The positive results that the Malta Stock Exchange (MSE) achieved last year are “a sure indication of the growing wealth in our country”, according to parliamentary secretary in the Finance Ministry Tonio Fenech.
Speaking during a press conference in which the MSE’s financial results for 2007 were announced, Mr Fenech said the MSE had registered a e1.3 million pre-tax profit over 2006, amounting to a 15 per cent increase over the previous financial year.
He said the results showed resurgence in listings in 2007, as well as the increased participation of active local investors.
MSE chairman Joseph Zammit Tabona, who gave a presentation of the results, said there were nine new bond issues, two new equity issues and 30 Government Stocks and Treasury Bill issues.
The total number of new primary listings raised e808 million in 2007 and this excluded Government Treasury Bills.
Interestingly, the new issues last year included the first ever foreign company equity issue in Malta – UK-owned Crimsonwing, while another foreign company has already been listed on the MSE this year.
Mr Fenech said: “We have always recognised the MSE as a strategic component of Malta’s financial services industry. It enables investors to capitalise companies for growth in various industries.
“In the first quarter of 2007 we changed our tax code in agreement with the European Commission, to make it (the tax code) attractive to both local and international businesses.”
Mr Fenech said Finance-Malta was then set up to promote the country’s financial services brand, both within, as well as outside, Malta’s shores.
It brings together and harnesses the resources of the industry and government, to ensure that Malta maintains a modern and effective legal, regulatory and fiscal framework in which the financial services sector can continue to grow and prosper.
Mr Fenech said the Financial Markets Act was also amended and this led to the creation of CSE (Malta) plc, a sister company to the MSE that will handle certificate depositary business.
The parliamentary secretary said euro adoption has reduced the foreign exchange risk to international investors wishing to invest in Malta, and vice-versa.
However, there is more significance to this change, said Mr Fenech; it has enabled the MSE to become a direct member of Target-2, the pan-European clearing and settlement system operated by the European Central Bank.
This has placed the country within the European and international payment systems infrastructure, making it more attractive as a destination to do business.
The MSE is also on the way to become a member of OTCQX, an international share trading platform operated online from the US.
The intention is to have MSE listed organisations participate on the international market, seeking international investors by means of this platform.
Mr Fenech went on to mention last week’s announcement that the double taxation agreement with the US was due to be signed. He said this agreement is critical to better business connections with the world’s largest market.
The parliamentary secretary said that although equity trading reduced last year, compared to the previous year, this was more than made up for in the newly listed Treasury Bills, Government Stocks and Corporate Bonds.
Total trading went up to e457 million, amounting in an increase of 22 per cent compared to 2006. Moreover, by the end of December last year, market capitalisation had reached e7.7 billion, up from e6.8 billion in 2006.
“These trading results show that local investors are becoming more sophisticated in their investment activity. This is a sure indication of the growing wealth in our country,” he said.
The MSE is also deepening its international presence and roots, he said, adding that it is currently working on memoranda with the Shanghai Stock Exchange in China and the Cypriot Stock Exchange, pending clearance from the Malta Financial Services Authority, to introduce shipping related investment products of interest to Malta.