MSE closes January

The MSE Equity Total Return Index registered a 1.159 per cent decline for the first month of 2020, with HSBC Bank Malta plc (HSBC) being the main loser, having stumbled by 19.2 per cent. Total turnover for the month amounted to €6.5 million and was spread across 23 equities, of which nine gained ground and eight fell. The index closed at 9,504.238 points.

HSBC shares were active on 105 deals of 464,302 shares, registering a €0.25 decline, to close at €1.05. The board of the bank is scheduled to meet on February 18, 2019, to approve its final audited accounts for the financial year ended December 31, 2019. Moreover, the board shall also consider the declaration of a final dividend, which is to be recommended during the bank’s AGM, to be held on April 8, 2020.

HSBC announced that on January 15, 2020, it entered into a promise of sale agreement with

Malta Properties Company plc (MPC), to sell a building

complex in Swatar, including the parking area adjacent to this building complex as well as the overlying airspace and sub-terrain of the property as freehold. Such sale’s purpose is the disposal of a non-core property asset, which is not part of the bank’s normal business. This shall generate an immaterial profit as this responsibility is transferred to a third party, lower volatility in earnings associated with revaluations, and the complexity of related-party obligations shall be reduced.

The property is being sold subject to a lease agreement in place in favour of HSBC Global Services (UK) Limited. Moreover, HSBC shall guarantee in favour of MPC that the property is free from any burdens or any other rights in favour of any third party given that MPC shall have the right to not appear on the deed without any liability. MPC shall be entitled to an immediate refund of the deposit should it appear that the property acquired is burdened. It shall also be entitled to a refund should MPC not obtain an acquisition of immovable property, should the due diligence exercise being undertaken turn out not to be satisfactory, or should MPC fail to obtain, within five days from the agreement date, a sanction letter in terms of bank financing to fund the purchase of the property. In addition, HSBC Global Services (UK) Limited has undertaken to carry out refurbishment works to the property for an amount of not less than €1 million.

The property’s sale and acquisition is €8.05 million, of which €0.805 million are payable as per price terms and conditions set out in the agreement, and the remaining €7.245 million shall be paid by the purchaser on the deed on account of the price.

HSBC and MPC have also agreed that the deposit is a payment made on account of the price and not the earnest. Should MPC terminate agreement with a reason valid at law, MPC shall have the right to the immediate refund of the deposit. Moreover, if MPC fails to appear for the publication of the deed, for no valid reason at law, HSBC shall have the option to proceed against MPC or decide to request/retain the payment of deposit in its favour by way of pre-liquidated damages.

This agreement will remain valid and effective for five months from the agreement date, provided that an automatic three-month extension for the agreement will be given should the AIP permit application process still be ongoing. Once the deed reaches publication, the property will form part of MPC’s property portfolio, whereby MPC will receive the lease payments made in terms of the lease agreement.

MPC’s shares were negotiated across 25 transactions of 146,418 shares and closed four per cent higher at €0.655.

The telecommunications services provider GO plc, recorded a €0.12 or 2.8 per cent loss in its share price, as 46,482 shares changed ownership across 29 trades, closing at €4.14.

GO’s spin-off BMIT Technologies plc’s (BMIT) shares closed unchanged at €0.52, as 30 deals of 307,730 shares were concluded. BMIT announced that the final deed of sale and purchase of the property in Tal-Handaq, which houses the group’s largest data centre, was executed on January 17, 2020. A substantial part of the company’s operations can now be carried on from its own property. This shall minimise the risks involved with migration to another facility since there is no need for relocation of any customers allocated to the data centre operating from the property. This implies less expenses with respect to rental of premises.

Bank of Valletta plc

shares increased by 1.9 per cent, over 153 trades of 570,477 shares, closing at €1.08. Meanwhile,

Lombard Bank Malta

plc

shares declined by 4.4 per cent across six transactions of 7,264 shares, to close €0.10 lower at €2.18.

The trade finance bank

Bank plc¸ registered no change in its share price of $0.60, despite having traded at a monthly high of $0.63 and a low of $0.59. The equity was executed across 11 deals of 124,154 shares.

FIM

Malta International Airport plc (MIA) shares closed

unchanged at €6.90. The equity was active on 93 transactions of 86,961 shares. The year 2019 marked the tenth year of traffic growth for the airport. The airport ended 2019 with a record of 7,310,289 passenger movements, equivalent to a 7.4 per cent increase when compared to 2018. Such rise was in line with a 7.3 per cent increase in seat capacity. Seat load factor remained unchanged from 2018, as it stood at 81.8 per cent.

One of the main drivers for this positive performance was the improvement in flight schedules, for both winter and summer months. During 2019, MIA welcomed a new airline, inaugurated 18 new routes spanning three continents, and introduced other developments with the intention of further enhancing the islands’ connectivity, particularly in the off-peak months.

During the peak summer months, a 7.6 per cent increase in passenger movements was recorded while a 7.2 per cent increase was recorded for the winter months. The fastest-growing months for the year were December, April, June and October, with three of these top performers being winter and shoulder months. Meanwhile, August was the main driver for the full year traffic as it registered more than 823,000 passenger movements.

The top drivers of traffic for the year were Spain, France, Germany, Italy and the United Kingdom. These all benefitted from route developments that continued to reinforce their popularity during 2019.

The Board of MIA is scheduled to meet on February 26, 2020 to consider and approve its financial statements for the year ended December 31, 2019. The Board shall also consider the payment of a dividend to its shareholders.

Furthermore, during a press conference held at the end of the month, MIA announced its longterm goals, including an investment of around €100 million in the terminal expansion. The company’s traffic forecast for 2020 shows that passenger numbers are expected to rise by an additional 2-3 per cent, reaching 7.5 million movements.

This expansion will eventually occupy around 31,200 square metres, that is doubling its current area. The main focus will be given towards improving the passenger experience and airport processes, particularly the checkin hall, the security screening area and the departure gates.

The airport will soon be issuing a call for architects to submit a detailed proposal and phasing plans for the terminal expansion