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Markets Update and British travel firm Thomas Cook


Minimal increase in MSE price index, rise in European Stocks, fall in U.S. Stocks, Futures contracts with Bitcoin pay out, Thomas Cook collapses.

The MSE Equity Price Index had a minimal increase of 0.07%. For the past week, the local equity benchmark decreased by 0.58% following 3 consecutive weeks of gains. Malta Properties Company plc kept its highest level since the spin-off from GO plc back in November 2015, at a price level of €0.72. Similarly, Tigné Mall plc kept its two-week high of €0.935. On the other hand, MIDI plc decreased by 1.6% to the €0.62 level, making it the worst performing equity for the day. HSBC Bank Malta plc and Bank of Valletta plc dropped by 0.7%, €1.42 and 0.4%, €1.155 respectively. Simonds Farsons Cisk plc fell by 0.9% which resulted to €11.10 from its all-time high of €11.20.

Increase in European Stocks

European stocks kept its upward trend with investors purchasing oil, gas and banking sectors. Investors also looked for refuge in the so-called defensive sectors such as utilities, real-estate and food and beverages ahead of week packed of economic data announcements. The United Nations (UN) general assembly will also provide a number of hints with regards to the fallout from attacks on Saudi oil facilities which happened recently. There are also indications that there will be a potential meeting between the presidents of Iran and the United States. The pan-European STOXX 600 index had an increase of 0.3%. Novo Nordisk, a Danish multinational pharmaceutical company, gained 2.6% as a result of the U.S. Food and Drug Administration approved an oral version of its diabetes drug, Semaglutide.

U.S. stocks fall due to trade concerns

U.S. stocks closed in the red, this was the first decrease for the month of September, a result of investors looking forward after carefully digesting the central-bank decisions and focusing on the current state of China-U.S. trade talks. There were two main sectors which dragged the market lower, the technology sector and the consumer discretionary shares, after a report that the Chinese delegation had cancelled plans to visit farms in Montana as part of its negotiations with the U.S. delegation. Stocks which caught our eye in the market were Apple Inc. and Netflix Inc. Apple started sales for the new iPhone 11 in stores, the company received a good amount of pre-orders which might indicate that there might be still a trend on iPhone revenue. The gains helped Apple to reclaim a trillion-dollar valuation. On the other hand, Netflix fell by 5.9%, keeping a downward trend. CEO Reed Hastings informed investors at a conference that the company has been competing with a number of competitors during the last decade, there will be a major change staring in November, this change will tough towards competition.

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.