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9 EDITORIAL BusinessToday is published every Thursday. The newspaper is a MediaToday publication and is distributed to all leading stationers, business and financial institutions and banks. MANAGING EDITOR: SAVIOUR BALZAN EDITOR: PAUL COCKS BusinessToday, MediaToday, Vjal ir-Rihan, San Gwann SGN9016, Malta Newsroom email: bt@mediatoday.com.mt Advertising: afarrugia@mediatoday.com.mt Telephone: 00356 21 382741 W ith just 25 listed companies, the Malta Stock Exchange is not an attractive option for investors seeking a shareholding in Maltese companies. e problem is exacerbated by the lack of diversi- ty in the offerings. Nine companies are involved in real estate development and retail malls, four are banks, two are insurance firms, three are software and technology companies and the rest are singular companies in different fields, including telecommu- nications, a postal service, a hotel, an airport and a brewer. e lack of diversity in the sectors available for share investment and the dearth of alternatives with- in the same sectors, contribute to a general lack of trading. is state of affairs has prompted David Curmi, CEO MSV, a listed company, to voice his concern over the MSE's performance. He has rightly pointed out that contrary to what has happened in foreign stock exchanges, which experi- enced drops at the start of the COVID-19 pandemic only to pick up in subsequent months, the MSE has remained in the doldrums. is can easily be explained by the lack of diversity, which does not allow investors to spread their money across different sectors, or even different firms with- in the same sectors, according to company perfor- mance and expected returns. It is quixotic how the MSE only has three technol- ogy companies listed when abroad such companies are often floated to raise the necessary capital to in- vest in research and development. Something, somewhere is not functioning well. No- body can expect the MSE to be at par with stock ex- changes in more prominent jurisdictions but in order for Malta to up its game there needs to be a concerted effort to encourage companies to float their shares. e genetic make-up of Malta's business sector with largely family-owned companies is not conducive to stock market flotation. In fact, most of the larger companies opt for the relatively safer bond options as an alternative to raising capital through banks. ere is also the issue of cost. Floating on the stock exchange comes with onerous obligations towards shareholders, requiring a company structure that provides for full transparency and resources that come at a cost. Not many companies are willing to go through such an overhaul that may disrupt traditional business models and structures, while opening up the firm to increased scrutiny. Nonetheless, the benefits of stock market flotation cannot be understated in a dynamic market. Banks are flush with liquidity. Deposits shot up during the pandemic despite the unattractiveness of bank deposit interest rates. is may be the right time for companies, especial- ly the larger ones that have a partial experience with the flotation of bonds, to consider opening up to a diversified shareholding base. ese companies may already have the necessary reporting structures in place. Within this context, the MSE must adopt a pro-ac- tive approach to engage with potential aspirants for listing and understand their hesitation or resistance. At the same time, Malta requires more investor ed- ucation to ensure that people with extra liquidity can invest judiciously on the MSE. ere are too many people who just park their money with one company without diversifying their portfolio whatever happens. Some do not even rely on expert advice, which makes for the MSE's drab performance. But the underlying issue remains the poor offering, which can only change if Maltese companies become bolder and up their game. In a post-COVID recovery, this may be an option companies should consider. A glimmer of hope in Libya 05.11.2020

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