MSE | Wednesday, 21 May 2008

A muted session at Garrison Chapel

GlobalCapital Financial
Management Ltd - Malta Stock
Exchange Review

Yesterday, the local bourse witnessed a session dominated by weak volumes and sluggish activity. Middlesea Insurance p.l.c recorded a positive movement. However, HSBC Bank Malta p.l.c. shares closed in the red. The Malta Stock Exchange index lost 0.07 per cent at 4336.69 points.
On a positive note, Middlesea Insurance p.l.c. placed as the best performer of the day. The share price gained €2c0 (LM0.009) to settle at the €3.43 (LM1.472) level across 444 shares. At market close, best unsatisfied bids stood at €3.43 (LM1.472) for 766 shares against best offers of 1,258 shares at €3.51 (LM1.507). Following a company announcement issued by Middlesea Insurance p.l.c. on Wednesday 14 May, the Board of Directors announced that during the financial period commencing on 1 January up to the date of announcement, no material events and/or transactions have taken place that would have an impact on the financial position of the Company or the Group, such that they would require specific mention, disclosure or announcement pursuant to the applicable Listing Rules. The first quarter of 2008 witnessed a market increase in the turbulence in the international financial markets, with the disruption spilling over from 2007 into 2008. The quarter has continued to present various challenges due to the inherent uncertain nature of insurance business that was reflected by cyclical movements in both capital and insurance markets. Positive trends in the capital markets have however emerged in the month of April. Furthermore, the Company notifies the general public that a dividend of 5c5 per share is being distributed from the company’s profits allocated to the company’s untaxed account.
Meanwhile, HSBC Bank Malta p.l.c. traded €1c0 (LM0.004) lower to finish the second session of the week at €3.88 (LM1.666). The total turnover amounted to 4,300 shares and exchanged across nine transactions.
On Friday 16 May, HSBC Bank Malta p.l.c. announced that it has recorded satisfactory progress for the period from 1 January 2008 to 16 May 2008. The period under review was characterised by a general slowdown in business activity, primarily due to the currency transition to the Euro and the general elections. Profit before tax was lower than for the period form 1 January to 18 May 2007. Interest income in the period was below expectations because of tighter margins and heightened competition, while non-interest income was also lower, primarily due to significantly reduced foreign exchange dealing income as a result of Malta’s adoption of the Euro on 1 January 2008. Operating expenses have been kept under tight control. While the Bank continues to upgrade its systems and processes it is also reaping the benefits of past investments which have increased operational efficiency and improved customer service delivery. The quality of the overall loan book remains good, with loans and advances to customers continuing to increase. There was no deterioration in the quality of credit lending whilst liquidity and solvency indicators remain sound and above regulatory levels. During the period under review, the Balance Sheet continued to grow at a steady pace. Good growth was recorded in total assets and customers’ deposits also showed significant growth.
Elsewhere, Bank of Valletta p.l.c., FIMBank p.l.c., Grand Harbour Marina p.l.c. and MaltaPost p.l.c. traded sideways without affecting their previous session close at €4.95 (LM2.125), $1.88, €2.05 (LM0.88) and €0.75 (LM0.322) respectively.
On Wednesday 14 May, Bank of Valletta p.l.c. announced that Mr John Cassar White has retired from the Bank, and has therefore relinquished his position of Chief Officer Risk Management with effect from 13 May 2008. Mr Mario Mallia has been appointed, with effect from 13 May 2008, to the position of Chief Officer Risk Management, and has therefore relinquished his current position of Chief Officer Finance, to which he had been appointed on the 28 April 2005.
On Thursday 15 May, International Hotel Investments p.l.c. announced that with effect from 15 May 2008, Mr David John Nicholson and Mr Andrew John Watson have been appointed as non-executive Directors. There is no matter concerning Mr Nicholson and Mr Watson regarding disclosures under Listing Rules 8.16.3 to 8.16.8. Furthermore, International Hotel Investments p.l.c. held its eighth Annual General Meeting on 15 May 2008 when the shareholders approved all the resolutions on the Agenda. IHI reported, in its audited consolidated financial statements that total revenue in 2007 increased by 72 per cent to €104.2 million over the level of €60.4 million registered in 2006. Gross profit improved by 81 per cent to €38.4 million in 2007, compared with €21.2 million in 2006. This increase in operational earnings was mainly driven by the acquisition of the Corinthia Bab Africa Hotel and the Corinthia Hotel Prague in May, 2007. The Meeting approved a resolution to capitalise an amount not exceeding €16.117 million from reserves, and issue bonus shares in a proportion of three for every hundred ordinary shares held.
On Friday 16 May GO p.l.c. announced that at a meeting held on 22 April 2008, the Board of Directors of Forthnet S.A. decided to propose to Forthnet’s Extraordinary General Meeting of Shareholders an increase in Forthnet’s share capital through payment in cash and with pre-emptive and oversubscription rights with the aim to raise up to €300 million. GO hereby announced that the EGM was held on Wednesday 14 May 2008. Forthnet has announced that the EGM approved an increase in the issued share capital of the company up to the amount of €137,556,721.74 with pre-emption right in favour of the shareholders who will hold shares in the company until and including the last business day prior to the ex-rights date, as such date will be determined and announced by the Board of Directors. The capital increase shall be made through the issuance of 116,573,493 new common registered shares, of a nominal value of €1.18 per share, at an offer price per New Share of €2.57 and with a ratio of three New Shares for every existing share. Forthnet announced that it is expected that the cash proceeds from the increase will amount to €299,593,877.01.
On Monday 19 May, Malta International Airport p.l.c. announced that during the financial period commencing on 1 January 2008 and the date of this Announcement, no material events and/or transactions have taken place that would have an impact on the financial position of the Company, such that they would require specific mention, disclosure or announcement pursuant to the applicable Listing Rules. During the period under review, the financial position of the Company has remained sound and the performance has been in line with projected results. The traffic for the first four months of the financial year increased at a higher rate than anticipated and the prospects for the rest of the year look good. Consequently the results for the first six months of the financial year are expected to be better than projected figures and significantly better than the results for the corresponding period last. In the meantime, the Company’s planned activities are proceeding on schedule within the parameters dictated by the Company’s Business Plan.
Following a company announcement issued by 6pm Holdings p.l.c. on Monday 19 May, the Board of Directors is expecting that the results reported for the first half of the current financial year will be below those achieved during the last period reported upon. Whilst 6pm is too small to be affected significantly by changes brought about by the world-wide commercial climate, the Company have deemed it appropriate to change the business focus to take advantage of some emerging opportunities which have arisen. These include reduced spending in certain private sectors but increased spending in certain public sectors, consolidation of some major technology vendors and increased demand for specific skill sets. As a result, the Company last year embarked on a strategy to take advantage of these emerging opportunities which consisted of internal programs of training and re-skilling its existing employees together with a change in sales focus towards those market areas that had a propensity for growth in demand. This strategy has been highly successful and the Company has now secured new business in Health, Government Housing, Media and Government Agency sectors. Implementing the above, created a slow start to the year however, the Company is now, through new significant business in the areas referred to above, looking forward to an improvement in the latter half of this financial year. Going forward the company is gaining significant expertise in Electronic Data Management Services (EDMS) and aspires to contract substantial work in support and maintenance. It has also increased its Intellectual Property with products that directly correlate with new emerging areas of market opportunity.
On Wednesday 14 May, GlobalCapital p.l.c. announced that the Company’s Audited Financial Statements for the financial year ended 31st December 2007 are available for viewing at the Company’s registered office at 120, The Strand, Gzira. Furthermore, on Tuesday 20 May, GlobalCapital p.l.c. announced that during the period between 1 January 2008 and the date of this announcement, the Company has agreed terms for the acquisition of 85.5 per cent of the issued share capital of Medifin Holding Limited, which holds 99.9 per cent of the issued share capital of Mediterranean Bank p.l.c, a credit institution licenced under the Banking Act, 1994. As announced by the Company on 18 April, 2008, the said agreement is subject to confirmation following due diligence, which is currently underway, and the necessary regulatory approvals. The disruption of the global financial markets which characterised 2007 has persisted during the initial months of 2008. This disruption has continued to have an adverse effect on the Group’s portfolio of financial investments. The poor investment climate has also resulted in a decrease in the operating performance of the Company’s main divisions when compared to the same period in 2007; on the other hand, the agency and brokerage segments have shown positive trends when compared to previous years. The financial stability of the Company and that of its controlled undertakings remains sound.
Following a company announcement issued by Simonds Farsons Cisk p.l.c. on Tuesday 20 May, the said Company announced that the sixty first Annual General Meeting will be held at the Cettina De Cesare Ballroom, InterContinental, St. Julians, on Thursday 26 June at 5:30pm.

Issued by GlobalCapital Financial Management Ltd, 120 The Strand, Gzira, GZR1027 for information purposes only and is not intended to constitute any financial, legal or tax advice. This write up is not to be taken as investment advice to buy or sell any investment. Investors should seek professional advice prior to taking investment decisions and should note that the value of investments may fall as well as rise. Readers who would like more information are invited to send an E-mail to [email protected] or Tel: 21 342342. GlobalCapital Financial Management Ltd is a member of the Malta Stock Exchange and is licensed by the Malta Financial Services Authority (MFSA).


21 May 2008

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