The New Year kicked off with oil breaching the $100 a barrel level on January 2. The price of gold followed suit - reaching an all-time high just below the $900 mark. Japan's Nikkei 225 Index added to the anything-but-bright scenario falling to last Friday's close of 14,110.78 - a near-26 month low, while in New York share prices continued to slide with the Dow firmly in correction territory, close to 12% below its all-time peak last October 9.
Add to this the naysayers ranting about the deepening of the slump in property prices worldwide. Then, as financial companies suffer larger-than-expected write-downs from credit market problems, factor in the fear of a US recession - with its concomitant ripple effect on the rest of global markets - what do you get? The very high risk of a vitriolic barrage of verbal abuse from the next person you wish a happy new year to.
We in Malta, could not have had it any better. The Financial Times of December 29-30 gave page three prominence to Malta's accession to the Eurozone. Even if it referred to us as Euro 'tiddlers', it was excellent exposure with a large three-column picture of euro-carpeted Republic Street. The first 2008 issue of The Economist, indirectly praised Malta's controlled inflation rate, stating "most east European countries that wish to follow suit will have to wait, because their inflation rates are too high".
But the really bright and uplifting news, as we head into what we believe to be an election year rally, was the Index closing above the 5,000 level on every single trading day of the first full week of the New Year. The last time that the Index closed above 5,000 was May 3, 2007.
The changeover to € trading was smooth and successful. Investors quickly cottoned on to the fact that, with equities, the price has been converted into € and the number of shares has remained the same; while with government and corporate bonds, a Lm100 price is now quoted at €100, and the value of the nominal holding has been converted into € e.g. Lm10,000 is now €23,294.
The first full week of trading, after the one-day trading week on January 4, saw fairly brisk trade for the first three days with volumes slowing on Thursday and Friday. This was probably due to the Government's disposal of its 40% holding of MaltaPost plc, details of which were announced last Tuesday.
Back to trading on the Exchange: HSBC Bank Malta plc (HSB) was the week's best performer, gaining 4.8%, and it is 7% up from its December 2007 close. Bank of Valletta plc (BoV) was ahead for most of the week but, understandably, traded lower as the effect of the bonus issue was absorbed. Crimsonwing plc (CW), 2008's first new listing, enjoyed a sparkling start but gave up some of its gains to end the week an attractive 10% up.
BoV opened on January 4 at €8.156, closing at €8.214. Last Monday it started practically unchanged and closed at €8.22, gaining ground in the run-up to Thursday - the last day when investors could buy shares and be entitled to the 1 for 4.92581 bonus shares. It hit a week's high of €8.268 (Lm3.549) on Thursday, and then, as expected BoV traded at a bonus-adjusted price on Friday, settling at €6.85. The final 300-share deal however, dragged the price down 14c to €6.71 - less than the 20% value of the bonus issue. BoV was by far the most active equity with 72,410 shares changing hands for a value of €587,521 - 47% of the week's total equity turnover. At the end of the session, best bids totaled 700 shares at €6.71 with offers for 396 shares at €6.849.
HSB's first deal for 2008 was struck at € 4.661, climbing up to a €4.76 close to end the day 2.2% up. It powered ahead last Monday closing at €4.85 hitting €4.90 by Tuesday. HSB's good run continued to Friday's close of €4.99 - 7.1% higher than its end 2007 level. Trading in HSB amounted to a total of 68,854 shares, worth €337,770. By Friday's close, there was outstanding demand for 4,000 shares at €4.95 with offers for 7,288 shares starting at €4.99.
GO plc first traded at €3.143, fell to €3, but recovered to €3.141 for the close of January 4. On Monday it closed at €3.121, but was down to €3.01 by Wednesday. It only recovered minimally on Friday, ending the day at €3.05, but was still 2.9% down on the week. The week's turnover amounted to 34,925 shares for a value of €106,445. At the end of the session, best bids totalled 2,000 shares at €3.02, with offers for 3,400 shares at €3.06.
Malta International Airport plc started 2008 at €3.261. It traded again the following Wednesday, a few cents lower at €3.215, ending the week at €3.22. The week's volume was low with just 4,257 shares changing hands for a value of €13,691. At the end of the session, best bids were for 1243 shares at €3.215 with offers for 6,280 shares at €3.22
Fimbank plc (FIM) closed its first trading session for 2008 at $1.77 on January 4. On Monday, it fell to $1.73 on a single deal but recovered to $1.769 on Tuesday. It was generally stable for the rest of the week, with the last trade effected at $1.768. On Wednesday, FIM announced that Raymond Busuttil resigned as executive vice-president with effect from next Wednesday.
Lombard Bank plc's first trade for the year last Wednesday saw the price sag 3.8% to €13.90 on a 660-share deal. It fell further on Friday, shedding a further 30c to €13.60 to end the week 5.9% down.
Simonds Farsons Cisk plc (SFC) had a comparatively busy week with 20,438 shares changing hands. However, the price was on a persistent downward trend, starting out on Monday 2.7% lower at €2.492. It settled at €2.40 and closed the week at this level, after hitting an intra-day low of €2.35. SFC lost a stiff 6.3% on the week.
Middlesea Insurance plc started out €3.889 closing almost unchanged at €3.85. It was stable on Tuesday and did not trade again, to close a miniscule 0.2% higher.
Plaza Centres plc was practically stable at €1.563, on a single trade for 1,200 shares, effected on Wednesday.
Medserv plc opened 2008 ahead, up 2.2% to €4.191. However it lost some ground falling to €4.15 on Wednesday, closing the week at this level, for a gain of 1.2%.
CW's maiden trading session got off to a roaring start on Tuesday, rising 20% to 60 cents on strong volume of 86,675 shares. It eased 2 cents on Wednesday and slipped another 3 cents on Friday to close at 55 cents, still a handsome 10% higher than its IPO price.
International Hotel Investments plc, GlobalCapital plc Grand Harbour Marina plc, 6PM plc, and Datatrak plc (DTK) have not yet traded this year.
On Monday, DTK announced that its subsidiary Datatrak Solutions Ltd has registered a company in Italy (Datatrak Italia srl) and concluded a joint venture agreement with Teleclient System Integrator spa (TSI). TSI acquired 45% of the share capital in Datatrak Italia srl.
In the Government Bond market, turnover by value reached €737,860 with 37 deals struck in 13 stocks. In the corporate bond market, there were 34 deals for a total turnover value of €265,442. Turnover value in the Treasury Bill market totalled €3.3 million.
This report was provided by 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.