There is a lot of investment money sloshing around and it all came because interest rates around the world are being kept low. This encourages lenders and borrowers to create credit and therefore pump money.

Investment today seems to be mainly concerned with anticipating the next bubble and jumping thereon before the others do.

As I write, I watch this position in gold, which seems to be the next thing to inflate. Gold is tied to the resources story, how resources are getting scarcer as China and India develop.

Interest rates are supposed to fluctuate so that they adjust and pay people with money in monetary assets, such as bank accounts and bonds, the appropriate interest rate, to cover inflation and keep up with real assets, such as land and buildings. Otherwise, savers will go for real assets and shirk monetary ones, creating bubbles and other popular delusions. Yet housing, resources, and many equities are going through the roof and whoever kept too much in the bank, believing in interest rates, has done rather miserably.

There is, therefore, this search for performance. If property has risen too far, too fast, we see a shift to commodities. In turn, commodities go through the roof and investors liquidate and go for shares, and so it goes on, as it has always done, but maybe faster.

Like always, there are breathers and days or weeks of uncertainty (terror attacks, oil shocks, etc). Fear makes investors temporarily rush into bonds, across the spectrum and across maturities, and the market gets another word to play with: "conundrum". The conundrum of how short-term yields are being pushed up but bonds' long-term yields are failing to follow suit!

In shares, one tries to find good, stable earnings and dividend yield and preferably also some solid probability of growth. That is why "hi-tech" is again back in fashion. We have also seen this in Malta, where dividend yield has perhaps been elevated from prince to king, with the main shares increasing rather rapidly in value, having failed to start increasing in mid-2003, like in the other markets, and therefore having a lot of catching up to do. One now looks for reasonable valuations.

Maltacom

Last week, Maltacom held a presentation for stockbrokers on its interim financial statements for the first six months this year. The presentation was very professional and informative with eye-catching documentation prepared, I was told, by their PR consultants, MPS. Good presentations carry a company's performance across much better and investor relations should be part and parcel of a Group's marketing efforts.

The shares last year paid a good dividend and the gross yield now is 4.3 per cent, which should provide good support. On the upside, there seems to be interesting foreign interest for the tranche the government decides to sell. We do not know much, though, and what we saw in the papers came from second sources.

The technology surrounding Maltacom is changing in such a way that it is not only affecting its supply processes but also impacting its customers. This is the most challenging type of technological change because it not only forces the company to grapple with changes in its operations but also poses marketing challenges because the company has to persuade consumers to change their behaviour.

I think that Maltacom is coping with this very well. Turnover was maintained partly, it seems, because the company was very aggressive in pushing in new products and go for volume even while facing falling revenue per unit sold.

Sonny Portelli, group chairman, during a recent meeting with stockbrokers, said that the main areas of growth are likely to come from broadband, mobile and digital TV.

According to Joseph Azzopardi, group chief operations officer, Maltacom is seeking to consolidate on core business revenues and get further tariff repositioning, continue rationalisation on costs and debtor chasing, enhance further value added services and pursue new business opportunities, track for restructuring opportunities in line with strategic plans and benefit from the developments associated with the planned privatisation.

For the six months under consideration, the group managed to cut cost of sales by Lm2 million - albeit "other operating expenses" increased by nearly Lm1 million - and this pushed up gross profit from Lm11.9 million in the equivalent period to Lm13.7 million. The net Lm1 million cost-saving showed up in operating profit which increased from Lm6.5 million to Lm7.5 million. Earnings per share increased by 25 per cent, from four cents to five cents.

The interims, therefore, were strong, probably better than expected, and the profit lends support to the dividend. Furthermore, the company considerably reduced financial risk by collecting some Lm15 million from debtors since July 2004 and reducing bank borrowings by Lm16 million, again over one year. I think that is some good management.

Lombard Bank

Again, excellent interims were reported by Lombard Bank for the first six months this year.

Net interest income increased by 27 per cent, from Lm1.6 million in the equivalent period in 2004 to Lm2.1 million. Since there were no major changes in the other items, the bank managed to keep most of the net income generated down to the bottom line with profit after tax increasing 42 per cent over the equivalent period to reach Lm1 million.

Loans to customers were up eight per cent since the end of 2004 but deposits fell slightly.

The share price has recently gone up but this fastest growing bank has the lowest price to earnings ratio, perhaps because dividends are kept on a tight rein.

Paul V. Azzopardi is managing director of Azzopardi Investment Management Limited (www.azzopardi.com) which is licensed by the MFSA to provide investment services, including stockbroking. Mr Azzopardi or related parties, including the company, and their clients, have an interest in securities mentioned.

This article is only meant to provide information, which the writer believes to be accurate at the time of writing, and is not intended to give investment advice and its contents should not be construed as such.

The value of securities, and the currencies in which they are denominated, may go down as well as up. Readers are requested to seek professional financial advice tailored to their own personal circumstances.