The Malta Stock Exchange has embarked into a number of new initiatives with the aim of creating activity on an exchange that has over the years resulted to be relatively dormant. Over the years there were a number of initiatives aimed at stimulating the activity on this relatively young and small exchange.
One of these projects was called Borzamed which under the chairmanship of Mr Alfred Mallia aimed at bringing together various stock exchanged in the Mediterranean. The BorzaMed Project’s principal objectives were to consider the feasibility of developing an efficient regulatory framework for cross-border trading of securities in the Mediterranean and to provide a forum for the study and furtherance of cross-border trading of securities in the Mediterranean.The project seeked to foster a continuing relationship between the parties and to provide a forum and mechanism for co-operation for their respective benefit and to enhance the development of their markets as well as other securities markets in the Mediterranean region. Regrettably the parties did not go ahead with the project which could have given Malta a different dimension.
Under the Chairmanship of Mr. Joseph Portelli, the stock exchange recently launched two new projects. One of the projects was the Launch of a Shariah Index and the second one was a new listing of SMEs. The Shariah index was a first initiative in the Islamic Finance sector. Malta has been exploring the possibility of Islamic Finance opportunities for a number of years now. At a certain point in the budget the Minister for Finance gave indication that Malta may consider the issuance of a Sovereign Sukuk (Islamic Bond) and/or Islamic Banking. A few years ago the Malta Financial Services Authority had issued a Guidance Note regarding Islamic Funds. It had also issued a consultation paper with the indication of more papers to come. However, it seems that the MFSA left this project in spite of the positive feedback it received. In this context, Malta has over the years given a confused message to the Islamic Finance world. The Malta Stock Exchange move is the first concrete move in the Islamic Finance sector. However, it does not seem to complement such initiative with the appropriate marketing in order to attract the necessary listing. Possibly, this has been one of the constant weaknesses of this exchange. It needs to be considered as a business and like any other business there needs to be an investment in marketing initiatives. If exchanges, like the London Stock Exchange does take such initiatives how come the Malta Stock Exchange has been dormant over the years? It seems that under this board of governors things are changing and hopefully they will come up with a strong marketing plan that complements this new initiative which may also build on the idea of Borzamed.
With respects to the SME listing which was branded Prospects , the Malta Stock Exchange seems to have recognised a niche. The constant call by SMEs for access to capital has been endorsed by this initiative. However, this initiative does come with its challenges particularly in view of the mentality and culture in family businesses in Malta. Whether they will be open to this initiative one has yet to see. When it came to initiatives related to venture capital and Business Angels the Maltese businesses have been relatively closed. We hope that the consultants on the island do recognise the opportunity that this created for SMEs and manage to create structures that match the opportunity with the SME culture in Malta. This initiative may be too young to attract the interest of foreign entities. However, with the appropriate marketing campaign even in this case the MSE may position itself as the Exchange of the Mediterranean.