HSBC reels, then recovers

An aggressive start to the week gave way to a more relaxed pace as August rolled in. In fact, Monday's equity turnover by value accounted for 43 per cent of the week's total; each subsequent day saw equity volumes reduce, with yesterday's ranking the lowest at just under Lm55,000.

Out of the four large caps, HSBC Bank Malta plc (HSBC) was the best performer rebounding one per cent to Lm2.20, Bank of Valletta plc (BoV) was practically flat at Lm3.97 while Maltacom (MLC) and Malta International Airports plc (MIA) suffered a near identical loss of 1.5 per cent and 1.7 per cent respectively. There was little movement in small cap stocks with the exception of Lombard Bank (LOM) which progressed to its second consecutive rise this week to Lm5.99. The worst performer was the Alternative Companies List's Datatrak (DTK), down a whopping 13.3 per cent to 26c. The MSE index was practically static, up a minute 0.1 per cent to 5,454.059.

In Monday's opening trades BoV first slipped back to Lm3.95, then rose to Lm3.96 within seven minutes of the opening. A 78-minute silence was then broken by a buy order for 8,450 shares just six minutes before the close of trade. This order swept up all existing supply priced up to Lm4.05, for a firmly positive Monday close. However, the momentum was not kept up and BoV slipped back to successively minutely lower closes for the next three days: Lm3.99,8 on Tuesday, Lm 3.97,9 on Wednesday and Lm3.97 on Thursday.

Yesterday, BoV settled at Lm3.97, closing at this level to end the week an imperceptible 0.1 per cent lower. At the close of trade best bids totalled 125 at Lm3.96,9 while supply for 1,312 shares started at Lm3.97.

HSBC was a veritable hive of activity on Monday with 69,451 shares changing hands. The equity traded solidly at Lm2.15, occasionally rising a couple of mils but never falling below the Lm2.15 floor that was firmly established. Monday's session was the busiest with just under Lm150,000 worth of shares traded. Tuesday saw the price climb nimbly from Lm2.17 to Lm2.23 within a few minutes of the opening bell. The price settled comfortably at this level as investors bought shares on the last day available to be entitled to a 5c3 gross dividend. As the share went XD on Wednesday, the price fell by nearly the exact amount of the gross dividend, trading at Lm2.18,1 and Lm2.18,2, but closing at the former price. It inched up to Lm2.19 and Lm2.20 on Thursday, maintaining Lm2.20 consistently for all of yesterday, to end the week one per cent ahead. At the end of trading the best bid was 2,604 shares at Lm2.18, while the best offer for 2,091 shares stood at Lm2.20.

MLC was totally off-colour this week. It traded at the previous week's close of Lm1.97,9 on Monday but fell to Lm1.95 on Tuesday and another 2c5 to Lm1.92,5 by Wednesday's close. It did not trade on Thursday, but regained an element of composure yesterday, advancing to Lm1.94,5 and closing at Lm1.95. The day's volume however was a pathetic 510 shares. MLC closed 1.5 per cent down on the week. At the end of the session, the best bids were for 1,000 shares at Lm1.93,5 and the best offers started at 2,250 shares at Lm1.95.

MIA had a similarly uneventful week. It did not trade on Monday and fell two cents to Lm1.45 on Tuesday on turnover of just 1,200 shares. It was only active again on Thursday in identical turnover and at the same price, closing the week 1.7 per cent lower. At the close of trading best bids for 6,000 shares started at Lm1.42 while offers for 500 shares started at Lm1.46,9.

Small cap stocks had a humdrum week with little of note taking place.

LOM's extended its positive run for the second consecutive week. On Monday the price advanced from Lm5.90 to Lm5.99,9, a whisker off its all-time pre-share split high of Lm12, reached earlier this year (March 13). On Tuesday, it dropped nine mils to Lm5.99, trading at this level on Wednesday and Thursday. It did not trade yesterday to end the week 1.5 per cent higher. LOM's board of directors are meeting on Tuesday to consider and approve their interim results for the half-year that ended on June 30.

Middlesea Insurance plc had a very erratic start to the week falling from a Lm2.53 open to Lm2.50, recovering to Lm2.53 then spiking to Lm2.58 on a 139 share deal. It fell back for the next two days it traded: down to Lm2.53 on Tuesday and lower still to Lm2.50 on Thursday. It recovered to Lm2.55 yesterday to end the week 0.8 per cent down.

GlobalCapital plc, which last Tuesday changed their symbol code to GCL, was active early on in the week, hitting an intra-day all-time high of Lm2.30 and a new closing high of Lm2.29 on Monday. GCL only traded again on Tuesday, falling to Lm2.25, nonetheless up 0.5 per cent on the week. International Hotel Investments was only active on Thursday and yesterday, stable at €0.91. Simonds Farsons Cisk, Suncrest Hotels, Plaza Centres plc and Fimbank did not trade.

DTK traded after a month's absence, plummeting a shocking 13.3 per cent to 26c on turnover of 1,000 shares.

Activity in the government bond market compensated for the lower equity volumes this week, with turnover by value reaching a very respectable Lm3,588,298, spread over 46 deals. The most active stocks were the 4.8 per cent MGS 2016 (ii) - of which the Central Bank offered for sale Lm1.7 million on Thursday; and, on the same day, the five per cent MGS 2021 (i) of which the Central Bank offered Lm1 million for sale.

The new government bond issue, 5.1 per cent MGS 2014 (iii) Fungibility Issue, for Lm10 million - with an over allotment option of Lm9.25 million - was over subscribed with the demand totalling Lm33,475,000. The new issue was admitted to the official list of the Malta Stock Exchange yesterday and trading is expected to commence on Monday.

Activity in the corporate bond market was more moderate with just 29 deals taking place for a total turnover by value of Lm60,945.

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.

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