Banking Equities drag the MSE Index lower

The MSE Equity Total Return Index ended the month in negative territory for the third consecutive month, as it closed 1.3% lower at 7,564.757 points. A total of 30 equities were active during the month, nine of which headed north, while another 19 closed in the opposite direction. Turnover saw a decrease of €0.2m compared to the previous month, generating a total turnover of €2.2m in March.

The highest liquidity was recorded was by Simonds Farsons Cisk plc shares, as they generated a total monthly turnover of €0.4m. The price declined by 5.9%, as 50,279 shares changed hands across 16 transactions. The equity ended the month at the €8 price level.

Malta International Airport plc (MIA) retracted by 2.6% to €5.65, following 38 transactions of 66,738 shares.

MIA registered a sevenfold increase in February’s passenger traffic over the same month in 2021. However, traffic, which totalled 196,895 passenger movements, remained 45.2% below 2019 levels.

Over the years, MIA’s traffic for the month of February has been consistently lower or marginally better than January traffic. Last February’s traffic bucked the trend, as it registered a significant increase of 24% over the previous month.

This double-digit growth indicates that the easing of travel restrictions, most of which had been introduced at the end of 2021, unleashed a pent-up demand for air travel.

February saw the United Kingdom claim the top spot in MIA’s market leaderboard. From among the most popular five markets, the United Kingdom had the strongest growth rate over February 2021. Back then, stringent travel restrictions between the two countries had limited traffic from this market to just 841 passenger movements. Italy, France, Poland and Germany made up the rest of the leaderboard, with a cumulative market share of 42.3%.

Airports Council International, of which Malta International Airport is a member, and the International Air Transport Association called for the removal of all remaining COVID-19 restrictions applying to intra-EU and Schengen area travel, including testing requirements, the need to present proof of vaccination and the need to complete a Passenger Locator Form (PLF).

In the banking sector, Bank of Valletta plc (BOV) closed in the red, as 383,995 shares changed ownership over 81 transactions. The equity ended the month 2.5% lower at €0.77.

BOV’s board approved the annual report and financial statements for financial year ended December 31, 2021. The board also resolved that the audited financial statements be submitted for the approval of the shareholders at the forthcoming AGM which will be held remotely on June 2, 2022.

The bank reported profit before tax of €80.7m, versus the previous year’s figure of €15.2m. The underlying operating performance of the bank demonstrates a resilient income stream with good recovery from the impact of the pandemic in 2020 and growth in some areas, which was partly offset by higher costs. The much stronger profitability benefited from a net release of Expected Credit Losses reflecting better economic conditions relative to 2020 and individual client asset improvements.

The total operating income was up 4.9% to €242.9m. The bank’s revenues mostly recovered from 2020 lows, as net interest income held up overall and net commission income grew strongly, however foreign exchange income was down due to continued lower turnover. Total costs were €195.6m, increasing by €25.2m or 14.8%, inclusive of strategy costs which were up by €7.3m year-over-year.

The total assets of the group reached €14.4bn as at December 2021 an increase of 11.2% over the previous year. Customer deposits grew by €904.6m.

The group’s treasury investment portfolio increased by €260m year-on-year. The increase relates to highly-rated securities. Net loans and advances increased by €335.3m, or 6.9%, during the year and stood at €5.2b as at December 31, 2021. The group liquidity ratio stands at 444%, reflecting high deposit growth over the year which outpaced the demand for loans.

Moreover, the CET 1 ratio increased from 20.9% to 21.9%, and the total capital ratio improved from 24.5% to 25.5%, as at end of December 2021.

During 2021, a gross interim dividend of €0.0264 per share amounting to €15.4m (net ordinary dividend of €0.0172 per share amounting to €10m) was authorised and paid on January 28, 2022. However, the board does not intend to recommend a final dividend for financial year 2021, which is in line with the continuous efforts of the board to maximise long-term shareholder value in the bank.

Similarly, HSBC Bank Malta plc lost 7.3%, to close at €0.83. Twenty-one transactions involving 96,997 shares were executed.

Lombard Bank Malta plc registered a double-digit decline of 11.9% to close at €1.85. This was the outcome of 4 deals involving 13,095 shares.

Two transactions of just 248

LifeStar Holding plc shares translated into a 1% decline in the share price. The equity closed the month at €0.99. Likewise, three transactions of 27,500 FIMBank plc shares dragged the share price by 6% to the $0.25 level.

Loqus Holdings plc headed the list of fallers, after recording a double-digit decline of 26%. The equity closed €0.039 lower at €0.111. A total of 8,385 shares changed hands over five deals.

Mapfre Middlesea plc followed suit with a 2.7% depreciation in price to €2.14. The equity traded four times, as 10,186 shares changed hands.

The board of Mapfre approved the audited financial statements for the financial year ended December 31, 2021. It resolved that these audited financial statements be submitted for the approval of the shareholders at the forthcoming AGM on April 29, 2022.

The board will recommend, for the approval of the AGM, the payment of a final net dividend of €2.4m, equivalent to a gross dividend of €0.0304012 per share. If approved, the dividend will be paid on May 24, 2022 to the shareholders registered at close of business on May 11, 2022.

Twenty-two deals involving 35,016 GO plc shares left no impact on the previous month’s closing price of €3.18. The equity generated a total turnover of €113,180.

GO announced that it concluded a transaction that will result in the subscription of 76% shareholding in Sens Innovation Group Limited (SENS). The total consideration payable for the subscription of the shares is €1m, with the possibility of a further €1.85m earnout, depending on the performance of SENS over a three-year period. It is expected that the afore-mentioned shares will be issued in favour of the company in the coming days.

SENS is an energy management company that leverages proprietary IOT-based technology to reduce energy consumption and associated costs for commercial buildings. SENS serves large hotels and commercial clients in Malta, UK, mainland Europe and Dubai.

Further to this strategic acquisition, the company anticipates that new opportunities will come its way, as it offers environmentally conscious energy-saving solutions to companies in Malta, Cyprus, and UK.

Meanwhile, the AGM of GO plc will be held remotely on May 25, 2022.

International Hotel Investments plc (IHI) closed the month with a positive 4.4% change in price, reaching the €0.60 price level. This was the outcome of 20 transactions involving 90,540 shares.

IHI informed the market regarding the hotel operation in St Petersburg, Russia. The company’s hotel, with an adjoining commercial centre, have been in operation for a number of years. Following the latest events, and in particular the sanctions imposed on Russia, it is expected that this may have an adverse effect on the hotel operation in St Petersburg.

The company expects that the local market will not be materially adversely affected by the recent events. The hotel operation has over the last two years, in view of travel restrictions imposed by the pandemic, had the principal source of its business originating from the local Russian market.

IHI’s interest in St Petersburg represents approximately 8% of the group’s total revenue and assets. Operating forecasts of the company’s other properties remain encouraging, confirming the company’s resilience arising from its geographic diversification.

Management will continue to closely follow the events as they unfold, in full compliance with any applicable sanctions, and shall keep the market informed of developments.

Malta Properties Company plc (MPC) was active 23 times over 64,719 shares. The equity recorded a 1.9% fall in price, ending at €0.51. On a year-todate basis, the equity declined by 7.3%.

MPC announced that it has entered into a promise of sale and purchase agreement with a+ Investments Ltd. Pursuant to the agreement, the vendor promised and bound itself to sell and transfer to the company which promised to purchase and acquire an office complex in Ta’ Xbiex.

By virtue of an agreement made on October 7, 2021 the company assigned its rights arising from the agreement to SGE Property Company Limited. SGE is a wholly-owned MPC group company.

Pursuant to an amendment to the agreement, the consideration for the sale and acquisition of the property was reduced by €175,000, from €8.75m to €8.575m, of which the sum of €875,000 was paid by way of deposit on account of the price on the execution of the agreement. The balance of €7.7m was paid on the execution of the final deed of sale, and was partially financed through bank financing obtained by SGE.

The property will now form part of the MPC group property portfolio, resulting in the MPC group receiving rental income in terms of lease agreements attributable thereto.

The company approved the annual report and consolidated financial statements for the year ended December 31, 2021. The total income for MPC amounted to €3.64m, 6% higher than that for 2020, as a result of the tenanted office building acquired in September 2020 and income generated from the photovoltaic panels installed late in 2020.

Operating profit of €2.1m remained in line with the previous year, with higher revenues offset by increases in various operating costs. In 2021, there were gains in fair value of €2.22m, and additional finance costs paid on refinancing a maturing loan and drawing down a new loan to finance the acquired office building, resulting in a profit before tax of €3.61m.

The board resolved to recommend that the AGM approves the payment of a final dividend of €0.012 net of taxation per share. The payment of this net dividend amounts to the sum of €1,215,726. The final dividend will be paid on May 24, 2022 to all shareholders on the register of members at the Central Securities Depository at close of business of April 19, 2022.

AX Real Estate plc declined by a further 1.7%, dragging the equity to the €0.58 price level. This was the result of a single trade of 6,000 shares.

Despite being active across five transactions of 36,000 shares, VBL plc closed unchanged at €0.254.

Malita Investments plc fully erased the previous month’s negative performance, as a result of 19 deals involving 127,100 shares. The share price closed 5.3% higher, ending the month at €0.79.

Trident Estates plc advanced by 6.6%, as 19,528 shares exchanged ownership across seven deals. The equity finished the month at €1.46.

Hili Properties plc recorded an 8.4% decline during the month, to close at €0.24. A total of 16 deals involving 150,500 shares were executed, worth €37,280.

MIDI plc partially recovered the previous decline of 16%, as 10 deals of 80,250 shares pushed the equity 5.6% higher. The equity closed at €0.38.

Both RS2 Software plc Ordinary shares and Preference shares ended the month in negative territory. The company’s ordinary shares eased by 1.2% as a result of 38,254 shares executed across nine transactions, whereas a sole trade of 2,900 shares dragged the company’s preference shares 0.6% lower. The equities closed the month at €1.60 and €1.68, respectively.

RS2’s board announced that it has been made aware of a firm intention by a shareholder to acquire a substantial shareholding, not less than 10%, from one other shareholder, in RS2 Software plc.

BMIT Technologies plc gained 5.4%, as turnover reached €0.3m over 47 transactions of 649,827 shares. The equity closed the month at €0.51.

BMIT announced that the company’s AGM will be held remotely on May 24, 2022.

Three deals of 4,450 Harvest Technologies plc shares lifted the share price 2.7% higher, thus partially recovering it previous 4% decline. The equity closed the month at €1.50.

The services and logistics company for oil and gas, Medserv Regis plc registered the best performance for March after the share price appreciated by 18.7% to close the month at €0.89.

A sole trade of 2,000 Grand Harbour Marina plc shares eased the share price to €0.62, lower by 0.8%.

The retail conglomerate, PG plc advanced marginally by 0.9% to €2.24. This was the outcome of eight trades involving 21,951 shares.

Tigne’ Mall plc continued to trade in negative territory, as it lost 1.4% to the share price and ended the month at €0.70.

The newly listed equity,

M&Z plc, closed its first month of trading in the green. Seven transactions of 72,873 shares pushed the share price 4.2% higher, ending March at €0.75.

Plaza Centres plc continued to lose ground with a decline of 5.6% to close the month at the €0.85 price level. The equity traded on five deals of 23,150 shares.

The share price of MaltaPost plc was down by 7.6%, as 22,956 shares were spread across 18 transactions. The equity ended the month at €1.10. Similarly, Main Street Complex plc closed 14.9% lower at €0.40, as 7,000 shares changed ownership across two transactions.

Mercury Projects Finance plc announced that it has submitted an application to the MFSA requesting the admissibility to listing of €50,000,000 secured bonds maturing in 2032, with a nominal value of €100 per bond, to be issued at par, and will pay interest at 4.30% per annum.

In the Corporate Bond market, 71 issues were active, dragging the MSE Corporate Bonds Total Return Index by 0.7% to 1,133.942 points. The issues generated a total turnover of €9m. The 3.5% GO plc € Unsecured 2031 was the most liquid bond, as it registered €1.1m in turnover, to close at €100.01.

The MSE MGS Total Return Index ended the month 1.4% lower at 1,029.078 points, where out of the 22 active issues, none of the bonds traded higher. The 5.25% MGS 2030 (I) was the most liquid issue, recording €1.8m in turnover.

In the Prospects MTF market, 12 issues were active. The

5% Busy Bee Finance plc Unsecured € 2029 was the most liquid, as a total turnover of €123,800 was generated.

This article, which was compiled by Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member of the Malta Stock Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited at 67, Level 3, South Street, Valletta, or on Tel: 2122 4410, or email info@jesmondmizzi.com