Monthly Round up Report for June 2021: Banking equities drag MSE Index lower

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The MSE Equity Total Return Index extended the decline, as it ended June with a 1.3% change, reaching 8,056.532 points. A total of 22 equities were active during the month, three of which headed north while another 13 closed in the opposite direction. A further 15% decline in total monthly turnover was recorded as it stood at €1.7m.

The highest liquidity was recorded by Malta International Airport plc, as it generated a total monthly turnover of €0.36m. Price was up by 3.2%, as 57,295 shares changed hands across 54 transactions. The equity ended the month at the €6.40 price level.

In the banking industry, Bank of Valletta plc declined by 3.3%, as it closed at €0.88 – equivalent to a €0.03 change. A total of 59 deals involving 342,902 shares were executed, generating a total turnover of €0.3m across the month.

HSBC Bank Malta plc announced a strategic initiative to further improve its operational structure, benefitting from the HSBC Group’s operating models, in order to drive efficiencies and enhance customer experience. The bank is proposing the launch of two Voluntary Redundancy Schemes that will impact a limited number of areas in the bank, subject to MUBE agreement. The restructuring costs to deliver these changes will be booked in the 2021 financial results, but as the schemes are voluntary, the amount will depend on the number of applications.

The Bank recorded a 1.2% fall in price, as it ended the month at €0.80. This was the result of 111,314 shares spread across 48 transactions.

Lombard Bank Malta plc announced that the Bank capitalised €147,261.75 from its Retained Earnings account for the purpose of issuing 589,047 fully paid ordinary shares of a nominal value of €0.25 per share. The share capital has now increased from 44,177,914 shares to 44,766,961 shares of €0.25 each, fully paid up resulting in a paid-up capital of €11,191,740.25.

A double-digit decline of 14.4% was recorded, as it closed €0.32 lower at €1.90. A total of 15,780 shares changed hands over 13 deals.

FIMBank plc announced that Fitch Rating has published their latest rating on the Bank, downgrading the Long-Term Issuer Default Rating to ‘B’ from ‘B+’ and Viability Rating to ‘b’ from ‘b+’. In Fitch’s view, the downgrade reflects heightened pressures on the Bank’s business model, performance and capitalisation. Undoubtedly, last year was challenging for the Bank and the industry as a whole, but throughout the year, FIMBank plc maintained a strong CET1 capital of 18.5% and a Liquidity Coverage Ratio of 241% as at December 31, 2020.

The Bank head the list of fallers, as it closed 14.9% lower at $0.32. This was the outcome of six deals involving 86,100 shares.

Telecommunications company, GO plc, ended June 1.2% lower at €3.36, as 36 deals involving 43,824 shares were executed. Meanwhile, its subsidiary, BMIT Technologies plc was active but closed unchanged at €0.49. A total of 287,409 shares changed ownership across 34 transactions.

The board of RS2 Software plc approved the financial statements for the year ended December 31, 2020 and the directors’ and auditors’ report thereon. The equity declined by 3.5% to €1.92, as 13 deals involving 40,335 shares were executed.

Similarly, Simonds Farsons Cisk plc held its 74th Annual General Meeting, whereby the income statement and statement of financial position for the year ended January 31, 2021 and the reports of the directors and auditors were approved. A 3.3% negative change in price was recorded, as it reached the €8.70 price level – the result of 18,413 shares spread over 25 transactions.

Retail conglomerate, PG plc, was the best performer with a 7.6% movement in price. A total 13 deals involving 23,950 shares pushed the price €0.16 higher to €2.26.

Seven deals involving 27,026 International Hotel Investments plc shares left no impact on the previous month’s closing price of €0.65.

MIDI plc published the Financial Analysis Summary dated June 23, 2021. The purpose of the update is to summarise the key financial data in relation to the €50m bond issued in 2016. MIDI’s revenue forecast is positive as it is expected to generate revenue of €8.9m, up from €2.8m generated in 2020. Netting off other operating costs, the Company is expecting to register a positive EBITDA of €1.2m in FY2021.

MIDI is projecting a profit before tax of €0.5m, an improvement of over €2m on the loss generated in FY2020.  The composition of equity and liabilities is not expected to be materially different than that of FY2020.  Retained earnings will reflect the net loss for the year, while the Company’s composition of borrowings is expected to shift completely towards the longer-term, as the Company negotiated a new revolving facility whilst planning to settle its short-term facilities.

In FY2021, the cash ratio is expected to worsen even further, although the current ratio is expected to improve as a result of additional works which are capitalised in inventory, and the lower level of current borrowings expected by the end of FY2021.

A positive 5.7% change in price was recorded, as it closed at €0.37. A total of 260,346 shares changed ownership across 26 transactions.

Four deals involving 17,000 Malita Investments plc shares did not alter the previous month’s closing price of €0.86. Similarly, Malta Properties Company plc was active but closed unchanged at €0.54. A total of 127,774 shares changed hands across 22 transactions.

Meanwhile, Trident Estates plc lost 5.1%, to close at €1.48. Five transactions involving 12,878 shares were executed.

Tigne’ Mall plc made reference to United Finance plc’s announcement regarding the withdrawal of the Debenhams franchise under which the Debenhams stores operated in Malta and the consequent winding up of the local operations.  The termination of the lease was effective on June 30, 2021.

The Company announced that it has concurrently negotiated and entered into a new lease agreement in respect of the vacated premises with the Classic Group, a leading retail group operating an extensive portfolio of prestigious brands in Malta. This new lease commenced on July 1, 2021. The board is pleased to note that the demand for premium retail space within The Point Shopping Mall remains robust and that the mall remains fully let even during this challenging period.

The equity traded twice over 16,054 shares, leaving no impact on the equity’s previous month’s closing price of €0.75.

Plaza Centres plc’s annual report for the financial year ended December 31, 2020 including the financial statements and the directors’ and auditors’ reports thereon were received and approved. Also, a net dividend of €0.0157 per share, which represents a net amount of €400,000 as recommended by the directors, was also approved.

Three deals involving 5,800 shares dragged the price by 5.6% into the red. The equity ended the month at the €0.85 price level.

Harvest Technology plc was down by 1.9%, as 25,135 shares were spread across six transactions. The equity ended the month at €1.53. Similarly, Mapfre Middlesea plc closed 1.8% lower at €2.14, as 7,037 shares changed ownership across 14 transactions.

Five transactions involving 12,496 MaltaPost plc shares translated into a negative 3.2% change in price. The equity ended the month at €1.20. Likewise, Medserv plc traded 9.6% lower at 0.75, as 8,890 shares were spread over four deals.

Loqus Holdings plc was active but closed unchanged at €0.097 – despite trading at a monthly low of €0.062. Two deals involving 1,570 shares were executed.

In the Corporate Bond market, a total of 60 issues were active, 17 of which registered gains while another 31 closed in the red. The 4.85% Melite Finance plc Unsecured 2028 headed the list of gainers, as it closed 14.3% higher at €80.00. On the other hand, the 4.4% Central Business Centres 2027 Euro Unsecured closed 3.1% lower at €100.01.

In the Sovereign Debt market, out of 22 active issues, three traded higher while another 17 lost ground. The 2.4% MGS 2041 (I) was the best performer, as it closed at €125.50 – equivalent to a 2% change. Conversely, the 2.1% MGS 2039 (I) ended the month 9.6% lower at €115.66.

In the Prospects MTF market,16 issues were active. The 5.35% D Shopping Malls Finance plc € Unsecured 2028 was the most liquid, as it generated a total monthly turnover of €93,882.  

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

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