MSE | Wednesday, 09 March 2008

GlobalCapital p.l.c. shares tumble on low volume

GlobalCapital Financial Management Ltd - Malta Stock Exchange Review

Yesterday, while Garrison Chapel cheered another rise in Grand Harbour Marina p.l.c. shares, GlobalCapital p.l.c. and market heavy weighted Bank of Valletta p.l.c. and HSBC Bank Malta p.l.c. moved to lower ground dragging the local index down by 1.12% at 4588.99 points.
The shares in GlobalCapital p.l.c. saw a free fall to the tune of 43.7% or Eur2.25 (MTL0.966) to close at Eur2.90 (MTL1.245). However, volume was extremely low as 1,200 shares changed hands across two transactions.
On Thursday 3rd April, the Board of Directors of GlobalCapital p.l.c. has met and approved the Group’s financial statements for the period ended 31st December 2007 and resolved to lay the same for the approval of the shareholders at the forthcoming Annual General Meeting.
The Group registered a profit before tax for the period ended 31st December 2007 of Lm151,862 (€353,743) when compared to Lm3,171,685 (€7,388,039) in 2006. The year under review was characterised by a severe downturn in the capital markets which had an adverse effect on the results and operating performance for the year. This scenario is expected to persist in the near term. In view of the above, the income from performance fees has decreased by Lm2,449,664 (€5,706,182) from Lm2,507,472 (€5,840,839) to Lm57,808 (€134,656). The turmoil within the capital markets has also affected investor confidence which impacted the sale and distribution of investment products. The Group’s Business of Insurance segment continued to register progress which is reflected in the growth of premiums written. In 2007, these amounted to Lm5,423,888 (€12,634,260) compared with Lm4,169,850 (€9,713,138) in 2006. However this segment’s performance was also adversely impacted by the capital markets’ performance which prevailed in 2007. The same positive trend was experienced in the Group’s agency and brokerage services segments whereby turnover increased to Lm819,246 (€1,908,330) in 2007 compared to Lm549,261 (€1,279,434) in 2006. This also led to a segment result of Lm277,687 (€646,837) in 2007 compared to Lm14,410 (€33,566) in 2006. The Group’s property segment has continued to perform at good levels in line with previous years with turnover of Lm468,621 (€1,091,593) in 2007 compared to Lm79,934 (€186,196) in 2006. The corresponding result for this segment is Lm1,914,854 (€4,460,410) in 2007 compared to Lm749,710 (€1,746,355) in 2006.
Despite the prevailing environment in the local and international capital markets, the Group is well-positioned to take advantage of an upturn in due course. The Board is of the view that there are imperfections in the market and therefore opportunities, including acquisitions, are being actively pursued. In view of the results for 2007, the directors do not recommend the declaration of a dividend.
On a negative note, Bank of Valletta p.l.c. and HSBC Bank Malta p.l.c. continued zooming down as the share price slipped Eur5c0 (MTL0.021) and Eur1c0 (MTL0.004) at Eur5.50 (MTL2.361) and Eur4.40 (MTL1.889) respectively across a total volume of 7,082 shares. The price of Bank of Valletta p.l.c. shifted in a very tight range of Eur5.499 (MTL2.361) to Eur5.55 (MTL2.383).
On Wednesday 3rd April, Bank of Valletta p.l.c. announced that Moody’s has re-affirmed all BOV’s ratings as last awarded in May 2007 as follows:- Bank Deposits A3/Prime – 1, Bank Financial Strength D+, Baseline Credit Assessment Baa 3, Senior Unsecured Debt A3, Outlook (for all Ratings) Stable. In the section of the report dealing with recent results and developments, Moody’s comment that they expect BOV’s 2008 results will be affected by mark to market write downs on fixed income securities held by the Bank (in the light of broadening credit spreads), and by the loss of FX (foreign exchange) trading gains following Malta’s adoption of the euro in January 2008. In terms of BOV’s core retail and corporate businesses, the Bank has continued to perform much in line with expectations, close to the high levels registered during the previous year. The loss of FX earnings on euro transactions following Malta’s adoption of the euro has come as no surprise to the Bank, and this assumption has been built into its business plans. Financial markets have continued to be volatile, and as indicated in the Company Announcement issued on 25th January 2008, this volatility will be reflected in the half yearly results to end March 2008, which will be below those achieved in the first six months of financial year 2007. These results will be notified to the Malta Stock Exchange on 29th April 2008. As noted by Moody’s, the Bank’s securities portfolio is of high quality, and the Bank expects the impact of the mark downs arising from the current market turmoil to be clawed back over time, as the investments are held through to maturity.
On 5th April, HSBC Bank Malta p.l.c. announced that Mr. Shaun Wallis will be relinquishing his post as Chief Executive Officer with effect from 5th May 2008. Mr. Wallis will be replaced in the post of Chief Executive Officer, subject to regulatory approvals, by Mr. Alan Christopher Hugh Richards and this with effect from 5th May 2008. Mr. Richards is currently Director and Deputy Chief Executive Officer HSBC Australia. He was formerly Director and Head of Retail Banking, HSBC Bank A.S. Turkey and previously Director HSBC Broking Asia and prior to that General Manager HSBC Bank Malasia. No matter concerning Mr. Richards requires disclosure under Listing Rules 8.16.3 to 8.16.8.
Malta International Airport p.l.c. and MaltaPost p.l.c. also weighed on the index dragging the share price down Eur2c0 (MTL0.009) and Eur3c0 (MTL0.013) to Eur3.33 (MTL1.43) and Eur0.70 (MTL0.301) respectively.
Grand Harbour Marina p.l.c. was the only stock which made some headway. The share price finished up Eur5c0 (MTL0.021) to settle at the Eur2.25 (MTL0.966) level. The turnover was robust as 40,860 shares were swapped across seven trades.
Elsewhere on the board, International Hotel Investments p.l.c., FIMBank p.l.c., Crimsonwing p.l.c. and Datatrak Holdings p.l.c. traded sideways without affecting their previous session close at Eur1.01 (MTL0.434), $1.91, Eur0.56 (MTL0.24) and Eur0.305 (MTL0.131) respectively.
Following a company announcement issued by Lombard Bank Malta p.l.c. on 3rd April, the said company announced that Mr. S. Loffredi and Mr. G. Maiga have resigned as Directors of Lombard Bank Malta p.l.c. with immediate effect and subject to regulatory approval. Furthermore, Mr. Dimitris Spanodimos residing in Athens, Greece and Mr Christos J. Stylianides residing in Nicosia, Cyprus, have been appointed Directors of Lombard Bank Malta p.l.c. with immediate effect and subject to regulatory approval. Furthermore, neither Mr. Spanodimos nor Mr. Stylianides have occupied any directorship in any other Listed Company at any time in the previous five years from today. In terms of Listing Rules 8.16.3 through to 8.16.8 there are no further details to be reported.
On 5th April Datatrak Holdings p.l.c. announced that at an Extraordinary General Meeting of the Company, the Shareholders gave their consent for the Company to acquire, through Datatrak Mena Limited, the business, assets and liabilities of Datatrak Solutions Limited and that Datatrak Systems Limited acquires the business, assets and liabilities of Datatrak IT Services Limited for an aggregate consideration not exceeding €4,784,850 and in accordance with the transaction structure set out in the Shareholders’ Circular issued by the Company and dated 18th March 2008, and under such terms and conditions as the directors may, in the best interests of the Company determine and consider appropriate.
In the fixed interest market, a total of Eur2,445.34 (MTL1,049.78) (1 Deal) were transacted in Government Bonds.