During the HSBC annual general meeting held on 18 April, I put a question to the Board of Directors about the bank’s share prices.
I asked if anyone could explain to me why in Malta the share price of a beer producing company is worth more than those of an international bank as HSBC. I also made some hypothesis about this phenomenon.
First, it could be that it is in the bank’s interest that shares be kept low so that if it decides to close down all its branches in Malta it would be easy for HSBC to sell the bank at a cheap price with great profit and leave the island.
The second reason could be that what the Germans have speculated that the banks in Malta are in the same situation as those in Crete might be the truth. Finally, I asked, “Who is keeping the share prices so low?”
Mr Watkinson HSBC’s CEO answered my question. He said that the bank has no control on the market and it is the MSE that controls the market. He also suggested that if we want our share prices to rise in value we must start selling our shares.
His answer shows clearly that the bank has no intention to see the share prices getting higher. One has to keep in mind that the bank is the major shareholder with over 70 per cent of the shares. The bank can afford to sell at a profit as he bought his shares at a ridiculous price. But if we sell our shares, we will be losing about 30 per cent or even more of our shares.
Another observation I made is that companies all over the world whose shares remain considerably low for a long period of time, say four years and over, in the end declare bankruptcy.
We, shareholders, believe that the Ministry of Finance should take this matter in hand, a matter that is affecting thousands of small shareholders. And investigate what is happening at the Malta Stock Exchange, what is keeping the share prices from reaching a reasonable price that reflects the greatness of our banks so that we can recover the money we have invested in them and once again instil trust in our banks and companies.
Frans Buhagiar
SAFI