GlobalCapital Financial Management Ltd - Malta Stock Exchange Review
Leading banking stocks tumbled
Yesterday, all traded equities apart from Grand Harbour Marina p.l.c. and GO p.l.c. recorded a negative movement over the closing prices of Monday. The local index finished 2.37 per cent lower at 3723.96 points. Trading was primarily concentrated around the banking sector. HSBC Bank Malta p.l.c. and Bank of Valletta p.l.c. suffered another setback. Lombard Bank Malta p.l.c. followed suit while the shares of Grand Harbour Marina p.l.c. managed to stay above water.
On the banking front, HSBC Bank Malta p.l.c. raised the red flag as the share price traded €15c0 lower to finish at €3.11. The turnover amounted to 15,736 shares and exchanged across twelve transactions. The lowest traded price during the session was €3.031, whereas the highest traded price of the day was €3.20. On Tuesday 30 September HSBC Bank Malta p.l.c. announced that HSBC Life Assurance (Malta) Limited has on the 29th September 2008 increased the Issued Share Capital by four million, nine hundred ninety nine thousand, nine hundred ninety nine Euro thirty three cents (€4,999,999.33) divided into four million two hundred ninety three thousand and two (4,293,002) ordinary shares of fifty €1.164686 each fully paid up. The shares were fully subscribed by HSBC Bank Malta p.l.c. The share capital was increased by an injection of capital in cash by the parent company HSBC Bank Malta p.l.c. in line with its policy to support further growth in the Life Assurance business.
The shares of Bank of Valletta p.l.c. also weighed heavily on the index, dragging the share price down by a notable €20c0 to settle at the €4.00 level across 30,129 shares. These shares were swapped across twenty-five deals and carried a market value of €120,748.47. At the end of trading, bids for 4,000 shares stood at €3.912, whereas the best offer for 4,088 shares stood at €4.00.
Remaining on the banking front, Lombard Bank Malta p.l.c. decreased €4c9 to close the second session of the week at €3.00 on merely 80 shares which were swapped in a single trade. On Thursday 25 September, Lombard Bank Malta p.l.c. announced that upon reaching retirement age, Graham A Fairclough, holder of ID number 150382M, will be retiring from his post as General Manager of the Bank with effect from 30 September 2008.
On a positive note, Grand Harbour Marina p.l.c. acted as the most influential leader on the upside, after benefiting from sufficient buying interest to push the share price up €5c0 to the €2.20 level on relatively low volume amounting to 1,500 shares.
Elsewhere, GO p.l.c. traded sideways without affecting their previous session close at €2.20 across 5,000 shares. On Friday 26 September GO p.l.c. announced that Mr Keith Fearne, Chief Commercial Officer has today resigned from office. The Company thanked Mr Fearne for his loyal service and wished him success for the future.
On Tuesday 30 September, FIMBank p.l.c. announced that, pursuant to the scrip issue, the shareholders holding 5 per cent or more of its issued share capital as listed on the Malta Stock Exchange are the following:
1. Massaleh Investments K.S.C.C 44.27 per cent
2. Astrolabe General Trading Contracting Co. 5.80 per cent
3. International Finance Corporation 5.84 per cent
4. Mr. Fouad M. T. Alghanim 5.02 per cent
In accordance with the provisions of Listing Rules 8.110.1 and 8.117, the Company has received notification from Mr. Fouad M. T. Alghanim that his current shareholding in FIMBank p.l.c. amounts to 6,773,712 ordinary shares representing 5.024625 per cent of the Company’s equity capital.
On Tuesday 30 September Simonds Farsons Cisk p.l.c. announced that at its meeting held on 30th September 2008, the Board of Directors of Simonds Farsons Cisk p.l.c. approved the group’s financial statements and half yearly report for the six month period ending on 31 July 2008. The Group turnover increased 4.6 per cent to €35,306,000. The Gross profit margin decreased from 23.4 per cent to 21.5 per cent. The Operating profit amounted to €2,010,000 when compared to €2,905,000 in 2007. Profit before tax amounted to €1,520,000 when compared to €3,312,000 in 2007. The Board of Directors is recommending a net interim dividend of €200,000 in respect of the financial year ending 31 January 2009, payable on 24 October 2008 to the ordinary shareholders who will be on the register of members of the company on 10 October 2008. The interim dividend will be paid out of tax exempt profits and is equivalent to €0.0078 per share. In considering the results for the period, attention is drawn to the following factors:
a) Group turnover improved due to increased sales across all business segments;
b) While soft drink sales increased in volumes, sales values per litre decreased substantially;
c) The franchise food retail and import businesses continued to perform well, achieving growth in a number of product sectors;
d) Operating profits were impacted by initial efficiency set-up problems encountered with the newly commissioned production lines.
e) Gross margins have also been adversely affected by the advent of illicitly imported beverages, which have not been subjected to eco contribution, and, in some cases, VAT, thus placing the group under significant unfair competitive disadvantage.
f) The interim results were also affected by a lower profit on the disposal of property and an increase in finance costs, the latter as a result of the commissioning of the new soft drinks production line and distribution centre at the beginning of the year. In 2007, prior to commissioning, interest costs were capitalized;
g) The group is now operating in a wholly liberalized market in which price competition is acute. The Board of Directors, through its management structures, is in the course of implementing a permanent cost reduction programme. Such programme includes reductions in overhead costs and a head count reduction of 60 persons within the next 12 months through natural and early retirements and voluntary schemes. These cost reductions can be implemented directly as a result of the capital expenditure programme and reorganization undertaken over the past two years. The board of directors is determined and confident that it will achieve these targeted cost reductions, and that, as a result of these measures, the emerging cost structures will allow for improved profitability levels going forward.
In the fixed interest market, a total of €4,242,542 (31 Deals) were transacted in Government Bonds, whereas a total of €3,701 (2 Deals) were transacted in Corporate Bonds during the past week.
The turnover value in the Treasury Bill secondary market amounted to €657,852.
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).
