Will the big banks maintain earnings growth?

It has been quite a while since HSBC Bank Malta plc (HSB) took centre stage as top performer. It did so last week when it closed at Lm1.96 - a gain of 3.1% - as investors looked two weeks ahead to the expected publication of the bank's half-yearly report for the six months to the end of last month. HSB's rise helped the MSE Index close 0.8% up for the week at 4,894.133.

HSB also topped the turnover by value tables, accounting for 40% of the week's total, which, at Lm308,890, slotted into the third lowest position for 2007. Just under two months ago, HSB issued an interim directors' statement which gave a very upbeat review for the first four months of this year, with "profit before tax, net interest income and non-interest income showing good improvement over the same period for 2006".

This is a very good omen for the expected interim results, when one takes into account that the first six months' profits for last year were a record-breaking Lm20.6 million. If the earnings growth of 11.3% over the previous (June 2005) period is maintained, then expect HSB to announce another scorching, record-breaking Lm23 million pre-tax profits.

The largest capitalisation stock on the Malta Stock Exchange's Official List, opened the week barely ahead at Lm1.903 advancing to Lm1.91. During Tuesday's quiet session, HSB traded in a narrow range of Lm1.93 to Lm1.92, closing at this latter price. Wednesday was much of the same, except for the Lm1.93 closing price; it continued imperceptibly higher on Thursday, closing at Lm1.936. Friday saw the positive trend continue as HSB opened at Lm1.94, gained a cent to Lm1.95, hitting Lm1.96 in the final deal to end the week 3.1% up.

HSB was the most actively traded equity this week with the 63,624 shares changing hands for a value of Lm122,909. At the end of trading, the only bid was for a trivial two shares at Lm1.95, while the best offer for 1,466 shares stood at Lm1.96.

Bank of Valletta plc (BOV) was almost static for the first session of the week opening at Lm3.609 and closing at Lm3.611. It moved a cent lower on Tuesday, trading at Lm3.601 and ending the day at Lm3.60. Volume was, for these slack, summer days, healthy at 11,243 shares for a value of Lm40,476. The price was stable on Wednesday but slipped to Lm3.59 in embarrassingly low trade of just 500 shares on Thursday. The last day of the week saw BOV regain the Lm3.60 mark to end the week virtually unchanged, 0.4% down. Total volume for the week amounted to 22,205 shares for a market value of Lm79,953. At the end of the week total bids for 3,050 shares were at Lm3.58, whereas offers of 445 shares started at Lm3.599.

Maltacom plc (MLC) moved lower, down to Lm1.438 in Monday's opening deal, then closing minimally up at Lm1.44. Tuesday saw the price decline to Lm1.42 on low volume of just 1,754 shares, while on Wednesday it moved lower still to end the day at Lm1.415, in yet another slow session. After not trading on Thursday, MLC opened 5 mils lower on Friday, dropping another cent in the final deal to end the day at Lm1.41, and the week 3% down. Turnover for the four days it traded on totalled 26,841 shares for a value of Lm38,419. At the end of trading, best bids totalled 270 shares at Lm1.402, with a supply of 400 shares at Lm1.415.

Trading in Malta International Airport plc (MIA) was restricted to one deal each on Tuesday, Thursday and Friday. The price moved lower each time, closing down 1.5% to Lm1.33, on poor turnover which totaled just 3,600 shares. At the end of Friday's session, best bids were for 422 shares at Lm1.33 while offers for 1,000 shares started at Lm1.335.

MIA announced on Wednesday that the board is scheduled to meet next Thursday to approve the interim financial statements for the six months ended June 30 and to consider the payment of an interim dividend.

International Hotel Investments plc (IHI), which has moved up to the number three position by market capitalisation, since its recent restructuring and bonus share allocation, slumped to €1.00 on a 1,000-share deal on Monday. It maintained this level on Tuesday, then climbed to €1.05 on steady demand where the day's total volume totalled 24,289 shares. IHI was again very active in the same price range on Thursday on turnover of 58,603 shares. It closed the day and the week at this level - 1% higher. On Monday, IHI announced that with effect from July 5, Khaled Al Kamda and Richard Johnson have been appointed directors on behalf of Istithmar Hotels FZE.

Fimbank plc (FIM) was back in action on Tuesday after a week's break. The first of the day's two deals was effected 2c higher at $1.92, while the second was at $1.95. It only dealt again on Friday at $1.94, to end the week 2.1% higher.

Middlesea Insurance plc traded unchanged at Lm1.75 on Tuesday on slim turnover of just 500 shares. On Thursday the price shed 2c to Lm1.73 on two trades totaling 800 shares; it traded at the same price on Friday to close the week 1.1% down.

Simonds Farsons Cisk plc was stable at 98c throughout the week up to the penultimate deal on Friday when the price lost 1% falling to 97. The week's turnover totalled 10,359 shares.

Grand Harbour Marina plc (GHM) did not trade this week. On Tuesday GHM announced that on Friday, July 6, CNMI posted its copies of the Offer Document and Acceptance Form to all GHM shareholders appearing on the register on July 3. The offer is open for acceptance until noon on August 8, unless extended by CNMI. The "equitable price" - as defined in the MFSA Listing Rule 18.39 - is 73c4 per GHM share; however the offer price is 74c5.

Datatrak plc traded last Tuesday after three weeks' silence. It traded unchanged at 23c on Monday and Friday, the only two days it was active, with 1,900 shares changing hands for the risible value of Lm437!

In the Government Bond market, turnover by value reached Lm5.17 million with 23 issues traded. In the corporate bond market there were 23 deals for a total turnover value of Lm93,326. Turnover value in the Treasury Bill market totalled Lm85,889.

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