The MSE’s development over the last 25 years
The Malta Stock Exchange’s development over the last 25 years
The Malta Stock Exchange became a reality upon enactment of the Malta Stock Exchange Act in 1990, and commenced its trading operations on 8 January 1992. Today it is a fully-fledged regulated market which successfully fulfils its role as an effective venue to raise capital finance with 25 years’ experience and active involvement in the development of the Maltese Capital Market.
The Exchange provides a structure for admission of financial instruments to its recognised lists which may then be traded on the regulated, transparent and orderly secondary market place. The main participants in the market are issuers, Stock Exchange Members, and the investors in general. Apart from admission and trading, the Exchange also offers a comprehensive range of back–office services including maintenance of share and bond registers, clearing and settlement and custody services through its in-house Central Securities Depository (CSD). It also has a link with Clearstream Banking in Frankfurt, Germany and in Luxembourg facilitating international access to the Depository.
The actual operations commenced on 8 January 1992 with trading taking place on a manual, once-weekly basis. There were 32 Government Stocks admitted to listing, with a nominal value of €290.24 million, and turnover during the first year of operations of the Exchange reached €27.25 million. The number of investors registered back then was just 8,313. Compare that to the end of December 2015 – Trading last year was just below the €1 billion mark, the market capitalisation value was €11.6 billion, and the number of investors increased significantly to over 74,0000. These figures clearly show that the Exchange has transformed and developed significantly over the last 25 years.
In fact, the last 25 years have seen a very successful growth phase that has seen the listing of over 40 companies, and the issuance of over €15 billion in equity, corporate and government bonds and treasury bills. This certificate of success must be equated to the fact that this activity took place on a developing island economy with a GDP of €6.8 billion and a population of just over 400,000, the source of much of the investment. There is a clear appetite for new opportunities for investment amongst a very ‘retail’ investor base ensuring that subsequent issues are likely to be consistently successful. This level of confidence in the market by investors combined with the increasingly entrepreneurial private sector has created an environment that allows the capital market to co-exist with the traditional banking sector. This ensures a supply of new listings and related investment opportunities coming to market under the Main Listing structure regulated by the MFSA, or Prospects, a new product for SMEs looking for access to the capital market for financing or succession planning requirements.
The performance of the MSE has been very positive. The Malta Stock Exchange Index closed 2015 at 33% over the previous year, one of the world’s best performing indices. The MSE’s index performance is a testimony to the Maltese economy being one of Europe’s best performers, Consumer confidence is also quite strong, which along with other positive economic fundamentals should augur well for the Maltese Equity Market.
During 2016, and beyond, the Exchange will continue to focus on the domestic market, but will also seek to attract international business from China, Turkey, Italy, Spain, Eastern Europe and the Middle East to take advantage of Malta’s cost effective listing solutions. The newly launched Prospects, focusing on SME needs, is also generating a lot of interest from the business community in Malta and overseas. Another strategic move by the Exchange was the introduction of the MSE Sharia Compliant Index, which helps to place the Exchange in a position to explore opportunities within Islamic Finance.
It’s been an active and successful 25 years. The Exchange looks forward to the next 25 years with confidence, energy, and strategies that will ensure continued growth, confidence, and stability in an environment where the capital market will play an ever increasing and critical role in ensuring economic growth.
Product and Business Development Manager
Malta Stock Exchange
The Malta Stock Exchange’s 25th Anniversary events are being supported by BOV, Rizzo Farrugia, Curmi and Partners, Calamatta Cuschieri, FinanceMalta, Farsons, Mapfre and Izola Bank