Analysts fear stagflation in the US economy, i.e. inflation concurrent with stagnation in economic growth. For the first time in 10 years, there are indications of an increase in prices - inflation - accompanied by a lack of growth - stagnation.

The US is not alone. In the UK, inflation hit 3.3% - the highest rate in the 11 years since the Bank of England was granted its independence by the UK Labour Government.

The US Federal Reserve meets on Tuesday and Wednesday in this economic climate to decide whether to keep rates at 2% (they stood at 5.25% just two years ago next Sunday) or - otherwise - to outline interest rate decisions for the months ahead. The only other four scheduled meetings for the second half of this year are on August 5, September 16, October 29 and December 16.

Stagflation in the 1970s followed close on the heels of the end of the Vietnam War in April 1975. Is Iraq the Vietnam of the 1970s? The world's current oil crisis saw the price hit an all-time high of $140 last week.

Add to this the end of the easy credit regime, which has burst the property bubble around the world, caused a collapse in property prices, and led to a massive increase in repossessions. For good measure, add further the explosion in food prices, and US unemployment increasing an unhealthy 0.5% to hit 5.5% last month. All this creates a serious dampening effect on consumer spending.

So how does Uncle Ben (Bernanke) stave off the oncoming recession next Wednesday?

Back in the UK, the shares of HBOS (Halifax Bank of Scotland), the UK's largest mortgage lender, collapsed a near 80% to £2.49 earlier this month, after hitting a high of just under £12 in February of last year. Despite warning of a £1 billion write-down in its first half, its share price has picked up to £2.88 as we write.

So, for a change, I will spare you the 'déjà moo' feeling that you have heard from this bull before. Because if (or is it when?) this stagflation scenario stealthily creeps into Malta, today part of the globalised world, the knock on effect would be very difficult to avoid.

Even though HSBC Bank Malta plc's (HSB) low of €3.55 this week translated into a 49.2% drop from its all-time high in April 2006 - it is nowhere near HBOS's 80%. And even the MSE Index, which, for the first time after ten consecutive weeks, closed minimally up (0.14%), on Friday at 4,134.099, does not nothing to my usually bullish, "what an opportunity" outlook.

Bank of Valletta plc (BOV) continued to build on the previous week's advances rising 2.34% to €4.85 on Monday on moderate volume. It continued to push ahead on Wednesday climbing to €4.90 as volume increased to more robust levels with 35,387 shares traded for the day. It retained this price on Thursday, and advanced to a €4.91 close on Friday, for a gain of 3.61% for the week. Turnover totalled 69,413 shares for a value of €337,106, equivalent to 36% of the week's total equity turnover by value. At the end of the session, the best bid was for 400 shares at €4.91, while the best offer was for 96 shares at €4.915.

HSB started the week unchanged at €3.60 in thin trade but continued its relentless slide, down to €3.58 on Tuesday, and to €3.55 on Wednesday and Thursday, a new 2008-low. BoV must have had a ripple effect on HSB, as on Friday it opened at €3.55, then gained seven cents by the end of the session, closing at €3.62. HSB closed the week 0.56% up on a turnover of 54,010 shares for a value of €192,581. At the end of trading, bids for 320 shares started at €3.62, while offers for 3,400 shares were at €3.70.

Go plc (GO) first traded on Wednesday. The first trade was the only one struck one cent lower than the previous close. Go retained the €2.65 level till Friday's close to end the week unchanged. Total turnover for the week was 22,835 shares for a value of €60,505. At the end of Friday's session, best bids for 5,000 shares were at €2.604, while offers for 2,459 shares started at €2.65. On Monday, Go issued a statement, dated Friday 13, announcing that Forgendo Ltd, the joint venture between Go and Emirates International Telecommunications (Malta) Ltd, had acquired a further 353,958 shares in Forthnet S.A.'s issued share capital for a total consideration of €1,875,977.40.

International Hotels Investments plc dropped 1.4% to €1.045 on 1,500 share deal on Tuesday and continued lower, falling to €1.011 on Wednesday. It gained one cent during Thursday's session, closing on Friday €1.02 - earning the week's wooden spoon with a drop of 3.77%.

Malta International Airport plc started the week with a miniscule 300-share deal at the unchanged price of €3.12. Volume remained poor on Tuesday, but the price did not vary. It did not trade for the rest of the week. Turnover totalled a mere 800 shares for a value of €2,496. At the end of trading, a bid for 2,450 shares stood at €3.051 with offers for 600 shares at €3.15.

Fimbank plc was comparatively active with a total turnover of 180,516 shares for a value of €219,462. Friday's turnover alone saw 149,222 shares changing hands. The price stayed in a tight range between $1.879 and $1.89, closing on Friday 0.48% down at $1.88.

FIM announced on Monday that Menafactors Ltd, originally a joint venture between FIM and National Bank of Dubai, has become, with effect from May 29, a fully-owned subsidiary of FIMFactors B.V - a fully owned subsidiary of FIM. This transfer, albeit of a temporary nature, is the first step in a restructuring of the joint venture companies of the FIM Group. On Friday, the board announced that it is scheduled to meet on August 21 to consider and approve the half-yearly financial report for the six months ending June 30, and to consider the payment of an interim dividend.

Lombard Bank plc put in an appearance on Wednesday when 1,000 shares traded practically unchanged at €3.069. A solitary deal for 250 shares on Friday dragged the price down to €3, for LOM to close the week 2.28% down.

Maltapost plc gained 1.87% during the week. It was stable at €0.80 on low volume on Monday and Wednesday, however activity picked up in the last two trading days as a total of 23,533 shares were traded between €0.80 and €0.815, closing at the latter price.

Simonds Farsons Cisk did not move from its €2.71 price tag on Wednesday, and then gained one cent on Thursday. It retained the €2.72 on Friday for SFC to register a slight increase of 0.37% for the week as a total of 3,436 shares were traded.

Grand Harbour Marina plc GHM traded practically unchanged at the €2.05 level, closing at €2.049 with a turnover of 18,500 shares. On Monday GHM, in a statement dated June 13, announced that the AGM approved all ordinary resolutions including the payment of a final dividend of €0.20 per share to shareholders who were on the books on May 7. The AGM also approved the amendments to the Memorandum and Articles of Association in relation to the number of directors on the board, their nomination and election.

Medserv plc opened and closed its trading week on Monday, dropping 1.3% in a 2,000 share deal at €3.99 - a fresh 2008 low.

Crimsonwing plc was the week's top performer with a healthy 6% gain, on turnover of 34,500 shares. It started the week gaining 4% to €0.52 on Monday and a further 3.8% on Tuesday to €0.54. It traded slightly lower at the €0.53 level for the rest of the week.

In the Government Bond market, turnover by value amounted to €5.14 million with 51 deals struck. In the corporate bond market, there were 15 deals for a total turnover value of €102,033. Turnover value in the Treasury Bill market totalled €303,434.

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 2134 4243.