Shares in limbo, investors in purgatory

The sweltering heat is smothering any semblance of activity on the Exchange. Trading volumes are miserable and the apathy is palpable, with even fewer shares changing hands than in the previous week. Equity turnover by volume - at Lm212,961 - replaced the previous week's standing as the second worst for 2007.

This was in stark contrast to international markets, where the metaphorical heat was turned on, as the Dow Jones, in the US, first slipped badly on Tuesday, then stumbled and fell on Thursday. Fears of market meltdown saw the FTSE 100 lead the contagion, as it went through its worst one-day percentage drop since March 2003.

Back home, the larger cap equities were practically in limbo, with the largest capitalisation stock, HSBC Bank Malta plc (HSB) managing a meagre turnover of just 17,680 shares with a market value of Lm34,450. And this on the eve of the publication of its half-yearly results!

It is no consolation that International Hotel Investments plc (IHI), which has replaced Maltacom plc (MLC) as the third largest capitalisation stock, did not even trade. For the record, Bank of Valletta plc (BOV) topped the volume tables with a tepid turnover of Lm62,247 followed by MLC's Lm48,346.

Symptomatic of the slump is the reversal in the roles of the market's best performers. Small cap Plaza Centres plc (PZC) led the field with a gain of 6% for the week - and this with just three deals totalling 1,800 shares, with a market value of Lm1,176.

BOV opened and closed the week at Lm3.60 with a few minuscule variations throughout the five days; the lowest price was Monday's Lm3.58 close followed by a sprinkling of deals at Lm3.59, Lm3.598 and Lm3.599.

However the bulk of the week's 17,315 shares for a market value of Lm62,247 were transacted at Lm3.60 for the equity to end the week totally flat. At the end of trading total bids for 300 shares were at Lm3.59, with offers of 1,044 shares starting at Lm3.61.

On Tuesday, BOV issued a directors' interim report announcing that in the financial period commencing April 1 to date no material events and/or transactions have taken place that would have an impact on the financial position of the bank or the Group, requiring specific mention, disclosure or announcement pursuant to the applicable Listing Rule.

The board expects that, barring unforeseen circumstances, the profits in the second half of the current financial year will be marginally below those achieved during the first six months, but will show an improvement on the profits achieved in the second half of financial year 2006.

On Wednesday BOV announced that Tony Camilleri's application for early retirement has been accepted and he is relinquishing his position of chief officer Financial Markets and Investments, with effect from August 16. He will be replaced by Charles Borg, executive head at the CEO's office, and secretary of the bank's Executive Committee.

HSB opened at Lm1.96 but dropped 1c in slow trading. Tuesday's trading was nearly non-existent with a mere 456 shares changing hands, bringing the price down to Lm1.94. Wednesday's still lethargic trade saw HSB at Lm1.95 and Thursday's two deals saw the price return to Lm1.94.

The price see-saw saw HSB close at Lm1.95 on Friday to close the week 0.5% lower. At the end of Friday's session, bids for 2,039 shares were at Lm1.94, and the best offer for 11,081 shares stood at Lm1.95.

MLC advanced 1c to Lm1.41 on Monday's opening bell, staying at this level throughout the session. It was back to Lm1.40 on Tuesday during moderately active trading of 20,687 shares.

Two deals totalling 2,000 shares kept MLC at Lm1.40 on Wednesday. It did not trade on Thursday, and Friday's three deals were executed at Lm1.405, Lm1.415 and Lm1.42 for MLC to end the week 1.4% higher on a total turnover of 34,443 shares, with a value of Lm48,346.

At the end of trading, best bids totalled 4,257 shares at Lm1.405, with a supply of 8,380 shares at Lm1.42.

Malta International Airport plc (MIA) started out at Lm1.335 on Monday but immediately settled at Lm1.33, when a handful of trades were struck. It did not trade again till Friday when the half-yearly results for the six months ending June 30 were released prior to trading.

Following MIA's change in the accounting period, the 2007 interim results are being compared to the six months between January 1 and June 30, 2006, and not to the half-yearly figures issued last year. Profits before tax increased a wholesome 32% to Lm1.74 million, and earnings per share are up by 32.5% to 1c67 from 1c26.

Turnover for the period increased by 9% to Lm7.9 million. Passenger throughput increased by 5.8%, aircraft movements by 8.8% and cargo traffic by 4.5%. Staff costs increased by 2.5% to Lm1.8 million, and other operating costs were also up by 3.4% to Lm3.09 million.

An interim net dividend of 2c5 is being proposed and will be paid to shareholders on the register on Friday, i.e. investors who buy shares by Tuesday. The positive results pushed the price ahead to Lm1.349 and Lm1.35, although the day's turnover was restricted to just 3,718 shares.

MIA ended the week 1.5% up on turnover of 5,218 shares. At the end of the session, the closing price was supported by a bid of 2,970 shares at Lm1.35 and offers for 12,470 shares started at Lm1.37.

FIMBank plc was stable at $1.95 on Monday in a fairly active session when 48,650 shares changed hands. It traded again on Wednesday and Friday at the same price, ending the week unchanged on turnover of 74,558 shares equivalent to a value of Lm45,153.

Middlesea Insurance plc (MSI) slid lower on Wednesday, the only day it traded; it opened at Lm1.701 and settled at Lm1.70, as a sale order for 5,750 shares kept the price under pressure to close 0.6% down on the week.

On Thursday MSI announced that the board will meet on August 17 to consider and approve the financial statements for the half-year ended June 30.

Simonds Farsons Cisk plc (SFC) was the week's second best performer, gaining 3.1%, possibly as investors saw rising profits when the soaring temperatures drove consumers to slake their thirst on Farsons products. It traded for the first time on Wednesday, gaining 1c to 98c, then pressed forward on Thursday to regain the Lm1 mark, on a turnover for the week of Lm4,502.

An interim directors' statement issued on Wednesday, announced that during the first five months starting February 1, the group achieved its expressed performance objectives over the corresponding period in 2006.

One of the subsidiary companies concluded the sale of properties at a profit, which will result in a favourable impact on the financial results for this period. During the period under review, the investment programme embarked on by SFC proceeded on schedule and within budget in line with the company's business plan.

GlobalCapital plc, following last week's 9% drop, shed a further 10c - or 5.1% - to Lm1.90. This on a low volume of 155 shares, executed over two days.

Besides IHI, as mentioned above, the following equities did not trade: Lombard Bank Malta plc, Medserv plc, Grand Harbour Marina plc and Datatrak plc.

In the Government bond market, turnover by value reached Lm3.1 million with 63 deals traded. In the corporate bond market there were 38 deals for a total turnover value of Lm79,132. Turnover value in the Treasury Bill market totalled Lm269,969.

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