Lombard Bank bucks the trend

Lombard Bank Malta plc ranked as this week's top performing equity as the share price advanced by 4.9 per cent to €2.69.

Lombard's equity had dropped to a low of €2.56 on July 27 and the decline in price generated increased buying interesting helping the equity recover by 5.1 per cent since the recent low.

This upturn mainly took place this morning when the share price advanced by 3.5 per cent on increased activity totalling over 17,800 shares.

The share price of Bank of Valletta plc edged minimally higher to €2.69 giving a weekly increase of 3.9 per cent.

Meanwhile HSBC Bank Malta plc's equity dropped to the €2.80 level at the start of this morning's session but recovered to €2.89 on the last day to gain entitlement to the net interim dividend of 5c3 per share.

HSBC's share price closed the week 3.2 per cent higher in response to the 19 per cent increase in half-year profits announced last week.

The gains in the share prices of the three commercial banks helped the MSE Share Index close in positive territory for the first time in five weeks despite the third largest cap International Hotel Investments plc closed 3.7 per cent lower at 79s.

The 1.4 per cent gain in the local equity market contrasts to the sell-off across global equity markets with the major European indices touching 14-month lows this morning after the Dow Jones index in the US yesterday recorded the biggest drop in a single session since late 2008 of 512.76 points or 4.3 per cent.

Later on today, Middlesea Insurance plc is scheduled to publish its financial statements for the first half of 2011.

Earlier this morning, Middlesea stated that it was informed by Mapfre Internacional S.A. that it will proceed to issue a Mandatory Bid to the shareholders of Middlesea following the acquisition of a controlling interest in the company, in terms of Chapter 11 of the Listing Rules.

On July 29, Mapfre purchased 18.3 million Middlesea Insurance plc shares from Munich Re at a price of 63c per share via a special trade affected on the Malta Stock Exchange.

Following this transaction, Mapfre Internacional S.A. became the majority shareholder in Middlesea with a shareholding of 50.98 per cent. Those shareholders of Middlesea Insurance plc who were on the company's share register as at close of business on July 29 will receive a copy of the Offer Document together with an Acceptance Form. However, no details have yet emerged on the price established for the mandatory bid and the acceptance period during which Middlesea shareholders may accept the offer.

While international equity markets tumbled this week, the search for safety was reflected in a sharp upturn in bond prices in the US, the UK and also in Germany.

This was also reflected locally with the Rizzo Farrugia MGS Index advancing by 0.6 per cent this week to its highest level since January 19. However, although the indicative bid price of the Central Bank of Malta for the 5.25 per cent MGS 2030 bond increased by 89 basis points to 103.44 per cent, the market price only added 41 basis points to 102.97 per cent.