Markets Update and British travel firm Thomas Cook | Calamatta Cuschieri

Rise in MSE price index, rise in European Stocks, unchanged U.S. Stocks

The MSE Equity Price Index increased by 1.06% as a result of an increase of four main companies which offsetted the decreases of two other companies. Bank of Valletta plc rose by 1.3% to a €1.17 price level and Malta International Airport regained 4.2% bring the price back to €7.50.  International Hotel Investmets plc and FIMBank plc had a positive trading day having increases of 1.8%, €0.84 and 4.8%, $0.65, respectively. Conversely, GO plc and Malta Properties Company plc finished the day in the red, losing 0.9%, €4.36 and 1.4%, €0.71 respectively. Santumas Shareholdings plc kept its price level unchanged at €1.62. Last week, the company shared documentation with respect to its upcoming Annual General Meeting scheduled for Friday 11th October. Santumas has announced 1-for10 bonus share issue which has a cut-off date for Monday 7th October.

European shares rise having defensive stocks playing a major role

European stocks continued their upward trend, having gains lead by sectors which are perceived as defensive plays against the risk of a deeper economic slowdown and the chance of news with regards the U.S. China trade talks. European healthcare sector and the food and beverage sectors, which are normally considered as industries which maintain demand levels better when there is an economic slowdown – were the leaders in the European index.

Stock markets were kept aback due to negative economic data which was announced in the past week on the euro zone together with mixed signals because of the trade talks which weaken investors’ appetite for riskier plays. Central banks continue inject money in the financial system with a mix of interest rate cuts and other monetary moves.

U.S. Stocks highly effected by Eurozone highlight to Global slowdown

U.S. Stock were largerly unchanged as a result of investors weighing negative data with regads to eurozone manufacturing activity together with news tha Chinese officals took lightly last week’s U.S. farn states visits cancellation. The S&P 500 fell by 0.01 while the Dow Jones Industrial Average gained 0.06%. The market’s positives were led by real estate and consumer-staples stocks, defensice sectors that tend to outperform during low growth periods. In the S&P 500 consumer staples stocks were top performers rising by 0.4% and second upper were real estate by 0.2%.

Concerns with regards to economic slowdown were fueled by data which gave an indication the manufacturing activity in the Eurozone contracted more sharply in Septmeber, resulting in the worst reading in nearly 7 years. The Eurozone Manufacturing Purchasing Managers Index (PMI) dropped to an 83-month low at 45.6 in Septneber fron 47, forecasted as 47.3 – a figure less then 50 gives indications of declining activity. 

The stocks most in focus were McDonald’s Corp., FedEx Corp. And Amazon.com Inc. McDonald’s rose by 0.29% which resulted an increase of 1% in the Dow index. On the other hand, FedEx decreased by 2.09% which lead the stock to close at its lowest level since 2016. Amazon.com increased by 0.49% as a result of Morgan Stanley cutting the price target of the firm by 4%.

Bitcoin pay out futures contracts

Intercontinental Exchange, the owner of the New York Stock Exchange, announced its bitcoin futures contracts. This announcement was made with the intention to encourage investors that are a bit hesitant to invest in cryptocurrency. Bakkt, the company behind the contracts, said that the company is an Intercontinental Exchange-backed venture which focuses on offering trading and paying with cryptocurrencies for retail and institutional investors alike. The futures are physically deliverable, this means that the pay-out is in Bitcoin upon settlement. CME Group, Intercontinental Exchange’s competitor, offered a different kind of future contracts back in 2017, they used to be paid out in cash. Physical settlement is used for other markets like bonds, oil, cattle and metals.

Thomas Cook collapses stranding hundreds

Thomas Cook, the world’s oldest travel firm, collapsed which resulted in stranding hundreds of thousands of holidaymakers worldwide and have the largest peacetime repatriation effort in British history. CEO, Peter Frankhauser announced that this matter is of profound regret that the company had gone out of business after it failed to secure a rescue package from its lenders.  The UK’s Civil Aviation Authority (CAA) said that the company now stopped trading and both the regulator and government would work together to find ways of bringing more than 150,000 British customers back home over the next two weeks. The end of Thomas Cook marks the end of one of Britain’s oldest companies that was created in 1841 running British rail excursions before it survived two world wars to pioneer package holidays.  Thomas Cook was sinking in its £1.7 billion debt and also had a big hit due to online competition, changing travel market and geopolitical events that can influence the summer seasons. Last year, Europe went through a heatwave which had a negative impact on the company due to customers putting off last minute bookings.

 

This article was issued by Peter Petrov, Trader at Calamatta Cuschieri. For more information visit, https://cc.com.mt/. The information, view and opinions provided in this article are being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.

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