The Malta Stock Exchange (MSE) is this year celebrating its 25th anniversary. The MSE has come a long way since Bank of Valletta first listed it back in 1992 and today has over 40 companies listing both bonds and equities. This number is poised to grow further, particularly since Prospects, a market fully owned by the MSE that caters to the financing needs of small- and medium-sized companies (SMEs), is now available.
However, although Malta’s fastpaced economic growth has become the envy of Europe, the reality is that Malta’s economy is still Europe’s smallest, which suggests the Exchange’s prospects for growth domestically are limited. Although the MSE is committed to servicing the local economy and to increasing listings locally, for the Exchange to grow and prosper we must look beyond our shores.
Two other relatively small economies have Exchanges which have gone international and have done it with major success. Both Luxembourg and Ireland have Stock Exchanges which have become international powerhouses having 40,000 and 32,000 listings respectively, almost all of which are international listings. This has helped propel both countries into major financial centres, spawning ancillary financial sectors such as funds, insurance, legal, accounting and other back office industries, creating thousands of well-paying jobs in the process.
Although Malta’s fast-paced economic growth has become the envy of Europe, the reality is that Malta’s economy is still Europe’s smallest, which suggests the Exchange’s prospects for growth domestically are limited
For the first time in our 25-year history, the Exchange will be embarking on a sustained strategy to market and promote its listing and Central Securities Depository (CSD) services outside Malta. We offer excellent cost-effective services such as a fully-functional CSD, and utilise the Deutsche Boerse Xetra platform, a state-of-the-art trading system.
We have identified key markets such as Italy, Spain, Turkey, Portugal, North Africa, the Middle East and China as areas which may offer us a competitive advantage such as cost competiveness or the ability to passport into the EU cheaply.
Exchange trading volumes and liquidity can be significantly enhanced by showcasing some of our larger listed companies to global institutional fund managers. Medserv, one of the MSE’s best performers, has commissioned Edison, a London-based research firm (see story on pages 10 and 11) to conduct an independent investment research study on the company’s prospects. Few institutional managers would show any initial investing interest without at least reading such a research report.
There are already a number of other Maltese companies which have discussed engaging Edison to write similar research reports. Furthermore, the MSE and Edison have agreed to explore avenues for promoting Maltese-listed companies to institutional investors both in Europe and the US. There is the potential for roadshows and institutional investor conferences showcasing some of Malta’s finest listed companies.
We are also formulating a strategy to attract foreign brokers to become members of the MSE. Of the 13 member firms authorised to broker trades on the Exchange, only one is foreign. There are a number of very large international trading platforms offering access to millions of account holders we would be very interested in attracting. Imagine an investor based in New York, or New Delhi, just a few key strokes away from buying 5,000 shares of Bank of Valletta or GO shares.
The MSE has indeed come a long way over its 25-year existence. There are many past and present clerks, supervisors, managers, GMs, CEOs, directors and chairmen who deserve recognition and praise for having taken our national exchange a very long way. However, today we believe serious growth potential over the next quarter century will come from the many significant and exciting opportunities overseas. This is a journey our country and the Malta Stock Exchange are well suited to take.
Joseph Portelli is the chairman of the Malta Stock Exchange.