FTSE promotes Malta to 'Frontier' status

The FTSE Group, a British provider of stock market indices, has announced that Malta will be promoted to a "Frontier" classification in its Global Equity Index Series as from September next year.

FTSE classifies its equity markets as "Developed", "Advanced Emerging", "Secondary Emerging" or "Frontier".

Stockbroker Joe Bonello, a founding member of the Malta Stock Exchange, said this reclassification showed the "coming of age" of Malta's exchange. He said this would increase Malta's exposure considerably and hopefully create a wider interest in shares and bonds listed in Malta.

"This augurs well for the Malta Stock Exchange," he said.

Global equity market structures evolve on an ongoing basis, and to keep pace, FTSE works closely with stock exchanges and regulators throughout the year to ensure its benchmarks remain an up-to-date and accurate reflection of the investment opportunity in global markets.

Besides reviewing Malta's status, the FTSE Group also reviewed the status of the United Arab Emirates and announced that the Gulf state will be classified as "Secondary Emerging" in September next year.

Two countries were demoted in FTSE's country classification index: Iceland is to be removed from the FTSE Global Equity Index series and Argentina will be reclassified from "Secondary Emerging" to "Frontier" status.

The FTSE Group had, last year, placed the Maltese equity market on its "Watch List" in its country classification and Malta's soon-to-be inclusion in the "Frontier" list means it has met the necessary criteria required for membership of this group.

The specific five criteria are: The stock market regulatory authorities actively monitor the market; there are no objections or significant restrictions or penalties applied on the repatriation of capital; a rare incidence of failed trades in settlement; a T + 7 or shorter settlement system and that it is a transparent market with market depth information, visibility and a timely trade reporting process.

The change in classification for Malta from a non-entity to "Frontier" status could further enhance Malta's potential as a financial services centre.

Other countries included in the "Frontier" group include Croatia, Cyprus, Estonia, Jordan, Bulgaria, Lithuania, Macedonia, Mauritius, Romania, Slovakia, Slovenia and Tunisia.