RS2 Software - MSE's lucky charm?

So oil climbed to yet another all-time high of $142, and gold - at $915 - was near a one-month record high. The US Dow Jones Industrial Average dived 350 points on Thursday night to a fresh 2008 low, and its lowest close in the last 18 months. Ominously, with tomorrow being the only trading day left, the Dow is on track for its worst June since the Great Depression.

But for us it was another week of Malta fuor del mondo. It may have been the NSO statistics, quoted by Finance Minister Tonio Fenech as showing that registered unemployment has reached record lows, while employment is running at the highest levels ever. Alternatively, it could have been the news that Lufthansa Technik and MCAST are to generate 500 new jobs. Maybe it was the launch of Phase 1 of Smart City, which is expected to eventually create employment for thousands. On a smaller, but more immediate scale, it could even have been the news that Emirates will be recruiting more Maltese cabin crew next week.

On the other hand, even though it only started trading on Friday, we could think of the newly-listed RS2 Software plc as the MSE Index's lucky charm. On its first day, at total of 30,000 shares were traded at the IPO price of €0.80.

Whatever the reason, when the stock market performs an about-turn, and suddenly leaps into positive territory - as it did last week - investors do not really care to look a gift horse in the mouth. Careful though: one swallow does not a summer make and, to curb elements of over-enthusiasm, this past week may also have been a dead cat bounce - a mini recovery in a bear market which, if it is to last as long as the previous one, should bottom out by Christmas. Time will tell.

The previous week's miniscule up-tick in the MSE Index provided the spark for last week's comparative explosion of 3.36%, which took the Index to a close of 4,273.023. HSBC Bank Malta plc (HSB) took centre stage as the top performer, closing up at €3.899 - a whopping 7.7% gain. International Hotels Investments plc (IHI) registered an equally impressive gain of 4.3%, while Maltapost plc (MTP) and Bank of Valletta plc (BOV) were up 1.84% and 1.43% respectively. The Index would have performed even better had it not been for the drop of 1.89% by the fourth largest market cap stock GO plc (GO).

BOV started the week with steady gains of five cents on Monday and another four cents on Tuesday, climbing back to reach the psychologically important €5 level, last seen six weeks ago. It closed flat on Wednesday and Thursday, before giving up two cents to close Friday at €4.98 - even if this was on a minute 398-share deal. Turnover totalled 50,743 shares for a value of €252,758. At the end of the session, the best bid was for 1,000 shares at €4.925, while the best offer was for 602 shares at €4.98.

HSB leapfrogged a total 27c9 for the week. It continued the previous week's positive trend gaining one cent on Monday, seven cents on Tuesday, 15 cents on Wednesday and five cents on Thursday. It paused for breath on Friday closing at €3.899. HSB's 7.7% gain on the week - and 9.83% gain from the previous week's low of €3.55 - was the index's market capitalisation grandee, in full regalia, re-establishing its market dominance. The turnover of 61,160 shares translated into a market value of €228,918, with bids for 330 shares started at €3.85 and offers for 60 shares at €3.899, at the close of trade.

GO shed five cents on Monday closing at €2.60 - a level last seen on January 12, 2004. It remained flat for the week, resulting in a 1.89% loss on a total turnover of 16,764 shares for a value of €43,606. At the end of Friday's session, best bids for 500 shares were at €2.59, while offers for 4,600 shares started at €2.60.

On Monday Go announced that Forgendo Ltd, the joint venture between Go and Emirates International Telecommunications (Malta) Ltd, had acquired a further 700,000 shares in Forthnet S.A's issued share capital, for a total consideration of €3,817,670.

IHI was also on a positive streak gaining 4.3%, even if on turnover of only 8,167 shares. It opened higher on Monday at €1.03, gained another three cents on Wednesday and rounded off the week at €1.064 on Thursday.

Malta International Airport plc only traded on Monday and Tuesday in a narrow range of €3.11 to €3.12, closing the week flat at the latter price. Turnover totalled a mere 8,300 shares for a value of €25,845. At the end of trading, a bid for 5,000 shares stood at €3.06 with offers for 2,000 shares at €3.15. MIA announced on Tuesday that the board is scheduled to meet on July 17 to consider and approve the interim financial statements for the six months ended June 30, and the payment of an interim dividend.

Small capitalisation stocks were generally flat: Fimbank plc held on to the $1.88 level as 11,499 shares changed hands; all the deals in Lombard Bank plc, totalling 9,400 shares, were struck at the unchanged €3 price level.

Middlesea Insurance plc (MSI) only traded on Wednesday, when 20,189 shares changed hands, retaining the previous close of €3.41. MSI announced that the following extraordinary resolutions were presented and approved by shareholders at the AGM held on Wednesday: a) the increase in share capital to 60 million ordinary shares each of a nominal value of €0.60 (equal to €36 million); b) a buy-back option whereby the company was authorised to acquire a number of its own shares - up to a maximum of 2.5 million - in the price range of €1.715 to €5.145. The buy-back authority will expire at the earlier of the next AGM or 18 months from last Wednesday. Moreover, 13 non-executive directors were appointed to the board.

Grand Harbour Marina plc (GHM) shed five cents on Wednesday closing at €2, but practically wiped out the loss on Thursday as a 1,000-share deal was struck at €2.045, for GHM to end the week 0.2% down on a total turnover of 9,000 shares.

Simonds Farsons Cisk (SFC) was virtually flat, a negligible 0.04% up on Wednesday, closing at €2.721 as 1,100 shares changed hands. SFC's 61st AGM was held on Thursday. All resolutions submitted were approved.

MTP gained 1c5 to €0.83 on Monday, retaining this level for the rest of the week. MTP was up 1.84% on a turnover of 144,121 shares.

GlobalCapital plc (GCL) was the week's loss leader shedding 3.7%, on total trade of just 2,899 shares, closing at €2.60. GCL announced on Monday that the company secretary Adrian Cutajar had resigned his post with immediate effect, and was replaced by Clinton V. Calleja.

In the Government Bond market, turnover by value amounted to €3.64 million with 40 deals struck in 18 stocks. In the corporate bond market, there were 19 deals for a total turnover value of €97,280. Turnover value in the Treasury Bill market totalled €2.79 million.

This report was provided by J.G.P. Bonello, managing director of Financial Planning Services Limited, of Marina Court, G. Calì 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.