Lombard up another 7.5 per cent

Yesterday's session rounded up the first half of this year's Stock Exchange trading. The six-month percentage gain on the MSE index of 8.98 per cent would reflect a healthy bull market. However the index's gain to March 28, 2006 was an astounding 33.35 per cent. This reflects a substantial drop of 18.27 per cent in the second quarter of 2006. So what best describes the current market conditions? Is it a sitting bull which has stopped to catch its breath? Or is it a running bear with more territory to cover in the second half of this year? We'll know in six months' time!

The last trading week in June was a holiday-shortened four days thanks to Thursday's Imnarja. Lombard Bank (LOM) stole the limelight for the second consecutive week, accelerating 7.5 per cent to Lm5.75, while the major banks regained their composure after the previous week's beating. HSBC Bank Malta (HSB) made better progress, rebounding 4.8 per cent to Lm2.20 while Bank of Valletta (BOV) gained a more discreet 1.3 per cent to close at Lm4.00. The other two index heavyweights, Maltacom plc (MLC) and Malta International Airport plc (MIA) were in semi-hibernation; MLC only traded on Tuesday, up 2.1 per cent and MIA only traded once on Wednesday, closing unchanged at Lm1.40. In small cap stocks Simonds Farsons Cisk (SFC) regained some fizz after its recent flat performance, progressing 5.3 per cent to 80c. Middlesea Insurance plc (MSI) was the only stock to end the week in negative territory, closing on a post-split Lm2.60 (Lm5.20), 1.9 per cent down on the week. The MSE index closed the week up 2.7 per cent at 5427.97.

BOV opened the week on an optimistic note climbing from a Lm3.96 open to a Lm3.98 close on Monday with a turnover by value almost hitting Lm90,000. On Tuesday, it advanced further, hitting an intra-day high of Lm4.001 to settle back at Lm4.00. The price was maintained during the last two sessions for the week as activity dwindled; a mere 1375 shares were traded on Wednesday, while yesterday's session was slightly more active as 2587 shares changed hands. At Lm4.00, BOV closed the week up 1.3 per cent. At the end of the session bids for 800 shares were at Lm3.98 and the best offers totalled 13,986 shares at Lm4.00.

Last Tuesday BOV announced that by a letter dated June 26, 2006, Banco di Sicilia Spa (Bds) informed BOV that it will be seeking the consent of the Competent Authority to transfer to Capitalia Spa, its holding company, the qualifying shareholding that Bds holds in BOV, consisting of 16.128 million fully paid up ordinary shares (14.55 per cent of BOV's total share capital). Following this transfer there will be no change in the ultimate beneficial ownership of these shares. This transaction was processed last Wednesday.

HSB burst into action on Monday climbing steadily from a Lm2.101 open to Lm2.19 and closing a mil short at Lm2.189. It inched ahead to close at Lm2.194 on Tuesday after trading in a narrow range of Lm2.19-Lm2.195. The same pattern was repeated on Wednesday, as HSB closed at Lm2.19. Yesterday most trades were effected at what was the closing price of Lm2.20, for a week-on-week advance of 4.8 per cent. At the end of trading, the best bid was for 500 shares at Lm2.19 and the best offer for 1,255 shares at Lm2.20. Yesterday was also the closing of HSB's financial half year. If the Bank follows the same pattern as last year, the half-yearly figures will be available by the third week of July.

MLC had a near moribund week, setting a difficult-to- beat record for slowest week of the year: 4591 shares changed hands for a market turnover of Lm8664 on Tuesday. On the bright side, it traded off last week's lows, rising to Lm1.90 before closing at Lm1.899, 2.10 per cent higher. At the end of the week the best bids were for 2,000 shares at Lm1.87 and the best offers started at 1,500 shares at Lm1.898.

MIA hardly fogged a mirror: only 1000 shares changed hands at Lm1.40 on Wednesday. At the end of the session the best bid was for 500 shares at Lm1.402 and the best offer was for 4,600 shares at Lm1.46.

In small cap stocks LOM had another brilliant week: it marched ahead from a Lm5.35 open to a Lm5.45 close on Monday, maintaining this price during Tuesday's session. It did not trade on Wednesday and was dormant till the last three minutes of yesterday's session, when one buy order for 9644 shares sucked up all supply at Lm5.50, Lm5.55, Lm5.60 and part of the supply at Lm5.75. This is a 7.5 per cent gain on the week after the previous week's equally spectacular 10.3 per cent gain. LOM was unusually active this week, with turnover by value of Lm243,721 accounting for 33 per cent of the week's equity turnover by value.

SFC started the week at 75c and stayed at this level on Tuesday. On Wednesday, a buy order took the price straight up to 80c where 1903 shares changed hands. SFC did not trade again, marking a welcome 5.26 per cent gain for the week. Last Wednesday SFC announced all the resolutions proposed at the Board meeting of April 26 were approved at their Annual General Meeting held on June 28.

Global Financial Services Group p.l.c (GFSG) only traded on Monday at Lm2.03 and yesterday rising to Lm2.06 by the end of the session for a weekly gain of 1.5 per cent.

MSI's first post 1:1 share split trade took place on Tuesday at Lm2.65 -effectively at an unchanged price as the last pre-split trade took place at Lm5.299. The extra shares allocated due to the share split were available for trading following Wednesday's trading session. On Wednesday, MSI fell to Lm2.60. It fell to Lm2.55 at the start of yesterday's session but climbed back to Lm2.60, closing at this level for a weekly drop of 1.9 per cent.

Last Tuesday MSI announced that since Corporacion Mapfre SA intends to restructure certain non-Spanish investments into a holding company named Mapfre International SA (which is fully controlled by Corporacion Mapfre SA), 2.625 million ordinary shares held by Corporacion Mapfre SA in MSI, will be transferred to Mapfre Investments SA. Such transfer is a mere change of nominal ownership and does not imply a change of control over the shares.

International Hotel Investments (IHI) and the Alternative Companies List's, Datatrak Holdings plc (DTK), closed the week unchanged at r0.90 and 30c respectively.

Plaza Centres plc and Fimbank plc did not trade. Neither did Suncrest Hotels who released their accounts for the six-month period to April 30, 2006 on Monday 26th. Loss before tax widened from the Lm493,000 in 2005 to Lm513,000 with Earnings Per share moving from (4.9) to (5.1)

Turnover by value in the Corporate Bonds market was just over Lm42,800 spread over 13 deals. The Government Bond Market was more active especially on Tuesday, with 47 deals taking place this week for a total turnover by value of Lm734,515.

Financial Planning Services Limited is licensed by the MFSA to provide investment services, including stockbroking. The Directors or related parties, including the company, and their clients, are likely to have an interest in securities mentioned. This article is only meant to provide information and is not intended to give investment advice. The value of securities, and the currencies in which they are denominated, may go down as well as up.

Report by Financial Planning Services Limited, tel. 2134 4244, fax. 2134 1202, email: info@bonellofinancial.com