Three-day trading trickle

With Wednesday's St Joseph holiday this year falling in Easter week, the Exchange only traded last Monday, Tuesday and on Maundy Thursday. To an extent it is understandable that in this three-day trading week turnover by value was the second lowest for the year-to-date at €656,345. The MSE Index treaded water, virtually unchanged at 4651.548, down a mere 0.16% for the week. Next Friday will be the last trading day of the month and this year's first quarter. But the date is much more relevant, as it will also mark the second anniversary of the current bear market which today sees the Index down 30% from its March 28, 2006, all-time high. In fairness, 90% of that decline had happened by March 20 of last year, so that in the 12 months since then the Index is only down 3.35%

You may not be feeling too good about this, but, a brief overview of the cataclysmic convulsions in the rest of the world's markets may go a long way towards providing some consolation.

Bear Stearns, a Wall Street bank that lived through and survived the Wall Street crash of 1929 and the Great Depression of the 1930s, went to the wall - as a consequence of the credit crisis caused by the sub-prime scandal. Over last weekend, JPMorgan Chase, aided by the Federal Reserve, which assured $30 billion of the bank's assets, offered $2 a share to acquire Bear Stearns. The latter's share price, at its peak last year stood at $172 and earlier this month had traded at $60. As confidence collapsed, so did the share price of the legendary bank Lehman Brothers which tanked 20% before making a comeback on the basis of better than expected results - even if these were 57% lower than the previous year's.

Although the Federal Reserve Open Market Committee was scheduled to meet last Tuesday, for the first time in nearly 30 years it met on a weekend last Sunday night, and reduced its discount rate by 25 basis points to 3.25%.

If the objective was to pre-empt the expected carnage when Asian markets, followed by European ones, opened last Monday, it failed miserably. The world's major markets led by Japan, the UK, France and Germany saw their Indices touch 2007/8 lows by Monday's close of trade. When the Fed did meet on Tuesday, it cut the Federal Funds rate - for the sixth time in exactly six months - by 75 basis points (0.75%) to 2.25%. Its first major interest rate cut, intended to stall the then budding sub-prime crisis, was last September 18th when rates were reduced from 5.25% to 4.75%.

In the UK, speculation and scaremongering about the potential exposure of UK Banks to the credit crisis led the Financial Services Authority to issue an unprecedented warning on Wednesday. It said that it would be investigating trading in UK financial shares by short sellers and market manipulators saying: "We will not tolerate market participants taking advantage of the current market conditions to commit abuse by spreading false rumours and dealing on the back of them."

In our comparatively sheltered environment, we had one blinding stunner in Maltapost plc (MTP) which leapt ahead by a remarkable 19.3% to €0.848. All other equities had a humdrum week with Simonds Farsons Cisk plc (SFC) in very distant second place with a 2.4% gain, while Middlesea Insurance plc (MSI) was the worst performer, down 2.8% to a 2007/8 low of €3.50.

Bank of Valletta plc (BOV) started the week 4 cents lower at €5.70 and hovered around this level on Tuesday. After Wednesday's public holiday, a stream of sale orders put the price under severe pressure on Thursday as it fell like a stone from a €5.65 open to a low of €5.40. However, a few deals milliseconds from the close, put BOV back up to €5.65 for a more contained loss of 1.6% on the week. Thursday's busy trading with 57,402 shares changing hands accounted for 68% of the week's total of 84,522 shares for a value of €472,934. This, in turn, contributed a massive 72% to the week's total equity turnover by value. At the end of the session, best bids for 331 shares started at €5.65 with offers for 1355 shares were at €5.70

HSBC Bank Malta plc (HSB), on the other hand, was flat, starting the week unchanged at €4.39 and rising 0.5% to €4.41 by Thursday's close. Interest was slack with just 16,595 shares changing hands in the three-day week for a total value of €73,067. At the end of the session, the best unsatisfied bid was for 2,200 shares at €4.405 while supply for 3,205 shares started at €4.41.

MTP enjoyed a spectacular week as it closed at successive highs of 75c on Monday, 80c on Tuesday and 84c8 on Thursday for an impressive 19.3% gain. While activity was moderately buoyant on Monday with 43,326 shares swapped, it slowed to a trickle by Thursday when just 2,022 shares traded - even if that single trade jacked the price up 6% for the day. It is relevant to note that at the end of the session, the price was well supported by a bid for 7,978 shares at 84c8. At this level, MTP has gained a gargantuan 70% from its January IPO price of 50c.

On Friday, MTP issued a company announcement which stated that Mohammed Ibrahim Hussain Marafie, a Kuwaiti, has notified the company secretary that he now holds a total of 1,407,126 shares in MaltaPost plc representing 5.0255% of the equity capital of the company.

With such a short trading week, a number of equities only traded on one day. Go plc only made an appearance on Monday as 3,000 shares changed hands at €3.029, 1% higher. Four equities traded only on Tuesday: International Hotels Investments plc in one deal for 700 shares a fraction lower at €1.034, MSI sank 2.8% to a new 2007/08 low of €3.50 on four deals totalling 2,006 shares worth €7033.40; SFC on the other hand, advanced 2.4% to €2.56 on a turnover of 7,725 shares. Crimsonwing Wing plc traded unchanged at 55c in a single trade for 4,658 shares.

Lombard Bank plc (LOM), Fimbank plc (FIM) and Malta International Airport plc (MIA) only traded on Thursday. LOM dropped 20c or 1.5% to close at €13 on two trades totalling 2,000 shares. FIM was practically flat on an 825 share deal at $1.74 while MIA lost 0.75% to €3.30 on an insignificant 200 share deal.

On Thursday, Datatrak announced that the extraordinary general meeting scheduled for April 4 will be held at the Mediterranean Conference Centre at 10 a.m.

Even the Government Bond market was very slow; turnover by value was just €620,843 with 13 deals struck in seven stocks. The corporate bond market saw 15 deals for a total turnover value of €72,122 while turnover value in the Treasury Bill market totalled €1.21 million.

Happy Easter.

This report was provided by J.G.P. Bonello, managing director of Financial Planning Services Limited, of Marina Court, G. Cali Street, Ta' Xbiex, which 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. E-mail: info@bonellofinancial.com or 2134 4243.