Trading turnover torpor

The second half of 2006 plodded in, with activity in the equity market slowing to the lowest weekly total for the year, barely hitting the half a million mark at Lm502,196. This in stark contrast to the vibrant lift-off to the start of 2006, when equity turnover by value for the four-day trading week was nearly four times as much at Lm1,963,506.

Some welcome respite from the week's tedium was provided by Maltacom (MLC) and Malta International Airport plc (MIA) which recovered from the previous week's torpor, to rise 4.8% and 4.3% respectively. The big banks barely budged, trading in a narrow range with Bank of Valletta (BOV) closing the week unchanged at Lm4, while HSBC Bank Malta (HSB) slipped 0.5% to Lm2.19.

In small cap stocks, Global Financial Services Group (GFSG) advanced 4.4% to a year's high of Lm2.15 in a last minute deal on Friday, while Lombard Bank (LOM) gave up some of its recent gains to close 3.5% lower at Lm5.55. The MSE Index closed up a negligible 0.4% at 5,449.65.

BOV opened the week flat at Lm3.999 and then moved up to Lm4 on an 800-share deal. After not trading for a whole hour, selling pressure dragged the price down to an intra-day low of Lm3.94, inching up to Lm3.95 in the final seconds.

It regained its footing on Tuesday, albeit on two minuscule deals, trading at Lm3.98 and Lm4. It was back at Lm3.98 during Wednesday's equally inactive session, maintaining this price for most of Thursday's session, when the final two deals for a total of 172 shares pushed the price up to Lm3.999. On Friday, trading started at this latter price, rising to Lm4 to close at this level, unchanged on the week. At the end of the session, bids for 3,904 shares were at Lm3.95 while the best offers totalled 7,371 shares at Lm4.

HSB opened Monday where it left off the previous Friday - firmly entrenched at Lm2.20, with all 16,378 shares changing hands at this price. On Tuesday all activity was carried out in the Lm2.19-Lm2.20 range, barring the final deal executed at Lm2.18. It bounced back to Lm2.20 on Wednesday, once again closing at this price. Thursday was much of the same: a handful of deals did trade at Lm2.199 but the closing price was again Lm2.20. On Friday HSB traded uneventfully at Lm2.20 till three minutes from the close, dropping a cent to Lm2.19 to close the day and the week 1c or 0.5% down.

At the end of trading, the best bid was for 9,000 shares at Lm2.181, while the best offer for 1,500 shares stood at Lm2.20.

MLC had a totally uninspiring start to the week with only 520 shares changing hands on Monday at Lm1.898. It shook off its recent lethargy and made some healthy advances for the next two days; it climbed to Lm1.949 on Tuesday and continued up on Wednesday as a series of buy orders swept up all outstanding supply up to Lm2.03. Slack demand dragged the price down to Lm2 on Thursday and lower on Friday. During Friday's session, the first deal - effected more than an hour into trade - was struck at Lm1.985 while the last deal was negotiated at Lm1.99. Nonetheless, although off its mid-week high, MLC is the week's star performer, up a very encouraging 4.8%. At the end of the week, the best bids were for 1,094 shares at Lm1.860 and the best offers started at 415 shares at Lm1.99.

After the close of trading Friday MLC announced, that further to the Parliamentary debate last Thursday, it wishes to state that: a) MLC has full title to the land at Qawra mentioned in the debate; b) MLC was not a party to the share purchase agreement between Government and Emirates International Telecommunications (Malta) Ltd which acquired Government's 60% stake in MLC; and c) whatever is eventually decided concerning the acquisition or disposal of any land by the company will be done following full deliberations by the board of directors acting in the best interest of MLC as a whole.

MIA recuperated somewhat from its recent stupor: it opened Monday at Lm1.41, closing at Lm1.43, rose to Lm1.45 on Tuesday and advanced to Lm1.46 on Wednesday. It did not trade for the rest of the week, locking in a welcome 4.3% gain. At the end of the session, the best bid was for 200 shares at Lm1.405 and the best offer was for 1,400 shares at Lm1.445.

In small cap stocks:

After a nondescript week at Lm2.03, GFSG burst into action in the dying seconds of Friday's session to close at a 2006 high of Lm2.15. Strong demand saw all existing supply between Lm2.03 and Lm2.15 scooped up in one deft move, for a relatively busy session in which more than 38,000 shares changed hands.

LOM lost ground after its recent bout of outstanding performance. It was stable at Lm5.75 on Monday and only traded again on Friday, shedding 20c in a single deal for 1,462 shares to close the week 3.5% lower. Fimbank (FIM) too closed lower; after a stable start to the week at US$1.92, Friday's trades were effected at US$1.90, 1% down. Middlesea Insurance plc (MSI) lost a cent to Lm2.59 on Monday. It only traded again on Wednesday, slipping another 4c to close at Lm2.55 (pre-split Lm5.10) for a weekly drop of 1.9%

International Hotels Investments (IHI) only traded on Wednesday and Friday, an irrelevant €0.001 higher at €0.901 on turnover of 19,436 shares while Simonds Farsons Cisk (SFC) was stable at 80c.

Suncrest Hotels (SCR) and Plaza Centres plc (PZC) did not trade. Neither did the Alternative Companies List Datatrak Holdings (DTK).

The only listed Closed Ended Collective Investment Scheme, Santumas Shareholdings plc this week traded at Lm1.00, 6.38% up.

Volume in Malta Government Stocks was relatively strong with turnover by value topping the Lm7.7 million mark. The bulk of this was transacted in 7.2% MGS 2008 (II) with turnover in excess of Lm7.3 million. The price of this stock dropped marginally by 0.075%. In fact, the indicative bid prices issued by the Central Bank are all fractionally lower.

The corporate bond market was quiet, as it has been over the past few weeks, with 29 deals taking place this week for a total turnover by value of Lm72,530.

Financial Planning Services Ltd is licensed by the MFSA to provide investment services, including stockbroking. The company is involved in acting as sponsoring stockbroker and corporate stockbroker. The directors or related parties, including the company, and their clients, are likely to have an interest in securities mentioned.

Financial Planning Services Ltd., tel: 2134-4244, fax 2134-1202, e-mail matthew@bonellofinancial.com, elaine@bonellofinancial.com