Updated: Bank of Valletta shares recover
(Adds MSE decision to lift trade range again)
Shares in Bank of Valletta recovered this morning, selling at the top of their trading range at the stock exchange after falling 17 percent yesterday, when the trading range was temporarily lifted.
The trading range was temporarily lifted yesterday after shares remained unsold for two days despite being offered at the bottom of the trade range in the wake of the collapse of Lehman Brothers, which BOV said would have a modest impact on its profitability.
However demand for the BOV shares surged this morning and the shares which were on offer sold at the top of the trade range, raising the price by 38c2 (11%).
Meanwhile, with several traders today having offered to buy BOV shares at prices above the trade range, the Malta Stock Exchange said this afternoon that it was removing the trade range until further notice.
The mood in Malta reflected an upswing of sentiment in trading abroad, where banking shares also rose steeply after central banks acted decisively to restore order in financial systems.
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R Caruana
Sep 19th 2008, 23:24
Markets can be easily manipulated. Lehman, & Bear S were brought down by speculators and makets in US only rallied after new regulations on short selling.
The market in Malta is much easier to manipulate, given the ridiculous volumes someone with just over 100k can make easy money in three stages:
1 Buy a so called large cap gradually over a couple of weeks to push price upwards and ignite a small false rally,
2 So doing, other investors will see price recovering and would mistakenly assume a bottom is in place and buy themselves.
3 Once the rally runs out of steam, the original investor will, all of a sudden start offloading his shares so the price will tumble to its original bottom.
For some this may be investing, as saying goes price can go up as well as down. But this is actually equal to stealing, perhaps by stealth but just as bad!
Now we have a liquid currency, so MSE should either promote itself to attract more investors or else close shop. One last word of advice to normal investors, don’t attempt to identify bottoms or tops, but invest only in value and long long term.
Ambrose Muscat
Sep 19th 2008, 14:10
This charade saw the stock of one of Malta's prime credit institutions move south by 17% on one day only to bounce back the following. In both cases the volumes can be considered negligable by international standards. The case for small exchanges is a subject for debate. There is the obvious consideration of national pride and one cannot deny that small exchanges like the MSE allow local companies to go to the market that would quite frankly not even be considered by any international exchange. But if we are to have an exchange there is a compelling need for some market making facilities to be in place. I am aware that there had been discussions on the matter in the past. Perhaps the MSE can illuminate us further. This can only increase confidence in the local bourse.
Philip Paris
Sep 19th 2008, 13:34
The US Securities Commission had to wait this long to take action.
To little to late for a lot of investors, companies and employee's who lost everything.
I would not hold my breath that this is over.