BoV financial statement sends equity price soaring
- rare investor reaction to financial statement

Things appear to be looking up at the Malta Stock Exchange. In what is widely considered to be the first tangible reaction on the Malta Stock Exchange to a listed company’s financial statement, Bank of Valletta shares skyrocketed by 66c by the close of trading yesterday.

At Lm3.10, the equity’s highest closing price since 13 March, Bank of Valletta shareholders are currently experiencing one of the largest single leaps in investment value.

However, the investing community’s scramble for BoV shares is thought to be more of a reaction to the bank’s generous special dividend policy and its bonus share issue than the brass tacks of the bank’s actual financial statement.

BoV had announced a pre-tax profit of Lm14.5 million, up just 0.8 per cent over last year’s figure. Group total assets had increased to Lm1.89 billion, 8.3 per cent, and customer deposits have increased by 11.1 per cent to reach Lm1.38 billion. Over the last financial year shareholders’ funds increased by 9.9 per cent.

Far more attractive, on the other hand, were the incentives approved by the BoV board. These included a special dividend of 5c gross per share over and above a dividend for the year of 11c gross per share. As an extra enticement, BoV’s bigwigs have also approved a bonus issue of one ordinary share for every five held, at no cost to the shareholder.

If Bank of Valletta designed the measures to boost its share price, it has certainly worked. 62,777 BoV shares have been traded on the Malta Stock Exchange over Monday and yesterday and the equity has, by far, been the most traded equity this week on Malta’s capital market.

Perhaps as a reflection of the BoV rush that hit the Malta Stock Exchange, HSBC shares climbed by 27c4 over trading between last Friday and yesterday. Lombard Bank shares, however, have fallen by 2c.