Stock market report

Friday 13 is unlucky for some. Last Friday, it certainly was for the Shanghai Index which dropped a staggering 14 for the week - a financial earthquake of proportions as powerful as the one that hit Sichuan a month earlier. The drop in neighbouring Hong Kong's Hang Seng Index was just over half as much at 7.4% for the week. Off mainland Europe, the UK FTSE 100 registered a drop - as we write - of 4.35% for the week, while the US Dow Jones' loss for the week, by Thursday's close, was 3.7%.

The major causes are ascribed to fears of inflation and that the credit crunch, far from being close to the beginning of the end, is now perceived - in some contrarian quarters - to be much closer to the end of the beginning.

By comparison, we were not as unlucky in Malta. The MSE Index 'only' slipped just a sliver over 1% for the week. In the year to date tables, Shanghai's Index stands at -45.5%, whereas Malta's Index is 'just' 16.4% down. But with the bear market in its 27th month, this bear hug is now becoming stifling. Malta's equity turnover by value for the week, at €612, 611 - the year's fourth lowest - is statistically irrelevant to any other world market.

Bank of Valletta plc (BOV) provided the MSE with a faint glimmer of hope, advancing 2.6% off its previous lows. However it was not enough to keep the index from sinking further to yet another 2008 low of 4,128.503, as HSBC Bank Malta plc (HSB) continued to flounder, falling 4% to hit a 33-month low of €3.60.

BOV finally got some respite, as it gained 1.7% early in the week, leaving its 2008 low of €4.62 behind. It even managed to spike to intra-day highs of €4.74 and €4.73 on Tuesday and Wednesday respectively, but always fell back to the €4.70 level. Friday saw it climb to and keep the €4.739 level, to end the week 2.6% ahead. Turnover totalled 43,437 shares for a value of just under €205,000, equivalent to 33% of the week's total equity turnover by value. At the end of the session, the best bid was for 4,015 shares at €4.71, while the best offer was for 536 shares at €4.739.

HSB traded just a cent lower at €3.74 on Monday, but continued to slide inexorably, stumbling to €3.65 on Tuesday and to a year's low of €3.60 on Thursday, ending the week at this level. At this price, HSB was the week's worst casualty, 4% down on a turnover of 44,799 shares for a value of €163,854. At the end of trading, bids for 5,000 shares started at €3.597, while offers for 1,017 shares were at €3.60.

Go plc was stable at €2.65 in very thin trade with just 6,649 shares negotiated over a three-day span. At the end of Friday's session, best bids for 1,000 shares were at €2.61 while offers for 4,344 shares started at €2.65.

International Hotels Investments plc was even more somnolent with a mere 780 shares changing hands over two days and the price dropping 1.1% to €1.06.

Malta International Airport plc (MIA) was comparatively busy on turnover of 11,240 shares effected in a tight range of €3.11 and €3.12, closing unchanged at the latter price. At the end of trading, a bid for 300 shares stood at €3.11 with offers for 1,200 shares at €3.20. On Wednesday, MIA announced the restructuring of its departments to cater for the expansion of its core business and daily operations. Mario Psaila Savona was appointed head of non-aviation services, while Alan Borg was appointed head of airline marketing. Austin Calleja's contract as chief finance officer and executive director was renewed. Parks Ltd, the newly established 100% subsidiary of MIA, has taken over the operations of the car parks at the air terminal.

Fimbank plc too did not rock the boat and for the sixth consecutive week traded in a range of $1.88-$1.89. Turnover was a respectable 93,340 shares for a value of €113,658.

Small cap stocks saw very thin trade this week with the exception of Maltapost plc, which took off from a €0.78 start, climbing to €0.80 by Wednesday on moderate buying activity. It peaked at €0.81 on Thursday, but ended Friday back at €0.80 - a 2.6% gain for the week. Turnover amounted to 68,629 shares for a value of €54,455.

Plaza Centres plc gained 1.5% to close the week at €1.725, with just 3,818 shares exchanged. Trade in Simonds Farsons Cisk was even poorer as the price fell back 0.7% on a turnover of 1,076 shares.

Global Capital plc only traded on Tuesday when 2,720 shares changed hands; the price fell back 1.8% to a year's low of €2.70. Grand Harbour Marina plc only traded on Wednesday, practically unchanged at €2.049 on a 1,425 share deal, while Crimsonwing plc (CW) held its €0.50 price tag for the week's three deals for 6,500 shares.

On Wednesday, CW announced that it has entered into a share purchase agreement for the acquisition of the total issued share capital of VDA Informatiebeheersing BV, a company based in Hilversum, The Netherlands, for a total consideration of €1.9 million. The transaction is expected to close on or around the first week of July. CW has deemed it beneficial to fund this acquisition through a combination of cash and debt financing of €1.5 million. This allows CW the capacity to continue to pursue its strategy with further future acquisitions. The company states that this acquisition will lift its euro-based sales from 25% to 45% of overall group revenues, thereby significantly reducing the impact of Sterling/Euro exchange rate fluctuations.

In the Government Bond market, turnover by value amounted to €2.8 million with 49 deals struck in 14 stocks. In the corporate bond market, there were 11 deals for a total turnover value of €117,538. Turnover value in the Treasury Bill market totalled €1.26 million.

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 call 2134 4243.