There are good reasons why there can be a sizable number of Maltese investors able to master the fluctuations of the Nokia share price, firstly to their ultimate profit and secondly to that of their country. Malta's economic destiny has come to be closely tied to that of the giant Finnish mobile phone company.

It is no exaggeration to say that if there had been no Nokia there would have been no ST Microelectronics as this company, which commands 55 per cent of Malta's exports, supplies the semiconductors which are helping the Finnish giant keep up its 33 per cent share of the world mobile phone market.

So when we drive in the south of Malta, and see the booming condition of a town like Zurrieq, resplendent with elegant housing, and car-owning working class families, let us think about the wonderful progress the era of new technology has brought us.

It has done nothing less than abolish poverty and set before the people new economic heights to conquer. Gone are the days when our young men could only dream of a government job, a dockyard job or emigration.

Science-based industry has come to stay in this island, and the next step for its people is to learn through appropriate research how to invest its hard-earned money.

This will not only teach them how to make money out of money, but it will also enable them to influence their political leaders to make the right decisions on the country's industrial strategy.

If a Maltese investor masters the movements of the Nokia share price, he will have the knowledge to make money out of a share which, during these past seven weeks, has obtained the highest appellations among Europe's top one hundred companies, according to Italy's financial newspaper 24 Ore, and what is more important its share price has been described as "appealing" in the prestigious Lex column of the Financial Times.

It has outdone ST Microelectronics, which for a couple of weeks did not appear among that august assembly of companies, and this despite the fact that recently the share price of STM has gone up by over 40 per cent.

Nokia is definitely Europe's hottest share tip, and what makes it so attractive is not only the likely advance in its price, but also such statistics as its return or equity, which is an astonishing 22.5, while STM's is only 6.3 per cent. It must be stressed however, that what is more important than anything else is its ability to increase its market share of the mobile market.

Market share

This is not an invitation for the reader of this newspaper to buy Nokia shares. Its first purpose, as already hinted in the opening sentences, is to help the ordinary, intelligent reader master the mechanics of the Nokia money multiplication machine, so that he would be better able to take those decisions necessary for the fruitful exploitation of any share price opportunity that may present itself.

What has appeared in Europe's financial press during these last six months concerning Nokia presents a unique educational opportunity for a people, like that of Malta, that in the not so distant past unloaded about Lm160 million into the voracious maw of the Argentinean monster.

The background of financial opportunities requires time and labour for its elucidation. These are matters that cost money. The Nokia puzzle is quickly explained by stating that scientific fundamentals on the growing power of mobile phones point to an irresistible rise of the Nokia share price, but that the oligopolistic power of the investment banks is going to ensure that there will be violent oscillations as regards the upward movement of that share.

Investment banks will be selling Nokia shares at the top of a rally and buying them again at the start of another rally. That is, their actions are bound to exaggerate upward and downward movements.

The ordinary investor, if he is not careful, will most probably end up buying at the highest point of the cycle and selling at the lowest. A share cycle like that of Nokia or STM has nothing much to do with the trade cycle, as described in economics textbooks.

An academic knowledge of economics is indispensable to understanding Nokia, but so is a knowledge of psychology, which can throw light at the 'oligopolistic collusion' behind all share price movements. The wonderful thing is that these days we have financial newspapers like the Financial Times and 24 Ore, which enjoy revealing the degree of oligopolistic collusion behind the engineering of any share price.

Prices do not move up and down on the Bloomberg and CNBC screen because of perfect competition, but because of its very negation, which is 'oligopolistic collusion' producing a kinked demand curve.

Adam Smith had not failed to describe 'conspiracy' price fixing on the part of capitalists. Perfect competition demands perfect knowledge of the market, and such knowledge is only available to a few members of the banking community who prefer to play an oligopolistic game which has ended in the past and present in the US with one per cent of the people ending by owing 30 per cent of the wealth of the nation.

During the past six months the Nokia share price advanced 30 per cent. Last April it lost momentum, then it continued its remorseless rally till last Thursday week when it suddenly lost 10 per cent on the publication of a set of excellent results. These were not completely up to analysts' expectations.

This stock market overreaction, or what may be called energetic profit taking by powerful financial organisations, was the butt of humour the very next day in both the Financial Times and 24 Ore.

The conclusion of the FT was that "Nokia is starting to look appealing". This was a 'buy' recommendation scarcely covered by a fig leaf, while 24 Ore called the results "mica male" a euphemism for "excellent" and last Monday published an unambiguous 'buy' recommendation in its review of Europe's top one hundred companies. Nokia was easily the top share in that list, and has been so far the past two months.

Financial information

This demonstrates that the small investor who is literate enough to read a quality newspaper can profit from the stock exchange. He might not be able to buy and sell as the big banks do, for broker commissions are prohibitive for unorganised investors, but he will not be bluffed into a panic situation by seeing the Nokia share price fall 10 per cent in one day. This looks certainly like a buying opportunity. Billions, not millions, have been made out of Nokia shares, but not by people who look on the stock exchange as if it were a casino. Nokia share mastery is headier excitement than any casino jumping dice with a far greater success probability for those who work hard on its fundamental characterises.

Mr Azzopardi Vella has advised S&P and been a promoter of the Malta Development Fund. At present he is the executive manager with DBR Investments Ltd. E-mail: johnazzopardivella@hotmail.com