Germany bans short selling of Wirecard stock | Calamatta Cuschieri

The MSE Total Return Index started week with gains of 1.206% to close at 9,055.266. Best performers on the Maltese market was Grand Harbour Marina plc which rose 14.75% to 0.70. Second in line was BMIT Technologies plc which started trading Monday. From IPO price 0.49 it gained 12.24% to close its first trading day at 0.55. Negative results showed only Malta Properties Company plc, dropping 1.79% to close at 0.55.

European stocks finished firmer Monday, as investors continue to watch trade negotiations between the U.S. and China hoping for upbeat news. The Stoxx Europe 600 rose by 0.2% to 369.78. Italy’s FTSE MIB climbed 0.6% to 20,333.26, while France’s CAC 40 added 0.3% to 5,168.54. The FTSE 100 was down 0.3% to 7,219.47, Germany’s DAX 30 finished flat at 11,299.20.

U.S. market was closed Monday due to Presiden’t Day. Congress declared Washington’s Birthday a holiday in 1879. Meanwhile, Canadian markets are closed in observance of Family Day, which coincides with Presidents Day in the U.S. in falling on the third Monday in February.

German and European financial market regulators banned short-selling shares of German payment services company Wirecard

German regulator BaFin said continued short selling — a type of trade that bets on a share price dropping in the near future — could negatively impact the wider market. Short sellers started targeting the stock in earnest after a newspaper report of fraud at the company.

The European Securities and Markets Authorities (ESMA) said it supported the decision as "appropriate and proportionate." The ban, BaFin's first to apply to a single company stock, caused a 13.1 percent hike in Wirecard's share price to €113 ($127.24) in Monday trading.

The company welcomed "all measures" that would help to "quickly clear up" recent events.

The move came the company's share price dropped from a high of €199 in response to reports in Britain's Financial Times newspaper accusing Wirecard of fraud.

The company has dismissed the allegations as "defamatory" and vowed to sue the newspaper. BaFin and German prosecutors have since expanded a probe into irregularities at Wirecard to examine allegations that a Financial Times journalist committed market manipulation. The journalist is suspected of notifying someone about Wirecard's irregularities before the Financial Times published an accompanying article. The newspaper said the allegation was "baseless and false."

Based in Munich, Wirecard offers various payment services for banks and other types of financial institutions.

Disclaimer: This article was issued by Nadiia Grech, junior trader at Calamatta Cuschieri. For more information visit, www.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.