MSE Index ends the year in positive territory

The building of the Malta Stock Exchange in Valletta. (source: Wikimedia Commons/Frank Vincentz)

Last Updated on Friday, 7 January, 2022 at 8:52 am by Andre Camilleri

Monthly Round up Report for December 2021

The MSE Equity Total Return Index registered a positive 5.2% increase, as it reached 8,199.397. A total of 26 equities were active, 13 of which headed north, while another eight closed in the opposite direction and five remained unchanged. Total monthly turnover increased by over 70 thousand to €1.9 million, as 468 transactions were executed.

This month, MIDI plc was the best performer overall and in the properties sector. MIDI closed 33.5% higher at the €0.43 level. This increase was not enough to reach 2020’s closing price, as the share price closed 4% lower. The equity generated a total of €33,561.40 in turnover as a result of eight transactions of 84,000 shares.

Tigne Mall plc was the most liquid equity in the properties sector, as it generated €69,678.88 in turnover. The equity was up by €0.05 after 98,250 shares traded across 12 deals, closing at €0.75. This reflects a 7.1% increase month on month but an 11.8% decrease year on year.

Similarly, both International Hotel Investments plc (IHI) and Plaza Centres plc (PZC) advanced from the previous month but declined when compared to last year.

During the month, the company announced that the recently issued 3.65% Unsecured Bonds 2031 was marginally over-subscribed. The Company received applications for an aggregate amount of €81.2m.

IHI added that, as the travel industry worldwide shows signs of recovery, the company witnessed an increase in demand, revenue generation and profitability in the second half of the year, relative to 2021 year-end forecasts published earlier in the year. The company had announced, when publishing its financial analysis report in October 2021, that it was expected to generate a €15m EBITDA for the full year of 2021. With actual results now in hand up to November, the company is forecasting EBITDA for the year to exceed €24m, relative to the €3.8m EBITDA loss for 2020.

IHI registered an increase of 6% to close at the €0.62 level. This was a result of 18 transactions involving 82,782 shares.

PZC shares partially erased the previous month’s 9.6% loss, having increased by 3.3% over two trades of 16,250 shares, to close at €0.93.

On the other hand, Malta Properties Company plc shares fell by 1.8% or €0.01, however still managed advance by 10% compared to the previous year. The equity was active on 14 transactions of 64,410 shares, to close at €0.55.

Malita Investments plc retracted 0.6% to settle at €0.80. The equity traded nine times as 32,334 shares changed ownership.

Meanwhile, VBL plc shares closed unchanged at €0.30, as three transactions of 11,600 shares were concluded. Despite closing flat, the equity advanced by 7.1% during the year.

VBL plc announced that it sold 100% of the shares of Casa Rooms Limited. The sale of Casa Rooms Limited happens after integration of its core-Valletta related business into the VBL Group thus keeping the focus and main activity of the VBL Group, which is exclusively focused on the capital city of Valletta. This transaction only concerns the sale of the operations outside of Valletta and therefore, VBL Group will retain any and all rights to the management contracts of Casa Rooms Limited related to Valletta which have been already re-contracted by the Group.

Bank of Valletta plc was the most liquid equity in the financial sector and overall. The equity witnessed a turnover of €385,663.41 as a result of 445,351 shares traded across 93 transactions to close at €0.90. The equity closed December 5.9% higher, however registered a 5.3% loss for the year.

During the month, the board of BOV declared the payment of an interim dividend of €0.0264 gross per share or €0.01716 net of tax, subject to regulatory approval. The dividend will be paid on January 28, 2022 to those members appearing on the Bank’s register of members, as at the close of business on January 13, 2022.

Mapfre Middlesea plc and FIMBank plc both ended the month on a similar note. The equities recorded a gain of 4.6% and 17.2%, respectively, and close at €2.30 and €0.34. Both these gains weren’t enough to beat the year’s opening price and fell by 6.5% and 32% during 2021.

LifeStar Holding plc was the best performer in the financial sector. LifeStar registered an increase for two consecutive months, after closing 25% higher at €1.00. The equity rallied up by an impressive 100% since last December.

HSBC Bank Malta plc shares climbed by €0.09, as 64 transactions of 275,951 shares were concluded, to close at €0.92, registering a 10.8% gain in December and a 2.2% increase in 2021. 

The bank announced that it has entered into a €60m loan agreement with HSBC Bank plc. The purpose of the loan is to enable the Bank to meet the interim targets for minimum requirement for own funds and eligible liabilities as set by the Single Resolution Board.

Lombard Bank Malta plc shares traded flat at €1.95 on 11 trades of 7,731 shares. The bank’s shares stumbled by 17.4% in 2021.

LifeStar Insurance plc shares remained afloat this month, maintaining the €0.50 price level, with a total turnover of €575 spread over three transactions of 1,150 shares. The share price fell by 7.4% from year to year.

RS2 Software plc ordinary shares were the best and the only equity to close in positive territory across the IT services sector. RS2 climbed 3% to €1.74 as a result of 24 transactions of 37,492 shares. The equity generated a total turnover of €63,732.26. On the other hand, RS2 Software plc preference shares headed south after one trade of 2,000 shares – dragging the share price to the €1.65 level, 2.9% lower. The equities registered a year on year negative performance of 13% for the ordinary shares and 11.3% for the preference shares.

This week RS2 updated the market with the group’s performance since the beginning of the year and expectations for the next financial year. In 2021, RS2 added new countries to its client base in both Asia Pacific (APAC) and Latin America (LATAM). In APAC, the group is engaged in deploying new customers on its cloud in Singapore, Indonesia and Australia, while in LATAM the group increased its customer base in Brazil as well as Columbia.

The company added that the 2021 financials show strong top line growth, with existing business matching the published projections, despite imposed lock downs. Overall top line numbers will be delayed, primarily due to a delay in the launch of the Independent Sales Organisation (ISO) business in the United States. The ISO business sells payment services to merchants on behalf of banks and financial institutions. The delay was caused by a decision taken by a sponsor bank, which the group had an agreement with, to exit the acquiring business entirely. The company added that the US subsidiary has successfully secured a new sponsor, allowing the company to execute the ISO business in Q1 2022.

The launch of the group’s financial services sector, following the successful acquisition of its EMI license, had to be moved to the first quarter of 2022 due to unexpected circumstances related to terminal certification.

The company added that with the on boarding of new clients, RS2 has more than doubled the volume of transactions processed on the RS2 Smart Processing platform during 2021 when compared to those processed in the recent past. This increase is expected to continue to progress with a gradual increase from RS2’s current clients as well as the on boarding of new clients.

RS concluded that despite the delays in expected revenue, all other projected revenues were met, which thereby allowed the group to turn around the financial performance for the year into a respectable profit.

Harvest Technology plc shares fell by a marginal 0.7%. The equity’s shares were active on four transactions of 10,129 shares and closed at €1.45, recording a 2% decrease for the year.

GO plc shares registered a decline of 0.6% to close the month at €3.36, as 22 transactions of 29,238 shares were executed. The telecommunications service provider traded 5.1% lower than the previous year. It’s subsidiary, BMIT Technologies plc, stumbled by €0.016 or 3.2%, thus reversing all of the 2.5% gains registered in the previous month. In total, 49 transactions were executed over 418,020 shares, to close at €0.48, having recovered from a monthly low of €0.472. A turnover of €200,659 was generated, making it the most liquid equity in the IT services sector.

One transaction of 1,000 Santumas Shareholdings plc shares kept the share price unchanged at the €1.18 price level. The equity ended the year 15.1% lower. Grand Harbour Marina plc slid by 1.5% to the €0.68 level as a result of one deal on trivial volume. The equity continues to decline year on year and closed 2.9% lower.

The share price of Simonds Farsons Cisk plc kept increasing and advancing by 13.5% in December and 23.7% in 2021. The food and beverage company’s shares were traded across 17 transactions involving 4,662 shares, generating a turnover of €39,198.80.

During the month, SFC announced that it has resolved to distribute a second interim dividend of €1.5m or €0.05 per ordinary share, from tax-exempt income. This dividend will be paid on December 21, 2021 to the ordinary shareholders who will be on the shareholders’ register as at close of business on December 15, 2021.

MaltaPost plc registered a 1.7% gain, closing at €1.22. The postal operator’s shares witnessed 11 trades of 71,385 shares. December’s gain in share price was not enough to recoup to the €1.33 level, ending 2021 8.3% lower.

Later in the month, the company approved the audited financial statements for year ended September 30, 2021. These will be submitted for approval at the AGM which will be held remotely on February 16, 2022.

Revenue increased by 11% to €37.9m when compared to €34.1m last year. Total expenses also increased to €35.8 compared to €31.7m in 2020, driven by increases in international postal tariffs as well as significant increases in airfreight costs. The company recorded a pre-tax profit of €2.4m, a decline of 15% when compared to 2020. Earnings per share remained constant, and as a result the board of Maltapost plc proposed a final dividend of €0.04 per share.

MedservRegis plc traded flat last month, as 8,000 shares were executed over four deals.  The equity registered a decline of 17.7% during 2021 closing at €0.65.

The company published an interim report to update the market with regards to their business operations. The company explained how the pandemic resulted in most of the offshore drilling activity being suspended from the second quarter of 2020, due to the inability to provide a safe working environment, travel bans and closure of ports. During the period under review, the largest contributor to MedservRegis plc’s EBITDA was the Oman division. This is expected to slow down as a consequence of a force majeure event declared earlier in the year by a major international energy company operating in the northern province of Cabo Delgado.

The Company has identified significant growth potential in all its operating markets. Drilling in Cyprus resumed in the last quarter of this year and the order book for the Middle East remains strong for 2022.

During the second half of this year, the company signed a strategic alliance agreement with DP World Paramaribo Suriname, with a view to recommencing operations in that country as potential future growth has been identified. The company continued to secure work in the second half of the year and expects to be awarded new contracts going forward.

The company added that in a forecast published by the Economist Intelligence Unit, global energy consumption will rise by 2.2%, reaching 13,410 million tonnes of oil equivalent. This figure is higher than that recorded in 2019, compensating for the decline in consumption seen during the pandemic. The oil price stability above $70 per barrel during the past six months, as well as the recent tensions in the gas market are expected to foster additional investments by the international energy company.

With contracts and resources in place, the company added that it is well-placed to benefit from the rebound of the exploration and production activities in all markets where it operates.

MedservRegis plc has started implementing its integration plan, resulting in synergies in operations as well as identifying cross-selling opportunities within the core competencies of the company. Furthermore, the company is evaluating options and is in discussions to reduce the company’s debt.

The company’s strategy remains that of sustainable growth and returning to profitability. The company concluded that the transaction with the Regis Group has significantly improved both the net cash and equity to debt position of the company.

The retail and supermarkets owner PG plc recorded a 0.8% drop in its share price, as 66,855 shares changed hands across 18 deals, closing at €2.40. The equity has rallied by an impressive 20% throughout 2021.      

The board of PG plc resolved to distribute a net interim dividend of €2.25m, equivalent to €0.0208 per ordinary share. This dividend was paid on December 10, 2021 to the ordinary shareholders who were on the company’s register as at close of business on December 2, 2021.

Later during the month, PG plc approved the company’s interim financial statements for the six-month period ended October 31, 2021. The group registered a turnover of €71m compared to €60.9m in the same period last year. This represents a growth of 16.5%.

The overall gross profit earned by the Group from May 1, 2021 to October 31, 2021, amounted to €11.3m as compared to €9.6m in October 2020. The operating profit registered was €9.3m when compared to €7.9m in 2020, an improvement of 17.4%.

Profit before tax increased by 20% to €8.6m. After deducting finance costs and taxation, the Group registered a profit after tax of €6.2m compared to €5.1m the previous year. This resulted in an increase of 20.7%.

The cash generated from operating activities amounted to €11.3m, which is 21% higher than the equivalent amount registered last year. As at October 31, 2021 the Group’s bank borrowings, net of cash in hand, stood at €0.89m. The company added that it has a strong liquidity position and remains well placed to pursue new growth opportunities in its core line of business. A net interim dividend of €2.25m was paid on December 10, 2021 to all ordinary shareholders on the books of the group as at December 2, 2021.

Malta International Airport plc erased the previous month’s decline after 38 transactions of 40,745 shares pushed the share price to the €6.00 level. The equity closed the month 3.5% higher, however closed the year 3.2% lower.

MIA published the airport’s traffic report for November, which indicated that 315,964 passengers travelled through the airport. This total translates into a decrease of 35.9% compared to 2019 figures, which is the lowest percentage drop to be registered by MIA since the start of the pandemic. Out of a total of 455,802 seats available on flights operated to and from MIA, almost 70% were occupied during the month of November.

During the month, AX Real Estate plc (AXRE) announced that it has been granted approval by the MFSA for the admissibility to listing on the official list of the MSE of a class of shares and bonds in AXRE. The shares in AXRE of a nominal value of €0.125 will be offered for sale to the public at an offer price of €0.60 per share. The amount available for ordinary ‘A’ shares amounts to 33.3m subject to an over-allotment option up to 50m ordinary ‘A’ shares. AXRE will also be issuing €40m in 3.5% unsecured bonds of a nominal value of €100 per bond, redeemable in 2032.

GAP plc announced that the Company has received regulatory approval for the issue of up to €21m Gap Group plc 3.9% Secured Bonds 2024 – 2026, having a nominal value of €100 per Bond and issued at par.

In terms of IPO announcements, Hili Properties plc announced that all applications were allocated in full, as a total amount of 100,892,700 shares were submitted by authorised financial intermediaries representing 25.2% of the total issued share capital of the Company. Trading in the equity is expected to commence on December 22, 2021.

The MSE Corporate Bonds Total Return Index gained 0.8% over the month, reaching 1,149.109 points. A total of 64 issues were active, with total turnover reaching €5.2m. The 3.5% Bank of Valletta plc € Notes 2030 S2 T1 was the most liquid corporate bond, as 14 trade worth € 365,036 were recorded.

The MSE MGS Total Return Index advanced by 0.9% to close at 1,105.6 points. A total of 22 government bonds were active, with the 1.85% MGS 2029 (III) being the most liquid, as one trade worth a total of €4.48m was recorded.

In the Prospects MTF market eight issues were active, with total turnover tallying to €178,597 spread over 31 deals. The 5% Busy Bee Finance plc Unsecured € 2029 was the most liquid, and generated a total monthly turnover of €71,121 to close at €101.50.

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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