HSB's Lm2 support level breached

For the first time in exactly three months, weekly turnover on the Malta Stock Exchange exceeded the Lm1 million mark, totalling Lm1,090,034. The last time that this happened was in the week ending September 1, when turnover by value hit Lm1,766,139.

The MSE Index finally snapped a five-week losing streak when it closed 0.4% up at 4,905.807, mainly thanks to Bank of Valletta plc's (BOV) 2.8% gain on the week. The gain would have been more pronounced had it not been for HSBC Bank Malta plc's (HSB) relatively contained 1% loss.

What is more ominous is HSB's Friday closing price of Lm1.99 - just 2.6% above its 2006 low of Lm1.9375 on January 6 (the equivalent of Lm7.75 pre-bonus share issue). Why ominous? Because HSB had, till Friday, managed to remain above the psychological support level of Lm2 for all of November.

Should this breach imply a fresh, lower support level, HSB, as the major constituent of the MSE index, could drag it down with it. On the other hand, could this be the post all-time high low point?

A review of trading of HSB over the past week shows that it started on Monday where it had left off the previous Friday at Lm2.01, went up to Lm2.02 and, after a near 30-minute lull, went back down to Lm2.01, closing at Lm2.011 with 60,080 shares changing hands.

The next day's turnover totalled 47,471 shares, all traded at Lm2.01, with activity peaking on Wednesday with more than 100,000 shares traded for a turnover of Lm201,090 by value - 90% of the session's total.

HSB traded all day in the very tight Lm2 to Lm2.01 range. In three minutes, between 11.12 and 11.15 a.m., two sale orders, one for 22,190 and another 58,485 shares, hit the market like a tsunami, wiping out all outstanding demand on the trading board at Lm2. As fresh buy orders surfaced at Lm2, these were immediately satisfied.

On Thursday HSB paused for breath as only 15,495 shares traded. It first traded at Lm1.992, then Lm1.99, and finally clawed its way back for a Lm2.01 close.

HSB traded flatly at Lm2.01 for almost an hour on Friday, dropped to Lm2 and lost its footing once again to close at Lm1.99 - its lowest close in 11 months. At the end of trading best bids totalled 4,300 shares at Lm1.98, and supply for 1,347 shares started at Lm1.999.

By comparison BOV was the week's top performer with a sprightly near 3% gain. It started the week on the right foot up from a Lm3.521 open to a Lm3.535 close, dropping slightly during trading to Lm3.52.

On Tuesday the upward momentum was maintained as BOV opened at Lm3.54, dropped to Monday's close, then picked up again to reach a closing high of Lm3.60. During Wednesday's slow session the price ranged between Lm3.595 and Lm3.60, opening the following day at Lm3.597, and closing at Lm3.599.

Friday saw BOV trade virtually unchanged (Lm3.599-Lm3.60) - dipping momentarily to Lm3.59 and recovering to a Lm3.599 close three minutes from the final bell. At the end of trading, the best bid was for 970 shares at Lm3.591, and the best offers for 2,455 shares stood at Lm3.599.

BOV said in a company announcement on Wednesday that its 33rd annual general meeting will be held on December 20. These are the resolutions that will be presented: a) approval of the profit and loss account and balance sheet for the year ended September 30 and the directors' and auditors' report; b) approval and payment of a gross dividend of 11c per share; c) reappointment of the auditors; and d) appointment of directors.

Maltacom plc's (MLC) share price ended the week virtually unchanged (0.33% down) on a turnover of 30,305 shares. It traded flatly at Lm1.49 on Monday and for the opening deals on Tuesday, then closed at Lm1.481, six minutes from the end of trade.

Wednesday's two deals were completed at Lm1.481 and Lm1.50. It opened on Thursday at Lm1.50 and closed at Lm1.499, maintaining this price on Friday before dropping to Lm1.48 and then closing the week at Lm1.49.

At the end of the session, the best bid was for 600 shares at Lm1.49 and the best offer for 1,100 shares at Lm1.499.

Malta International Airport plc (MIA) only traded on Thursday and Friday. Its solitary deal on Thursday for 150 shares was executed at Lm1.34. On Friday one order for 4,309 shares pushed the price up from a Lm1.35 open to a Lm1.37 close - registering a week-on-week gain of 2.62%, making it the second best performer of the week.

At the end of the session, best bids were for 3,000 shares at Lm1.35, and offers for 2,309 shares started at Lm1.37.

On Thursday, MIA published its interim financial statements for the six months ending on September 30. These showed a 0.4% drop in turnover to Lm10,227,873. Profit before tax were marginally down (1.72%) to Lm4.13 million when compared to the same period last year.

Earnings per share fell by 1.73% from 4.04c to 3.97c. The board approved a net dividend per share of 2c5 to all shareholders on the Register on Wednesday - that is, investors who had bought shares by last Friday.

Lombard Bank plc continued on the upward swing, gaining another 2.4%. On Monday it forged a further 10c ahead, as one deal for 1,000 shares took the price up to Lm5.10.

Volume was uncharacteristically high on Tuesday with 18,436 shares changing hands. The price retained its firm footing at Lm5.10, before the final deal for 5,000 shares was struck another 2c higher at Lm5.12.

Middlesea Insurance plc only traded on Wednesday, gaining 2% for the week. The first deal at Lm2 meant a shedding of 6c from its previous close, but by the end of trading a 500-share deal was executed 10c higher at Lm2.10.

Medserv plc regained some composure as 50,000 shares were matched at Lm1.35 on Monday. It traded again at this price on Wednesday, ending the week in positive territory with a gain of 1.5%.

International Hotels Investments plc was virtually static as all trades last week were transacted at €1, with the exception of one deal on Tuesday at €0.99.

On Monday IHI announced that with effect from November 21, Mustafa Khattabi replaced Abdurazagh I. Zmirli as non-executive director.

Simonds Farsons Cisk plc stuck with the 80c price groove as the 3,278 shares traded this week (all on Monday) all changed hands at this price.

FIMBank plc's two deals for 11,110 shares were traded at US$1.70 on Tuesday. Another 6,500 shares traded at the same price on Friday, leaving the price unchanged for the week.

GlobalCapital plc went downhill, opening on Tuesday at Lm2.23, 6c down from the previous close, and shedding another 2c5 to close the session at Lm2.205. Thursday's sole 160-share deal pulled the price down as it nosedived a further 10c5 to Lm2.10 for a weekly loss of 8.3%.

Datatrak plc only traded on Friday. What must have been an evident human error saw the price inexplicably rocket to 54c from a 26c2 open. In fact, 18 minutes after the 900-share deal at 54c, a further 10,000 shares again traded at the closing price of 26c. This was still a week-on-week loss of 10% on the previous Friday's close.

In Malta Government stocks, the market was unusually active on Monday as the Central Bank broker offered for sale nine different stocks, which were transacted for a total turnover by value of Lm987,821.

It remained active on Tuesday and Wednesday but slowed down towards the end of the week. The 67 deals completed this week made for a total turnover by value of Lm1,576,345.

Activity in the corporate bond market was more contained as 21 deals were completed for a turnover by value of Lm119,062.

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