Crisis leads to equity decline

Since the 11 September attacks on the stronghold of the western world’s economy, most equities listed on the Malta Stock Exchange have fallen in average value, perhaps reflecting – to some degree – the global investor insecurity that has set in.

Speaking to this newspaper at the end of September, Malta Stock Exchange Chief Executive had explained, "The effects of the ‘war on terrorism’ on the Malta Stock Exchange cannot be determined at present because one would have to wait and see how the situation develops on an international scale."

He added that, looking at the trading figures in the wake of the tragedy there seemed to be no noticeable decline which could be attributed to the event, in particular because the pattern of trading has been slow for a number of months.

Mr Guillaumier is correct in that trading volumes have been low, but some depreciations have been noticed. However, it should be noted that many of the equities analysed underneath have not been strangers to depreciations, whether sudden or gradual, over recent months.

The worst hit equity on the MSE has been Middlesea Insurance, which has dropped 33c5 off its average price over trading carried out since the day that shook the world. However, Middlesea’s fall was not immediate. In fact, the equity had remained stable at Lm2.994/3 until 27 September, when it lost 26c3 off its average price over relatively low trading of 764 shares. The equity then declined steadily to its current average price of Lm2.659.

However, Bank of Valletta shares have not fared much better and have lost 32c9 from their average price. Since the 11th, the equity has seen a steady decline in average price, falling consistently on each day it saw action. The equity currently stands at Lm3.015.

Lombard Bank shares, interestingly, actually appreciated on their first day of trading since the 11th, climbing by 5c3 in average price over trading of just 70 shares on 24 September. However, the equity then dropped by 31c5 on 4 October over trading of 1,000 shares.

Maltacom shares have also depreciated, but not by as much as might have been expected. The equity has fallen in average value by 18c7 over the period in question. The fall has been consistent, but it must be noted that the equity has been on a steady decline for some time now.

On the other hand, only one equity has seen an appreciation since 11 September. Plaza Centres has seen an overall appreciation of 4c since the 11th. The rise occurred on 26 September over low trading of 462 shares. Notably, immense trading in the equity was registered on 1 October when 754,280 shares were traded, leaving the equity’s average share price unaffected.

Declines have also been noted in the shares of Simonds Farsons Cisk (-7c7) International Hotel Investments (-5c7) Globe Financial Management (-2c8) and First International Merchant Bank (-0c5).

Meanwhile, non-mover since the 11th include HSBC – with no trading registered since the 11th and Suncrest Hotels, which have been stagnant since 22 August.