or Anthony J. Duncan (whichever occurs first) and is exercisable for a period of one year thereafter. The rationale behind this agreement is to further strengthen the succession plan of the two major shareholders and to ensure a smooth transition should this unfortunate event take place at a time when they are still major shareholders in the company.

The investments and insurance services provider Mapfre Middlesea plc, recorded a 3.5 per cent decline in its share price, having slipped by €0.08 on 10 transactions of 10,896 shares, closing at €2.20.

In the same sector, GlobalCapital plc shares traded flat at €0.33, as one deal of 5,600 shares was concluded.

Santumas Shareholdings plc shares appreciated by €0.13 or 9.6 per cent, across three transactions of 863 shares, closing at €1.49.

PG plc shares registered no change in its €1.95 share price. The retail and supermarkets owner’s shares were executed across 14 trades of 44,110 shares. The Board of the company shall be meeting on July 9, 2020, to consider and, if deemed fit, approve, the distribution of an interim dividend for the financial year ended April 30, 2020.

International Hotel investments plc (IHI) shares increased by nearly 1 per cent, over 24 transactions of 51,892 shares, closing at €0.59. The company has recorded a profit after tax of €5.1 million for the year ended December 31, 2019, translating into a 39.5 per cent decline from the previous year’s figure. Earnings per share decreased by €0.00007 as they amounted to €0.00011 in 2019.

During the month IHI announced that it entered into arrangements with a third party investor to develop and eventually lease a prime property in Rome. The property is the former headquarters of the Bank of Italy and will be transformed into a luxury Corinthia Hotel. Moreover, Development work on the Corinthia Hotels in Bucharest, Brussels and Dubai has proceeded in 2019, and works on site in Moscow, Rome, and Doha have commenced in 2020.

Malta Properties Company plc shares advanced by €0.055 or 10.2 per cent, across 25 deals of 146,162 shares, to close at €0.595.

Meanwhile, MIDI plc shares fell by 5.9 per cent, as 23 transactions of 144,900 shares were concluded, closing at €0.386.

Malita Investments plc shares closed in positive territory for the third consecutive month, having appreciated by 2.3 per cent, over 11 trades of 53,408 shares, to close at €0.91. The company’s AGM is scheduled to be held on July 29, 2020 to consider and, if deemed fit, approve the annual report and financial statements for the year ended December 31, 2019.

Trident Estates plc shares declined by a minimal 0.7 per cent, across two deals of 3,307 shares, closing at €1.54.

Simonds Farsons Cisk plc (SFC) shares partially recouped May’s 3.6 per cent loss, having advanced by 2.5 per cent. The food and beverage supplier’s shares were negotiated across 44 transactions of 24,283 shares, to close €0.20 higher at €8.20.

SFC has notified the MFSA about its intention to avail itself of the two-month extension granted in terms of the Circular for the publication of its forthcoming Financial Analysis Summary (FAS) update.  At this time there exists little clarity and limited forward visibility as to the timing and nature of any amelioration to the current crisis being faced by businesses. The company believes that an extension in the date for the publication of the FAS to not later than September 27, 2020 will enable it to obtain a greater degree of visibility of the impact on market conditions, as travel and other restrictions are lifted. This will therefore provide a better basis for the updating of the forecasts for the financial year ending January 31, 2020.

Tigne’ Mall plc shares fully recouped May’s 8.2 per cent decline, having appreciated by nine per cent, on five trades of 99,722 shares, to close €0.07 higher at €0.85.

Plaza Centres plc shares increased by a further 5.1 per cent, across 15 deals of 97,630 shares, closing at €1.03. The company announced that it has decided to proceed with the payment of a net dividend of €320,000 or €0.0113 per share. The dividend will be paid on August 4, 2020 to those shareholders included in the shareholders register as at June 26, 2020. This decision will then be submitted for the confirmation of the shareholders at the AGM that will be held when circumstances allow.

In the same sector, Main Street Complex plc shares advanced by 15 per cent, as six trades of 10,950 shares were concluded, to close €0.074 higher at €0.57. The company’s AGM is scheduled for July 29, 2020. The directors resolved to recommend to shareholders the payment of a final net dividend of €0.00831 per share. If approved, the final net dividend will be paid on July 31, 2020.

Grand Harbour Marina plc announced that it has notified the Malta Financial Services Authority of the company’s intention to avail itself of the two-month extension granted, in terms of the Circular, for the publication of its forthcoming Financial Analysis Summary (FAS) update.  The company expects to publish the FAS by not later than August 27, 2020.  This will allow for a better updating of financial forecasts for financial year ending December 31, 2020. The equity was not active in June.

In the corporate bond market, 59 issues were active, of which 44 increased and nine fell – amounting to a turnover of €7.6 million. The 4% IHI plc Unsecured € 2026 registered the best performance, having advanced by 10.7 per cent, to close at €101.50. Meanwhile, the 5% Tumas Investments plc Unsecured € 2024 was the worst performer, having declined by 2.9 per cent, closing at €100.

In the sovereign debt market, turnover amounted to €6.1 million, and was spread across 20 issues, of which 15 declined and four gained ground. The 4.5% MGS 2028 (II) was the most liquid issue, having witnessed a turnover of over €1 million, to close one per cent lower at €132.12.

This article, which was compiled by 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 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 Limited at 67, Level 3, South Street, Valletta, or on Tel: 2122 4410, or email info@jesmondmizzi.com