Protracted picnic for bears

The first week of the third quarter did not get off to anything like a roaring start - boring is far more descriptive. The contrarian spirit exhibited by the MSE Index last week, when it gained 3.36%, disappeared as Malta's stockmarket was carried away by the tide of bearish perspectives sweeping global markets. It's as if "when the bears came out to play, Malta's market joined the fray". The only difference is that whereas the US, UK and European markets have now crossed the Rubicon into bear territory - by exceeding the 20% drop from 2007 highs - the MSE Index is still 1.77% short of the required bear market benchmark from its 2007 high, although it is 37% below its 2006 all-time high.

Like Goldilocks, in our protracted bear market, investors may feel it is either too hot to dip into the market now, or the turnover volumes leave them too cold to care.Goldilocks felt that only baby bear's was just right. Given current attractive dividend yields and price earnings ratios, shouldn't the market be tasting like baby bear's porridge?

Trading was back to a hiccup rhythm, at best, as the banks gave up some of the previous week's gain on very thin trade. Equity turnover by value came in at the third lowest for the year with the only positive sparks coming from small cap stocks: Crimsonwing plc (CW) gained 1.9% to €0.54, while newly listed RS2 Software plc (RS2) added 1.87% to €0.815. On the negative side, GO plc (GO) topped the losers' list, down 3.8% to a new 2008 low of €2.50, followed by HSBC Bank Malta plc's (HSB) 2.5% drop to €3.80. The MSE index closed at 4,195.24, down 1.8% for the week.

Bank of Valletta plc (BOV) started the week on a quiet note, unchanged at €4.98 but slid back to drop 3c on Tuesday, 5c on Wednesday and another 3c on Thursday, closing at €4.87. This latter price was maintained on Friday for BOV to end the week 2.2% lower. Turnover totalled less than 20,000 shares for a value of €94,758. At the end of trading, the best bid for 1,898 shares stood at €4.80 with supply of 236 shares starting at €4.869.

HSB was stable at €3.90 in very thin trade on Monday but lost 10c over Tuesday and Wednesday on a total of 1,935 shares. It stabilised at €3.80 for the remainder of the week, closing the week at this level to suffer a 2.5% drop. Total turnover was very low at just 9,183 shares for the week for a value of €34,959. At the close of trading, the price was supported with a bid for 788 shares at €3.81 with offers of 9,000 shares at €3.85.

HSB announced on Wednesday that it has acquired 4,998 ordinary shares valued at €2.329373 each in HSBC Securities Services (Malta) Ltd from HSBC Global Asset Management (Malta) Ltd. As a result, HSBC Securities Services (Malta) Ltd has become a direct subsidiary of HSB.

GO was unchanged at €2.60 on Monday but plunged to €2.55 on Tuesday and lower still to a new 2008 low of €2.50 on Thursday. Friday's trades were carried out at this level leading GO to the week's worst performer spot nursing a 3.8% drop. Total turnover was a few shares short of 19,500 for a value of €49,617. Bids started lower - 4,695 shares at €2.45, while a sale order for 272 shares stood at €2.50. On Monday GO announced that Dr Ahmed Mahjoub resigned his directorship with immediate effect.

International Hotels Investments plc opened the week ahead, up to €1.073 but slipped to €1.05 on Thursday, the last day it was active, down 1.3% on the week. Turnover totalled 17,524 shares for a value of €18,550.

Malta International Airport plc only traded on Tuesday and Thursday on volume of just 6,600 shares. All the week's five deals were effected at €3.11 - 1c lower than the previous week's close. At the end of Friday's session, demand for 5,000 shares started at €3.06 with supply of 700 shares at €3.12.

Fimbank plc gained a cent to $1.89 on Monday when 8079 shares changed hands. It maintained this price for Tuesday's single 1430-share trade. The equity did not trade again for the rest of the week.

Lombard Bank plc (LOM) lost ground, first shedding 3c to €2.97 on a 1,000-share deal on Monday and slipping a further 2c on Friday to close the week 1.7% lower at €2.95. Volume was muted with just 2,200 shares changing hands. LOM announced on Friday that the board is scheduled to meet on August 26 to consider and approve the financial statements for the six months ended June 30.

Simonds Farsons Cisk (SFC) only traded on Monday and Tuesday climbing to successive 2008 highs of €2.75 and €2.76 on low turnover. SFC is just 3c5 off its all-time peak of January 2000.

Maltapost plc was stable at €0.83 in the early part of the week, but lost 3c on Friday to end the week 3.6% down.

Shares in Plaza Centres plc only changed hands on Tuesday; the price advanced by a fraction - 0.3% - on turnover of 5,300 shares; likewise, Grand Harbour Marina plc only traded on Tuesday advancing imperceptibly by 0.005 to €2.05 on 7,250 shares.

Latest arrival, RS2 added 1.9% as it traded at €0.81 and closed at €0.815. Volume however was very thin with just 2,500 shares traded.

CW was comparatively active on Tuesday on a single deal for 20,900 shares at €0.53. The final deal was effected at €0.54 - a gain of 1.9% for the week. CW announced on Tuesday that the board is scheduled to meet on July 15 to consider and approve the annual financial statement for the year ended March 31, 2008 and the declaration of a dividend.

6PM plc did not trade last week, but announced on Tuesday that Dr Ian Crockford resigned from the post of finance director with effect from last Monday.

Datatrak plc (DTK) announced on Monday that the AGM will be held on July 29 at 10 a.m. at the Mediterranean Conference Centre. DTK also announced on Thursday that the correct closing date for the nomination of directors by shareholders is next Wednesday. DTK did not trade last week.

In the Government Bond market, turnover by value amounted to €8.8 million with 46 deals struck in 12 stocks. In the corporate bond market there were 24 deals for a total turnover value of €196,093.15. Turnover value in the Treasury Bill market totalled €2.02 million.

This report was provided by J.G.P. Bonello managing director of Financial Planning Services Limited, of 4 Marina Court, 1 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 phone 2134 4243.