Big banks drag index below 5000 again

Small cap stocks provided the proverbial silver lining in an otherwise grey sky, clouded by disappointing drops on the Big Banks. These led the MSE index to below 5,000 at 4,995.943 -the lowest close since the March 28 all-time high. Bank of Valletta plc (BOV) tumbled 7.5% to Lm3.70, HSBC Bank Malta plc (HSB) just about held its head above the Lm2 mark while other index heavyweights Maltacom plc (MLC) and Malta International Airport plc (MIA) closed the week flat.

Respite came from Medserv plc - the week's best performer which advanced a robust 6.1% to Lm1.40 in the second week since its listing. Simonds Farsons Cisk plc had an equally buoyant week gaining 2c to 78c on Tuesday and a further 2c to 80c on Thursday to end the week up 5.3%. Middlesea Insurance plc's positive run extended to its third week: The price gained ground from session to session starting at Lm2.15 on Monday, progressing to Lm2.22 by Friday to post a 4.2% gain on the week.

International Hotel Investments plc (IHI) was one of the week's most widely traded stocks. Monday's very active session saw a stream of buy orders sweep up existing supply in a price range of €0.98 to €1.00 as 81,378 shares changed hands. Tuesday's quieter trading saw IHI advance to an all-time high of €1.02 - the price at which most of Wednesday's deals were also effected. It did not trade on Thursday and was active again on Friday when it closed at €1 for a weekly gain of 3.09%.

On Wednesday IHI announced that the agreements signed on August 10, involving Wyndham Hotel Group International Inc (WHGI), Corinthia Palace Hotel Co Ltd and CHI Ltd were successfully concluded. CHI is now owned 70% by IHI and 30% by WHGI.

On the opposite side of the spectrum, the Big Boys did not fare at all well.

BOV led the rout, posting the worst performance on the week, down a despondent 7.5%. The positive annual results did not provide the expected boost in price with most of Monday's and Tuesday's trading carried out at Lm4. During Wednesday's moribund session a mere 1,230 shares changed hands between 10.41am to 10.57am, closing 4c lower at Lm3.95. The reaction to media comments made by BOV Chairman, Mr Rod Chalmers, earlier on in the week regarding the sustainability of the Bank's profits' growth filtered through to the market on Thursday. BOV collapsed from a Lm3.94 open to Lm3.70 by mid-session, sinking to the bottom of the allowable trade range of Lm3.688 in the final deal. Yesterday's session, the last one to be eligible for the 11c gross (7c15 net) dividend, saw BOV trade around Lm3.68 and Lm3.70, closing the day and the week at this level. BOV was the week's most active equity with 88,232 shares changing hands, which accounted for Lm336,536 - or 40% - of the week's total equity turnover. At the end of trading, the best bid was for 2,000 shares at Lm3.68, while the best offer for 140 shares stood at Lm3.75.

HSB was up almost 2% to Lm2.085 on

Monday, remaining flat at Lm2.08 on Tuesday. In the first 45 minutes of trade on Wednesday HSB climbed to Lm2.10 but was back to Lm2.08 by the end of the session. HSB started Thursday at this level but after more than a whole hour's silence, the equity traded again skidding to Lm2.075, Lm2.07 and closing at Lm2.06. The slide carried on into Friday as a deluge of sale orders sent the price crashing from a Lm2.06 open to Lm2.01 close, ending the week 1.7% lower. Turnover for the week totaled 137,337 shares for a market value of Lm282,877. At the close of trade best bids totalled 1,250 shares at Lm2.01, while supply for a mere 15 shares started at Lm2.02.

Only 18,322 shares of MLC shares were traded last week. The price rose from a Lm1.55 open to a Lm1.57 close on Monday. Both Tuesday's and Wednesday's trade consisted of a single deal, one for 760 shares and the other for 250 shares, both at Lm1.58. On Thursday the price fell from Lm1.57 to Lm1.551 with most of yesterday's deals executed around the Lm1.55 mark, closing at Lm1.551 to end the week close to flat, just 0.1% ahead. At the end of the session, the best bid was for 313 shares at Lm1.551 and the best offer for 2,500 shares at Lm1.594.

MIA was flat at Lm1.38 with all 12,388 shares changing hands at this price. At the end of the week, best bids were for 400 shares at Lm1.36, while offers for 2,931 shares started at Lm1.38.

In other small cap stocks, Lombard Bank plc rose from Lm4.81 to Lm4.83 to close the week 0.6% ahead. Turnover was a modest 4,541 shares for a market value of Lm21,851. Plaza Centres plc was stable at 68c, with a turnover of just 11,300 shares at a market value of Lm7,684. Fimbank plc only traded on Tuesday (closing practically flat at US$1.70) the day it announced that with effect from October 19, they have been granted a licence by the Dubai Financial Services Authority to operate as an Authorised Firm within the Dubai International Financial Centre. GlobalCapital plc was off its record high on Monday, trading at Lm2.31 and Lm2.319. It only traded again, dropping 1c9 to Lm2.30 on Thursday, when all of 60 (sixty!) shares changed hands.

Last Monday trading in Suncrest Hotels plc (SCR) was suspended. A company announcement later gave details of the parent company's proposal to the Listing Authority to purchase SCR shares for cash or by conversion of their shares into bonds to be issued by AX Investments Plc and guaranteed by its parent company, AX Holdings Ltd.

Datatrak plc was down to 30c on Tuesday but recovered to 31c on Thursday, the level it traded it on Friday, to close the week static on turnover of 9,012 shares.

The market in Malta Government Stocks slowed down this week with turnover by value of just over Lm581,000, spread over 54 deals. The Corporate Bond market was much more active this week with 50 deals completed for a turnover by value of Lm99,727.52. On Thursday the Lm2,000,000 6.25% Simonds Farsons Cisk Bond 2006 - 2008 was redeemed. On the same day trading in the 6.7% Tumas Investments plc Secured Notes 2006 ceased as this is due for redemption on 22nd November 2006.

Report by Financial Planning Services Limited is licensed by the MFSA to provide investment services, including stockbroking (IS/3608). 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