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Market-making capability
for selected issues to
be introduced
A market-making capability is expected to be introduced soon
by Bank of Valletta for a number of local equities.
The bank said yesterday it has been working on a new development
which, it believes, will positively affect the market mechanism.
BOV’s financial markets division said that after the resolution
of some regulatory issues, “we expect to introduce, shortly,
a market-making capability.”
“Initially, we shall make a market in a select number of
listed issues, such as HSBC and Maltacom. Fimbank will also
be on the list,” the division said.
BOV, which is acting as registrar, manager and underwriter for
the current issue of shares in Fimbank, said yesterday demand
for the shares is being maintained this week at the same level
as that experienced last week. The offer period closes on tomorrow.
“This is an issue with strong growth prospects, and we
are looking forward to Fimbank’s interim results for the
first six months of this year, which results are expected to
be announced by 31 July. An interesting feature here is that
a substantial portion of the existing shareholding is held by
Fimbank directors and investors with long-term investment horizons.
This, of course, means that the ‘free-float’ will
be relatively small, lending support to the market once the
shares are listed,” BOV’s finance division said.
This means that the indications so far are that buyers of Fimbank
shares have invested for the long-term, and will not be attempting
to sell those shares in the short-term. Supply may therefore
fall far short of the demand which could be created by investors
who are waiting to buy Fimbank shares after they are listed
on the Stock exchange. This situation will support the share
price.
As a result of the stronger demand in the Maltese market over
the past few Stock Exchange trading days, the prices of a number
of equities have moved away from their recent lows. “There
is an air of quiet confidence in the market,” BOV said.
“A warning is always displayed on all advertisements for
financial products, to the effect that prices can go down as
well as up, and we seem to have seen a lot of the ‘down’
recently. However, while it is still too early in the current
rally to be sure that the market has turned, the outstanding
demand for the larger caps appears solid and very supportive
of the current level of prices.”
Fimbank president Claud L. Roy said his bank has been kept very
busy with a number of “serious enquiries” about the
share issue, the bank’s operational activities, and its
plans for development. He said: “The share issue launch
has helped immeasurably to get Fimbank known to the Maltese
business community. Going forward, this is expected to lend
support to our marketing strategy with potential clients in
the trade finance sector.”
Executives from Fimbank and Bank of Valletta have made a specific
presentation to potential investors in the Gozitan market, for
those who could not attend the presentations made on the mainland.
Ray Busuttil, Fimbank’s general manager, said: “The
meeting was very well attended, and good feedback was received.
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