The Economic Update August 2013 by Adrian Friggieri

THE

NEWSPAPER POST | AUGUST 2013

ECONOMICUPDATE

Outstanding Agents Outstanding Letting COVER story

Special feature

Talking Point

Interview of The Month

Dynamics in the Letting Industry

Portomaso Business Towers & Beyond

How Europe can unlock ASEAN potential

Thought Leadership

Meet the longest serving employee of RE/MAX Malta, Edward Agius p.4

An exceptional 20-page pull-out supplement featuring for the first time in Malta Portomaso Business Towers p.21

EU/ASIA relations by Noel Quinn is Group General Manager Regional Head of Commercial Banking Asia Pacific for the HSBC Group p.18

We interview Ms Maria Mallia, who made history in July 2013 becoming the first woman to head the Malta Institute of Accounts p.24

ECONOMIC UPDATE THE

NEWSPAPER POST | AUGUST 2013

CONTENTS FEATURE STORIES

OUTSTANDING AGENTS OUTSTANDING LETTING COVER STORY

SPECIAL FEATURE

TALKING POINT

INTERVIEW OF THE MONTH

Dynamics in the Letting Industry Meet the longest serving employee of RE/MAX Malta, Edward Agius p.6

Portomaso Business Towers & Beyond An exceptional 20-page pull-out supplement featuring for the first time in Malta Portomaso Business Towers p.25

How Europe can unlock ASEAN potential EU/ASIA relations by Noel Quinn is Group General Manager Regional Head of Commercial Banking Asia Pacific for the HSBC Group p.22

Thought Leadership We interview Ms Maria Mallia, who made history in July 2013 becoming the first woman to head the Malta Institute of Accounts p.46

Publisher John Formosa

04 Cover Story: Dynamics in the Letting Industry

Meet the longest serving employee of RE/MAX Malta, Edward Agius in an intriguing interview. 08 Focus on Political Leaders: Rebuilding the Future

Editor Martin Vella

We resume our Part 2 of an extensive interview with PN Leader Dr Simon Busuttil.

Journalist Martina Urso

16 Value Proposition

Sales & Publication Manager Margaret Brincat

An exclusive and in-depth interview with Kenneth Farrugia, Chief Officer - Fund Services at Bank of Valletta plc.

Graphic Designer Berthrand Pisani

18 How Europe can unlock ASEAN potential

Cover photography Network Studios Printing PRINTIT Ben’s Good Cents:

We cover EU/ASIA relations with an exceptional contribution by Noel Quinn is Group General Manager Regional Head of Commercial Banking Asia Pacific for the HSBC Group.

Portomaso Business Towers & Beyond

ECONOMIC UPDATE THE

Special Feature: AUGUST 2013

“There are no secrets to success. It is the result of preparation, hard work, and learning from failure.” For magazine and website advertising enquiries please contact: margaret@networkpublications.com.mt or call on (+356) 9940 6743

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The Economic Update is published by: Network Publications Ltd., Angelica Court, Giuseppi Cali Str., Ta’ Xbiex, XBX1425, Malta Tel: +356 2131 6326/7/8 Fax: +356 2132 3432

Contributors: Margaret Brincat; Josef Busuttil; George Carol; Ed Cussay; Swetart Farrbairn; Noel Farrugia; George Fenech; Antio Ghio; Stefan Grima; Nigel Leyson; Noel Quinn; Giles Schembri; Mark Vassallo; Charles Xuereb. Special Thanks: BOV; BPC; Exor Group; MPS; JP Advertising Ltd; KPMG; Remax Malta; Tumas Group; Ogilvy PR; Zampa Jewllers. Please feel free to email us with your viewpoint, whether you agree or disagree with the standpoint of the personalities we interview or the topics we focus on. Your opinion, contribution, concern and feedback on our articles and interviews are welcome. Please include full name, contact details

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Special Pullout-and-Keep Supplement: Portomaso Business Towers & Beyond

An extraordinary 20-page pull-out supplement featuring for the first time in Malta Portomaso Business Towers, including a Foreword by Tumas Group Chairman Mr. George Fenech. Participants include (in sequence) Zampa Jewllers, Hilton International, DeForte, Mdina Glass, Valletta Fund Management, Level 22, Zeri’s Restaurant, D, Portomaso Car Park, Boatcare Ltd, FXDD, and Sparkasse Bank. 24 Thought Leadership We interview Ms Maria Mallia, who made history in July 2013 becoming the first woman to head the Malta Institute of Accounts

www.maltaeconomicupdate.com All rights reserved. Reproduction in whole or in part is strictly prohibited without written permission. Opinions expressed in The Economic Update are not necessarily those of the editor or publishers. All reasonable care is taken to ensure truth and accuracy, but the editor and publishers cannot be held responsible for errors or omissions in articles, advertising, photographs or illustrations. The Economic Update is printed by PRINTIT and distributed free with The Business Weekly.

Editor’s Note When Alexander the Great died in 323 B.C., his empire was divided into four kingdoms, one of which was ruled by Ptolemy I, one of Alexander’s generals. Ptolemy’s kingdom was located in what’s now northern Egypt, and like some earlier kingdoms in India, Ptolemy used elephants in battle, to great success. Ptolemy II, seeing elephants were so effective, decided he needed far more elephants to secure and expand his empire. The problem for Ptolemy II, though, was that elephants were only obtained from Asia–through a rival kingdom, meaning that his source of elephants was essentially cut off. Through trade with people who lived south of his kingdom, Ptolemy II learned that elephants also lived further south in Africa–not just Asia. Ptolemy II also had an interest in other exotic animals, not just elephants, and displayed them as a symbol of his power and wealth. OK, so we don’t live in the 4th century B.C. But trying to build business centre and get clients in the 21st century A.D. one must have a variety of experience, knowledge, and expertise. And as the saying goes: if you do what you have always done, you will get what you always acquired. If you want something different, you need to do something different. And the remarkable Tumas Fenech always wanted to do something different. The point made is that it requires a mindset shift that moves you away from deliverables and trivia, and where you instead focus on higher-order outcomes and objectives. Tumas Fenech’s legacy lives in with the Portomaso Business Tower – an example of high value deliverable. Tumas is a great example of a person who identified his niche and understood his objective. Tumas Fenech is a Maltese icon. And Portomaso Business Tower is also a Maltese iconic landmark.

Like Tumas, we at The Economic Update identified our niche and understand that we have a business centre which makes things happen and changes lives. Our team has worked hard to bring you this month’s exclusive feature about Portomaso Business Tower, a business and iGaming centre with high-value corporate organisations focusing on high value outcomes. We are proud to present our readers with a unique 20 page pull-out-and-keep supplement featuring the 98 metres tall Portomaso Business Tower, together with its top-quality businesses and surrounding restaurant and brand outlets. We wish to thank all those who have collaborated with us, including Portomaso businesses and all advertisers. Special thanks to George Fenech and Tumas Group.

Martin Vella

28 Sustaining Market Share Through Granting Credit

30 34

Another first: Josef Busuttil, Director General Malta Association of Credit Management on good management credit practices

30 We Serve You Better Mark Vassallo MD at Servgroup Ltd, states his reasons why Aluserv work assiduously towards being the pioneers in offering new and better aperture systems

32 Online Presence – Beyond Social Media Secialising in information security and IT assurance by Robert Farrugia, Manager within KPMG’s IT advisory team

34 Realising Competitive ICT Advantage Through Proactive Legislation A brilliant piece on the Digital Economy by Dr. Ghio, partner at Fenech & Fenech Advocates specialising in ICT

36 Hydrogen Fuel Cells and Ethanol An alternative energy essay by special correspondent courtesy of EIA

38 Shaping the Future of Financial Services in Malta: Delivering in 2020 High quality content on the financial services sector by Giles Schembri, Partner at KPMG

COVER STORY

Edward Aguis with RE/MAX CEO & Founder, Kevin Buttigieg 04|

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IT Education COVER STORY

DYNAMICS IN THE Letting Industry

By Martin Vella

The Economic Update meets up with Edward Agius, the longest serving employee of the company who now mentors twenty three letting associates as the manager of the company’s RE/MAX Lettings franchise. We discuss with him the dynamics of the Industry and just how important the business of letting is to RE/MAX Malta, the industry in general and what lies in the future for the industry BACKGROUND Kevin and Jeffrey Buttigieg, the founders of RE/MAX Malta, were the pioneers of the letting Industry when they started out the first fully specialised letting company in 1999, JK Properties Ltd. From a humble four man office located on the first floor at Regent House in Sliema, the company purchased the rights to the International franchise and exponentially grew year after year, becoming the largest real estate firm on the Maltese Islands. TEU: When did you join the company and how did you get to where you are today, Manager of the letting franchise, RE/ MAX Lettings? EA: At the tender age of 20 I was working for another reputable real estate company when a colleague of mine informed me that Kevin Buttigieg wanted to meet with me to discuss the possibility of working in lettings. Kevin immediately convinced me that renting property was straight up my street and so I started my RE/MAX journey. With the

continuous support and mentorship of Kevin, I excelled in the field of letting as a top performer. As the company started to grow and there was discussion of the International brand, I was asked to hold the mantle of the letting team, since Kevin and Jeffrey took on different roles within the company. Being what the letting business was and still is today, treated as the company’s baby, there is a lot of pressure to perform. However, knowing that the company directors always believed in me, I have managed to develop and increase the letting team from six associates up to twenty-three, and we have plans to grow this even to thirty associates. TEU: Malta has turned itself in to a hub for businesses around the world and over the past six to seven years there has been a great influx of companies setting up in Malta from the iGaming, Finance, IT and other Industries. Why would a company choose RE/MAX Lettings to take care of their corporate needs? EA: At RE/MAX, we have built our letting business on professionalism, a strong work ethic

and creating lasting relations and friendships with clients. This has come by being proactive in our approach, having the strongest database of properties in the market and trained professionals providing a superior service. Over the years and to-date, we continue to be selected as the preferred real estate company to successfully manage the long and short term accommodation of large scale projects, igaming companies, finance companies, tech companies and everything in between. “we have built our letting business on professionalism, a strong work ethic and creating lasting relations and friendships with clients”

My team is made up of a group of specialised associates that work in different market niches and thus we are in a position to provide a comprehensive service to any company executive or individual looking to rent a commercial office or residential home. Moreover, we also provide ancillary services during and after the relocation. These services August 2013 | THE ECONOMIC UPDATE

| 05

COVER STORY

EA: In terms of the future of the letting industry, we are certain that the industry will continue to grow. Malta being a jurisdiction of excellence, it is attracting companies to our shores consistently whereas established companies are expanding. We are hearing that conditions in other jurisdictions are becoming weary thus Malta is a more stable choice and we foresee some large scale companies setting up in Malta soon.

Celebrating their 9th consecutive year of growth at their Annual General Conference. come in the forms of hotel accommodation, car leasing, we also may offer a maid service, procurement of internet and satellite television services as well as a handy man service. Finally, we are active in the business communities where we do business. Every year we exhibit at the largest iGaming exhibition in Excel London called ICE, we sponsor iGaming events such as the popular iGaming Socials and we are an organising partner of the Malta iGaming Seminar to mention a few industry based events that we are involved in. To sum it up Martin, we are probably the most proactive company in our industry that focuses solely on providing the best service possible. TEU: How important is the letting business to the economy and most important how do you feel RE/MAX Malta values the business of letting? EA: Firstly, RE/MAX Malta now and JK Properties Limited back then has always valued letting as a core business. Our vision has always been clear even when the company had started selling property and rebranded to RE/ MAX. Remember, back in 1999 we were the first company in Malta to really focus solely on letting whereas our competitors treated letting as a side business. Thereafter, we continued to lead the industry by growing our workforce to the extent that our competition followed. The company definitely treats RE/MAX lettings as an important key element of our core business and are truly focused in growing it to new heights. From an industry point of view, the letting industry has a huge multiplier effect on the economy and this is one of the reasons why the Maltese government is in discussion to reduce the tax band on rental incomes. This will incentivise investors to buy to let. When a rental investor acquires a property the investment does not stop there. They need to buy furniture, they usually decorate, purchase white goods whereas the tenant needs a maid, purchase groceries, frequents restaurants and so on and so forth so you can see the effect it has on the economy with one property. On 06 |

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the other hand you may get a clearer picture when you realise that there are over 4500 people employed in an industry such as the iGaming industry. I am sure that the Maltese Government will continue their excellent work in keeping Malta as the great Mediterranean business hub it is today. “the letting industry has a huge multiplier effect on the economy and this is one of the reasons why the Maltese government is in discussion to reduce the tax band on rental incomes”

TEU: Can you give me a guideline on what types of commercial and residential properties are more sought after in today’s market? Why would a client choose RE/MAX Lettings as their one stop shop? EA: With the influx of companies the commercial real estate industry has exponentially grown over the last few years. We have seen a large improvement in these accommodations where Malta today is meeting international standards. Customers commonly look out for highly finished, open plan offices with telecoms and internet ready to plug in and play. With regards to the residential market it obviously depends on what hierarchy level that the employee is on. Executives or C-level employees look for apartments within one of the lifestyle developments whereas the most looked out types of properties by staff and managerial level are those apartments that have 2 bedrooms and are newly decorated in a modern style and located in Sliema and St. Julian’s areas. We have the knowhow, resources and the aftersales service to be able to put a customer’s mind at rest knowing that their needs will be always be met in a timely manner and with their best interests at heart. TEU: What is the future of the letting industry and how does RE/MAX Lettings intend to remain the trend setters and industry leaders?

As for RE/MAX Lettings, we will continue to build our business by nurturing relationships, investing in the education of our associates and by being innovative. Innovation is crucial because of increased competition and also because the market keeps changing at times very quickly. Dr. Edward de Bono says it is better to change yourself then let your competition change you. President Obama says that in an ever changing world you cannot afford to stand still. So it is important to create an enabling environment with my team to be innovative. We are looking to recruit a few more agents which will complete our letting team. At the moment our team is spread out in three regions, North, South and Sliema and St. Julian’s whereas we are looking for some outgoing aspiring individuals to specialise in the Central areas of Malta and we are looking for others that will complement the rest of the team. TEU

Editor’s Note Edward Agius has worked in the letting Industry for over thirteen years. In 2004, he became m a n a g e r of RE/MAX Lettin gs and today mentors 23 lettings associates under the guidance of Kevin Buttigieg, CEO of RE/MAX Malta. Edward is inspired by his late Father, Mario Agius, a renowned photographer, and is committed to follow in his footsteps by inspiring others to work with integrity and respect. Edward has an active interest in the local football scene having been associated with different prominent local football clubs in the past before becoming a member of the committee of Luxol St. Andrews FC in 2012. You may contact Edward Agius on his Mobile is 99425088, Direct Line 2578 3303 or by email: edward@remax.com.mt

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interview Of THE MONTH

Rebuilding the Future by Martin Vella

Speaking with The Economic Update, Dr Simon Busuttil gave a cautious reprimand regarding the damage that can be created to Malta’s reputation with worrying remarks. Here he shares his views regarding the future of the Nationalist Party, LGBT issues, leadership values and his plans on winning back respect and trust of the people.

This is part 2 of an interview conducted in July 2013.

TEU: Recently, Joseph Muscat said he might use the veto in the European Parliament, which brings to mind the Helsinki shenanigans by Dom Mintoff. Don’t you think that that is going to create a lot of problems on how the EU member states view Malta and how the EU will deal with Malta? SB: Yes this is precisely what we have been saying. The very statement, or threat, that Malta would consider using its veto in areas which are unrelated to immigration sends shockwaves throughout the European Union and its institutions. This will isolate Malta and its Government. What could we possibly gain from this? The Prime Minister would do good to remember that the last person who threatened to use the veto was the far right Italian Interior Minister Roberto Maroni. And what was the result of all this? Italy was isolated from the Council of Ministers because of Maroni’s stand. We now have a socialist prime minister in Malta speaking like a minister belonging to the far right. This is incomprehensible! The Prime Minister’s handling of this situation has undoubtedly harmed our reputation, which took us nine years of hard work to develop. Here we have a Prime Minister who is very good at playing the populist card but who has not yet realized that his actions are extremely short-sighted. This is a very dangerous game, and the implications of these statements could lead to very serious repercussions. We must keep in mind that if, God forbid, we are isolated at EU level, this will have ripple effects across the board, including in foreign relations and investment. TEU: What is your position regarding the gay community and LGBT issues such as same-sex partnerships, noting the party’s lukewarm stance in the past? SB: Unfortunately, the Nationalist Party in Government did not do enough to address the concerns of the gay community. This is 08 |

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something I had already started addressing and would like to address fully in Opposition. For instance, in the Nationalist Party’s electoral programme, we had made two important pledges to the gay community: first of all, to amend the Constitution by inserting a clause against discrimination on grounds of sexual orientation. And secondly, we made a commitment to introduce civil partnerships. The second pledge in particular marked an important step forward for the Party. But it is patently clear that these commitments came too late in the day, by which time we had already lost the trust of the gay community. I want to rebuild that trust. In fact, one of our first decisions from the Opposition benches was to table a private members’ bill proposing the insertion of the non-discrimination clause in the Maltese Constitution in line with our electoral promise. By acting on our commitments, we are now bridging the gap with the gay community. “The very statement, or threat, that Malta would consider using its veto in areas which are unrelated to immigration sends shockwaves throughout the European Union and its institutions. This will isolate Malta and its Government”

TEU: The PN had no answer to Joseph Muscat during the last election and resorted to negative mudslinging. What do you have to say about this? SB: First of all, I think the Nationalist Party was wrong in underestimating Joseph Muscat. However, it would be unfair to criticize the Nationalist Party as though it was the source of the negative voice of the election campaign. Lest we forget, the first negative story to break out over the course of the campaign was the Enemalta oil scandal. Here we had a scandal which took place ten years ago, but which was brought up as a political attack during an election campaign

ten years later. To top it off, the Nationalist Party was the party accused of being negative! Over the past five years, the Labour Party was always an extremely negative Opposition and yet admittedly it managed to portray itself as a positive force in the last nine weeks of the campaign. Joseph Muscat is strongest in marketing and media hype, and in the end he managed to sell the Labour Party as a positive party. Indeed, his greatest challenge now is

interview Of THE MONTH

to translate the media hype he created into action, something he is clearly finding very hard to achieve. TEU: What does leadership mean to you? SB: A leader is expected to take decisions and, quite simply, to lead. This means taking decisions in the best interests of the people a leader represents, even if these same interests are not popular or not immediately apparent. In my opinion, what differentiates a charismatic leader from a populist leader is that populist leaders pander to the public mood and simply shift their flag according to the direction of the wind. I refuse to be a populist leader, even if this can appear unpopular at first. One of the clearest examples of this was my stand on immigration. A leader must also motivate those around him, and this is a fundamental challenge for me right now at party level. As we rebuild the foundations of the Nationalist Party on all fronts – organizationally, financially, politically – I am working with our leadership team to open the doors of the party, bring

people together, generate enthusiasm and motivate our grassroots campaigners and volunteers. We have huge challenges ahead of us, and we can only rebuild the party by having all hands on deck. Another crucial challenge for a leader is to rebuild trust and credibility. I don’t expect the public to trust me simply because I am the leader of the Nationalist Party. I want to earn the public’s respect by representing them in a fair, consistent and transparent manner. I did this both as a Member of the European Parliament and as Deputy Leader, and I will definitely keep this style of leadership as party leader. “The decisions implemented as part of this restructuring exercise are expected to start bearing fruit by the end of September, when we will register our first steps towards sustainable accounts and wage bill”

TEU: Do you believe in marketing? SB: Yes, marketing is a crucial component in every aspect of public life, but it should never come at the expense of substance. TEU: What are you doing to tackle the Party’s current financial situation? SB: The Party is currently undergoing a major restructuring process aimed at placing its companies on a sound financial footing. This has entailed several decisions, all of which were aimed at making our commercial entities leaner and more efficient. These decisions are being taken as a result of the recommendations given to us by the Party’s Finance Commission headed by Ray Bugeja. The decisions implemented as part of this restructuring exercise are expected to start bearing fruit by the end of September, when we will register our first steps towards sustainable accounts and wage bill. Putting our finances in order was one of my major commitments on being elected leader, and is a crucial precursor for moving forward as a strong party in the future.

TEU: What is your message for those who were shocked by the change of direction taken by the Nationalist Party and also those in the party who refused their support? SB: My message is that I am here to listen and to act where it is the right thing to do. I won’t mince my words: we disappointed many people and this is evident in the electoral defeat we suffered. This has had an impact in several areas. In the southern districts, for instance, we have only elected one out of five possible representatives in the second, third, fourth and fifth districts. This has severely weakened our ability to represent the public in these areas. And these are areas where we need to be strongest and most vigilant, especially when considering the Labour Government’s commitment to developing a new power station in Delimara. I have taken numerous measures to ensure the Party reconnects with the electorate. Firstly, I asked Francis Zammit Dimech to lead a commission which has now proposed important changes to the party statute to make the party structures more representative. At district level, we are beefing up representation and joining forces where possible, such as through the introduction of a Committee for the South led by Dr Stephen Spiteri. This way, everyone will feel more welcome and much better represented at party level. TEU: Where do you see the party in five years’ time? SB: In five years’ time, I want to present the Nationalist Party to the electorate as a truly alternative government. I am aware of the magnitude of this challenge, particularly when considering the large defeat we suffered in the last general election. This is why we need all hands on deck, and why we must first work towards rebuilding credibility, respect and trust as a serious Opposition. I have no doubt that we will rise to the occasion by uniting as a party in Opposition and by putting our house in order. TEU

Editor’s Note Simon Busuttil took office as Leader of the Opposition in May 2013 after having been elected Leader of the Nationalist Party. A lawyer by profession, Dr Busuttil specialised in European studies and was at the forefront of the campaign in favour of Malta’s membership in the European Union. Simon Busuttil served as a Maltese Member of the European Parliament between 2004 and 2013. In his role, Dr Busuttil led the European People’s Party (EPP) in the Civil Liberties, Justice and Home Affairs Committee. In June 2009, he was re-elected to the European Parliament with a record 28% of the national vote (68,792 votes), the highest percentage score in the European Union.In 2012, Simon Busuttil was elected Deputy Leader of the Nationalist Party. In the 2013 election, he was elected an MP of the Maltese Parliament.

August 2013 | THE ECONOMIC UPDATE

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Banking

Recent Developments in Banking Legislation By Dr Stefan Grima

Recent months have seen two developments which are intended to have an important effect on the banking sector.

The Payment Services Directive – Version 2

payments are effected by card, such as when one purchases airline tickets.

countercyclical capital buffer and capital buffers for systemically important institutions.

On the 24 July 2013, the EU Commission announced that it was adopting a legislative package in the field of the EU payments framework. This package proposes a revised Payments Services Directive (the “PSD2”) and a Regulation on Multilateral Interchange Fees (MIFs). This directive is more extensive than its predecessor, both in relation to the geographical scope as well as the currencies covered.

It is being proposed that interchange fees for consumer credit and debit card transactions are charged on a per transaction basis at 0,3 and 0,2% respectively. Any net compensation received by an issuing bank from a payment card scheme will be treated as an interchange fee. Commercial cards, ATM withdrawals, and transactions with cards issued by thirdparty schemes (such as AMEX or Diners) are however exempt from the cap.

CRD IV also makes changes to rules on corporate governance, including remuneration, and introduces standardised EU regulatory reporting. These reporting requirements will specify the information firms must report to supervisors in areas such as own funds, large exposures and financial information.

The PSD2 applies where both the payer’s payment services provider and the payee’s payment services provider are located within the European Union or where only one of the payment services providers is located in the European Union. Thus the so-called ‘one-leg’ transactions are brought within the scope of the PSD2. The PSD2 focuses on increasing transparency of conditions and information applying to payment services in any currency and value dating. The package proposes to eliminate the present exemption in relation to payments executed through mobile phones and other IT devices and ATM withdrawals, and the prohibition on non-payment service providers to provide payment services.

What does this Directive mean to consumers? If the proposal goes through, consumers will benefit from better protection against fraud, possible abuses and payment incidents. A typical scenario would be disputed or incorrectly executed payment transactions. In such instances, consumers may be required to face only very limited losses – up to a maximum of €50, rather than €150, as is the case today. The EU Commission is proposing the banning of surcharging in respect of consumer debit/ credit cards. This refers to the practice whereby some merchants impose an extra charge when 10 |

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The proposal also aims to regulate new types of payment services, such as payment initiation services and third party payment providers, which offer consumers the possibility to pay instantly for their internet bookings or online shopping without the need for a credit card. This creates a level playing field among different payment services providers.

The CRD IV Package The CRD IV package transposes the new global standards on bank capital (commonly known as the Basel III agreement), aimed at tackling some of the vulnerabilities shown by the banking institutions, in some countries, during the international crisis into the EU legal framework. This package is made up of the Capital Requirements Regulation and the Fourth Capital Requirements Directive. It was formally published in the Official Journal of the EU on the 27 June 2013. Most of the rules will become effective from 1 January 2014. In addition to the implementation of the Basel III rules, the CRD IV package proposes sanctions for non-compliance with prudential rules, corporate governance and remuneration. The new rules include enhanced requirements for quality and quantity of capital, a basis for new liquidity and leverage requirements, new rules for counterparty risk, and new macro prudential standards including a

CRD IV is bringing about a paradigm shift in capital and liquidity standards. In a context of heightened concern from clients and investors about bank resilience, banks perceived to be safer as a result of strengthened capital and liquidity ratios should attract more customers whilst affording them greater peace of mind.

Moving forward The two initiatives discussed have different goals, however a common thread underlines them. They are both inspired by a need to create a level playing field, whilst affording customers greater piece of mind and strengthening the competitiveness of the EU banking sector. TEU

Editor’s Note Dr Stefan Grima obtained his LL.D. degree from the University of Malta in 2002, and joined Bank of Valletta in 2004, where he currently heads the Legal Advice section, which is responsible for granting legal advice to the Bank’s branches and departments, internal lecturing, drafting/reviewing of agreements with third parties and bank standard forms/ procedures, and compilation of reports in respect of EU/local legislation affecting banking.

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Insurance

INVESTING Through Funds by Stuart Fairbairn

We are often asked whether it is better to invest directly in bonds and equities or to invest through a fund. The answer is not always the same since it very much depends on individual circumstances, what you are trying to achieve and your time horizon. Investors who have the information, knowledge and time to carry out in-depth individual security analysis and are perhaps more interested in short term gains notwithstanding the increased risk are potentially better suited to direct investments; whereas investors wanting to spread their risk and are more interested in longer term growth would normally benefit from investing in funds.

What is a fund? A fund is simply a collection of assets owned by a group of investors and managed by a professional investment company. They were originally designed to offer retail clients access to the types of professional fund management services previously only afforded by the extremely wealthy. By investing in a fund you are pooling your money with that of other investors, generating numerous advantages, with of course some disadvantages.

Why use a fund rather than invest directly? One of the basic rules to sensible investing is to spread your risk and not have “all your eggs in one basket”, commonly referred to as diversification. This can take many forms from diversifying across asset classes (cash, bonds, equities, property and commodities), different regions (globally, specific areas or countries) and sectors (e.g. healthcare, financials, consumer goods). By diversifying you reduce the impact of the performance of any one asset on your total portfolio. As a direct investor you might find it difficult to reach your optimum level of diversification, unless you have a large amount of capital to invest. As an investor in a fund you are provided with the immediate benefit of diversification since the fund will invest in typically between 50 and 200 securities depending on its focus and strategy. Purely as a means of an example 12 |

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the Fidelity Euro Blue Chip Fund currently invests in the shares of 62 different companies throughout Europe, with its top holdings in companies such as Siemens, Volkswagen, Bayer, Sanofi, UBS and Allianz. To compile a well-diversified investment portfolio requires time to research companies, markets, economic conditions and outlook. By investing in a fund you are effectively hiring the fund manager and his team to do all of these things for you.

What are the other advantages? Diversification is perhaps the main advantage of investing in funds; however it is not the only one. Other advantages include: 1. Professional Management: it can be difficult and time consuming to pick and choose the best individual shares and bonds. 2. Liquidity: money invested in listed funds is generally liquid, which means you can buy and sell your holdings in the fund usually within 24 hours, although different funds do have different dealing times. 3. Service: investment fund companies generally have excellent representatives on hand to provide you with any information you require. 4. Convenience: it is easy to invest in a fund and they often have low minimum entry amounts. Many savings and investment products offer access to funds at very low entry levels.

What are the disadvantages? Each fund will have its own set of charges and expenses to pay for the fund manager and the costs of distribution. The charges will obviously detract from the overall return you receive and so should be fully understood before investing. In Malta non-prescribed funds (those with less than 85% of their assets invested in Malta) are subject to Withholding Tax on any capital gains you make.

Are all funds risky? In life there is no such thing as a risk free investment. Even the perceived safe havens of German Bunds and US Treasuries carry their own risks in times of low interest rates and inflation. All funds carry a level of investment risk with some riskier than others. Most funds are now rated on a scale from 1 to 7, so whatever your personal risk tolerance level there should be a fund suitable for you.

How to invest in a fund? Investing in a fund is probably much easier than you think. Most Investment Service License holders, Banks and Insurance Companies are able to offer easy access to funds, whether you want to invest a lump sum or would like to save on a regular basis.

What information should I check? Before making any investment you should ensure you are fully aware of where the fund invests, the investment strategy and any associated risks and charges. All of this information is easily obtained through the Key Investor Information Document and Fund Prospectus which is always readily available on request. TEU

Editor’s Note

Stuart Fairbairn is Chief Officer Business Development at MSV Life plc and the General Manager of Growth Investments Ltd, a wholly owned subsidiary of MSV Life plc.MSV Life p.l.c. is authorised by the Malta Financial Services Authority (MFSA) to carry on long term business under the Insurance Business Act, 1998. Growth Investments Ltd is authorised to conduct Investment Services Business by the MFSA and is an enrolled Tied Insurance Intermediary of MSV Life p.l.c. under the Insurance Intermediaries Act, 2006. COM220813

Interested in investing in funds? then take a look at this...

Special Offer The MSV Investment Bond - Available for Investments in Euro, Sterling and US Dollar Increased Fund Choice with up to 40 funds to choose from Reduced Minimum Investment Amount Reduced Charges for more information contact MSV Life on freephone 8007 2220, send us an email on info@msvlife.com, contact any of our Tied Insurance Intermediaries or visit any branch of Bank of Valletta or APS Bank.

The value of investments may fall as well as rise and product charges may reduce the amount received on redemption. Investments should be based on the full details contained in the Key Features Document and the Policy Document, available from our offices. MSV Life p.l.c. is authorised by the Malta Financial Services Authority to carry on long term business under the Insurance Business Act, 1998. Bank of Valletta and APS Bank are enrolled as Tied Insurance Intermediaries of MSV Life p.l.c. COM 260313/4

Banking

Analysing FIMBank’s half-yearly performance By Martina Urso Positive operating results for the six months ended 30 June 2013 from all of FIMBank’s main companies were overshadowed by the impact of provisions on impaired assets during this period. The FIMBank Group’s results, which were announced recently, reveal that although the Group’s operating income increased by 12% during this period, from USD17.17 million to USD19.32 million, a number of impairments affected FIMBank’s bottom line significantly. “In the current market and political conditions, FIMBank’s development of new banking and structured trade finance business will remain selective and focused on our core competency”

The Group posted an after-tax loss of USD6.98 million at the end of June 2013, compared to a profit of USD4.55 million registered during the same period in 2012. Other key financial indicators highlighted in the Group’s interim results show Total Consolidated Assets standing at USD1.12 billion, in line with the USD1.13 billion reported at end 2012, while Total Consolidated Liabilities reached the USD1 billion mark, thus remaining at the same level as last year. Net Interest Income increased by 33% to USD7.37 million. Liquidity was healthy with the relevant ratios consistently above the required regulatory threshold, while both the Basle II Capital Adequacy Ratio, at 15.04%, and a Tier 1 Capital Ratio of 11.44% at end June 2013 remained robust and comfortably above the regulatory minimums. Commenting on the Group’s performance during the first half of 2013, FIMBank President Margrith Lutschg-Emmenegger says that, “In the prevailing challenging operating environment, we adopted a cautious approach 14 |

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towards developing new relationships. In the current market and political conditions, FIMBank’s development of new banking and structured trade finance business will remain selective and focused on our core competency, cross-border trade finance. Having said that, our model is diversified and dynamic, and we have the capability to react quickly to developments in the markets in which we operate.””. On the subject of the impaired assets, the FIMBank President explains that the Board’s decision was to adopt a very prudent approach, and consequently the Bank took conservative provisions on these impaired assets. She adds that legal remedies were in process for their recovery. Lutschg-Emmenegger expresses confidence when talking about the Bank’s new reference shareholders: “We are experiencing tangible benefits as a result of our forming part of the KIPCO group. This new institutional shareholding will result in access to more favourable funding, increase in equity, intra-group technology transfers and the development of new business opportunities, which will undoubtedly result in more profitability.” On the other hand, FIMBank also has much to contribute towards KIPCO: “FIMBank is considered as the trade finance centre of excellence within the KIPCO Group, and we are determined to find suitable opportunities to reap the benefits of leveraging Group synergy”. With regard to short-term prospects, the FIMBank President states that “Our immediate objective is to ensure that our untiring efforts to drive value during the second six months of the year are reflected in the bottom line. We are very confident that with our business model and the new institutional shareholder on board, we can achieve the goals we have set for ourselves”. TEU

COMPANY DNA Name : FIMBank plc Organisation: FIMBank is an international trade finance specialist with an established reputation as a dynamic and customer-driven provider of trade finance solutions. Through its strong correspondent banking network and offices located across the globe, the Bank offers a unique environment in which trade finance opportunities are identified, innovatively structured and successfully executed. Line of business : Trade Finance Bank Number of Employees : 180 Main/Products:documentary collections, letters of credit, factoring, forfaiting, bonds and guarantees, commodity trade, counter/barter trade facilities, warehouse finance, ship finance, treasury management, syndications accounts in all convertible currencies, international payments Offices: Malta, London, New York, Singapore, Sao Paulo, Mumbai, Moscow, Istanbul, Cairo, Beirut, Dubai Establishment: 1995 Fitch Rating:BB (Outlook Stable) Total Equity: US$ 126 million Total Assets: US$ 1.1 billion

Trade Finance Solutions engineered for business success

FIMBank is an international trade finance specialist with an established reputation as a dynamic and customer-driven provider of trade finance solutions. Through our strong correspondent banking network and offices located across the globe, the Bank offers a unique environment in which trade finance opportunities are identified, innovatively structured and executed.

fimbank.com

SINGAPORE Sﾃグ PAULO NEW YORK MUMBAI MOSCOW MALTA LONDON ISTANBUL DUBAI CAIRO BEIRUT

FUND MANAGEMENT

Value Proposition

Part 1

By Martin Vella

Kenneth Farrugia, Chief Officer - Fund Services at Bank of Valletta plc responsible for Valletta Fund Management Limited and Valletta Fund Services Limited maintains that the accessibility of the Malta Financial Services Authority (“MFSA”) coupled with Malta’s comprehensive legal and regulatory framework, are the key success factors of the local funds industry. Undaunted by the growing challenges ahead, Mr Farrugia gave this frank interview to The Economic Update. TEU: Malta’s Funds industry and the financial sector have continued to register strong growth as the statistics clearly show. What have been the key factors of this success? KF: In 1994, Malta paved the way for the development of the financial services industry which includes amongst others the investment funds sector by enacting through Parliament a comprehensive legal and regulatory framework which overhauled Malta’s positioning from an offshore financial centre to an onshore one. As a result of these developments, the funds sector was one of the sectors within the industry that has experienced significant growth. To put this growth in context, whilst in 1995, there was only 1 collective investment scheme consisting of two sub-funds, the number has increased to more than 570 funds today. As a leader in Maltese banking, Bank of Valletta p.l.c. was the first banking institution in Malta to take up the opportunities that were created as a result of the 1994 legislation by setting up Valletta Fund Management Limited (VFM) together with Rothschild Asset Management. Today, VFM is jointly owned by BOV and Insight Investment Management Limited, one of UK’s largest asset managers and a fully owned subsidiary of the Bank of New York Mellon Corporation. VFM has over the years strengthened its position in the market and offers investors a comprehensive range of domestic and international investment funds in turn investing in the main asset classes in all major currencies and across different markets. 16 |

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The growth enjoyed by this sector, which was in the very early years driven by the domestic financial services providers in turn attracted the attention of a number of international asset managers such as Fidelity, Hendersons, Schroders, Thames River, Lloyds and other fund managers that distribute their funds in Malta. “Albeit Malta is the smallest EU member state, we should leverage this reality by being fast and nimble when opportunities are presented by the market.”

EU Membership, in my view was the catalyst that brought about a strong paradigm shift; one where the industry was primarily led by the domestic market to a the new reality of an industry driven by international growth as a result of a fast growing number of international asset management organisations setting up Funds in Malta which are in their great majority promoted overseas. As a result, the dependency on the growth of this sector which was at the outset driven by the investment products that were periodically launched by Maltese asset managers is today driven by the lincesing and launch of investment funds managed by international asset managers some of which have also set up their operation in Malta. Equally EU membership has also enabled Malta to position itself as a fund domicile for UCITS funds which are regulated under the UCITS Directive and which in turn may be promoted cross border into Europe.

Here again, recognising the developments in this field, in 2006, Bank of Valletta as a leading organisation in Malta has set up Valletta Fund Services (VFS) to provide fund administration services to the international asset managers setting up funds in Malta. Today VFS is administering over Euro 2.6 billion across 134 investment funds managed by asset managers based in various EU and non EU countries. In my opinion, MFSA coupled with the support of the various stakeholders has been pivotal in the process. Over the years, in fact since 1995, the MFSA has continually updated Malta’s regulatory and legal framework to ensure that this is aligned to that in the rest of the Europe. In actual fact, when Malta came to join the EU, its legal and regulatory framework was found to be the most aligned to that in the EU when compared to the other countries that were set to become EU member states. Other equally important critical success factors include the presence of a robust operational infrastructure to include the presence of professional accounting and legal firms, competitively priced services and above all the presence of a highly skilled workforce. As a result, Malta is very well positioned and has a string value proposition when compared with other EU member states. There are of course other factors which are given a due weighting in the decision making process to set up a financial services business in a jurisdiction. These include

FUND IT MANAGEMENT Education

amongst others the presence of a sound macro and micro economic environment, level of accessibility to the country and equally important the country’s lifestyle. TEU: VFM was the first asset management organisation that was set up in Malta to manage and promote Collective Investment Schemes. What are the main reasons for VFM’s success over the past 18 years and where do you see VFM in the next couple of years? KF: VFM commenced its operations from very humble beginnings operating in a market which was virtually new for Malta. Today, the Company manages over €723 million funds under management (as at 31 July 2013) and services a client base of over 30,000 investors. Over the years, VFM has widened its product range to meet the evolving and changing needs of investors. The Company has five key product categories centering around the various investment needs of investors. These consist of liquidity funds primarily investing in money market instruments and bank deposits, income driven investments investing in the bond markets, income and growth investments consisting of balanced portfolios of equities and bonds, growth funds investing in shares of domestic and international companies as well as absolute return funds category which invest in various asset classes with no particular skewness to any one class. Clearly, one of the difficult factors to manage in this business is the performance of the capital markets which is conditioned by macro economic and international political developments. In fact, the crisis that gripped the world’s capital markets in 2008 and for a number of years thereafter has

had a negative impact on investments in general. This highlights the importance of investment diversification and the need to seek professional investment advice where and when needed. Within the context of the state of flux of capital markets, investing on a monthly investment basis is in my view a highly interesting way to build up an investment portfolio in capital markets. Monthly investment in VFM’s funds is a highly flexible investment method as there are no lock in periods and investments are easily accessible commencing from a low minimum investment of Euro 50 per month. “Since its set-up in 1995, VFM has widened its the range of investment solutions to cater for the key five investment objectives of investors”

Going forward, VFM is aiming to ensure that it investors may access the various investment opportunities in the world’s capital markets through the provision of easily accessible professionally managed and cost competitive investment solutions. Investor education has always featured highly in VFM’s plans and over the years the Company has invested in various initiatives to include investor education sessions as well as radio and TV programs aiming to strengthen the knowledge of investors on investments in capital markets. Furthermore, we are currently reviewing our product suite to ensure that these address the changing investor requirements. Last but not least, VFM is actively following up on the much spoken and debated pension reform as in my view this is an equally important milestone for Malta’s asset management industry. TEU

Bruno L’Ecoyer, Kenneth Farrugia together with Minister for the Economy & Small Business Dr Chris Cardona, PS Dr Edward Zammit Lewis

Editor’s Note Kenneth Farrugia joined Bank of Valletta plc, Malta’s largest banking group, in 1985 and over the years has occupied various positions within the Bank. Kenneth currently holds the post of Chief Officer Fund Services and sits on the Executive Committee of the Group. He is responsible of the Bank’s two subsidiaries; Valletta Fund Services Limited, the Bank’s fund servicing arm, and Valletta Fund Management Limited a joint venture between Bank of Valletta plc and Insight Investment Management, a fully owned subsidiary of Bank of New York Mellon. Kenneth is also the Chairman of FinanceMalta, Malta’s national promotional body for financial services, and also serves as Chairman of the Malta Funds Industry Association. He is also the Chairman of Malita Investments plc, which is listed on the Malta Stock Exchange. August 2013 | THE ECONOMIC UPDATE

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Exclusive: EU/ASIA Relations

How Europe can unlock ASEAN potential By Noel Quinn

“ASEAN countries have the potential to offer the low-cost manufacturing and high output seen in China 30 years ago.” The potential of many Southeast Asian countries has been overshadowed by China’s role as Asia’s economic powerhouse. Europe is focused on China but the vast trade opportunities with Southeast Asia have been largely overlooked. The ten members of the Association of South East Asian nations (ASEAN) account for 600m people with a combined GDP of USD2.1 trillion, solid growth, low manufacturing costs and a rising middle class. Southeast Asia enjoys healthy trade volumes with China, while regional trade has also grown. This has been helped by ASEAN, which was formed in 1967 to accelerate economic growth and develop free-trade agreements between member countries. The ASEAN Economic Community, which comes into being at the end of 2015, should further boost trade by introducing zero tariffs on all goods between Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Singapore, Thailand and Vietnam 18 |

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Exclusive: EU/ASIA IT Education Relations

Europe though has failed to fully capitalise on business opportunities in the region. There has been some progress: the EU recently concluded a free trade deal with Singapore and is currently in negotiation with Thailand. Although Singapore and Thailand have wellestablished business ties with Europe, other members of ASEAN such as Vietnam and Malaysia have yet to emulate their success. In many instances Western companies have identified China as a preferred option when setting up manufacturing facilities. But this is beginning to change as Southeast Asian markets become more accessible and increasingly competitive on costs. “The rising spending power of ASEAN countries and the strengthening of demand in their domestic markets could help to unlock huge growth potential”

China is shifting away from low-value, labour-intensive industries such as textiles to higher value-added manufacturing such as industrial machinery and information and communications technology. This has created opportunities for China’s neighbours, especially Indonesia and Vietnam, with their large working populations and lower wage costs, to fill the void. ASEAN has embraced the opportunity to create the sort of lowcost, high-volume manufacturing that ignited China’s economic boom 30 years ago. Demographics also play a key role in ASEAN’s economic growth prospects. With growing disposable incomes and increased urbanisation, ASEAN trade is expected to grow sharply over the next decade. Indonesia alone has a population of 242 million, of which 165 million are people of working age. This is attractive for multinational companies who want low-cost labour and a dynamic domestic market with a rising urban middle class.

Whereas Vietnam is now a leading manufacturer of footwear, the Philippines is strong on outsourcing, particularly in IT services, while Malaysia and Indonesia offer foodstuffs , and natural resources. Healthy trade with China is important to ASEAN countries (ASEAN trade with China grew from USD 7.4 billion in 1990 to over USD 290 billion in 2011) but intra-ASEAN trade is also important and on the rise. Take Vietnam as an example, intra-regional trade is forecast to grow by more than 15 per cent a year to 2020 with Indonesia and Malaysia fastgrowing export partners. ASEAN’s potential is attracting attention from some of the world’s largest economies notably China and the US. The headsof-government ASEAN summit, which was held once every five years, is now every year. The summit, designed to increase cooperation between nations, has increasingly attracted attendees from non-member countries. Senior representatives from China were present at the 2012 summit in Phnom Penh, as was the US President Barack Obama

How Europe can unlock ASEAN potential

The rising spending power of ASEAN countries and the strengthening of demand in their domestic markets could help to unlock huge growth potential. However there is a risk that growth in inter-ASEAN trade could stall unless it can mobilise the finance and expertise needed to tackle serious infrastructure problems.

Vietnam has a population of 89 million but should reach the 100 million mark by the mid2020s, with the average age in the country just 27. Vietnam has been able to grow its textiles sector rapidly in recent years, helped by its competitive wages: clothing and footwear manufacturing is forecast to make up around a fifth of the growth in Vietnam’s exports from 2013 to 2015, according to the latest report by HSBC Global Connections. The workforce is young, well-educated, industrious and keen for economic development.

For example there are no decent rail links between Thailand and Vietnam or viable road routes between Burma and Thailand. We estimate that Asia needs USD 11 trillion (China accounts for a large proportion of this) to fund crucial infrastructure development including upgrading roads and railways to handle more goods. ASEAN member nations are struggling to fund such major projects themselves and this is where finance from Europe could play a crucial role. The Philippines, Indonesia, Vietnam and Thailand have tried to promote

public-private partnerships but the current rate of investment is unlikely to be sufficient. The potential is there to step this up. The onus is now on Europe and ASEAN to increase dialogue and make the most of a significant, long-term and mutually beneficial business opportunity. TEU

Editor’s Note Noel Quinn is Group General Manager Regional Head of Commercial Banking Asia Pacific for the HSBC Group, and has responsibility for the Group’s relationship with all middle market corporates and small and medium enterprises in Asia-Pacific. Before taking up his current role in April 2011, Mr Quinn was Group General Manager and Head of Commercial Banking in UK and was instrumental in leading this business through one of the most difficult economic periods in recent history. Mr Quinn joined Forward Trust Group, a subsidiary of Midland Bank, in 1987. He led HSBC’s acquisitions of Swan National Motor Finance and Eversholt Leasing Ltd, becoming General Manager of each business in turn. He has since taken up postings including Head of Specialised and Equity Finance at HSBC, Group Director of Strategy & Development at HSBC Insurance Services North America and Head of Commercial Finance Europe. Mr Quinn qualified as an accountant with Grant Thornton in 1987. He also studied at Kellogg Graduate School of Management in Chicago and the Royal College of Defence Studies in London. August 2013 | THE ECONOMIC UPDATE

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Woman on board

International speaker for Women on Board event Madi Sharma says Malta's men are keeping Malta bottom of the European table By Specail Correspondent Entrepreneur and activist Madi Sharma is the keynote speaker for the “Women on Board” Conference at Europa House on September 13, organized by the National Council of Women and the European Parliament Information Office in association with the Institute of Directors Malta Branch and the Malta Institute for Management.

Madi Sharma who will be in Malta on September 13 to give the keynote address at the Women on Board event at Europe House in Valletta says that Malta’s men have put Malta squarely at the bottom of the European table when it comes to gender equality in the boardroom. Madi Sharma has written many opinions for the European Economic and Social Committee on issues surrounding women and is an international speaker and freelance journalist on the subject. She is an entrepreneur with private sector businesses and NGOs in different parts of the world. Mrs. Sharma says, “The business case clearly shows that Women on Boards bring a higher return on investment and an increased share price. Hence, this is not a gender debate, nor about quotas or tokenism but this is about good economics with good transparent business practice”. Madi Sharma is UK member of the European Economic and Social Committee and will be speaking at Europe House in Valletta to explain why gender equality in Malta is a prerequisite to the country’s success and growth. Across Europe there is increasing debate on gender equity in decision making, much of this stimulated by the forthcoming Directive from the European Commission Vice President Vivianne Redding on Women on Boards. However, before starting the debate in depth in Malta it is essential to remove the myths and rumours that have been circulating the debating tables. The first major misconception is that the new Directive, and any other moves for equality in decision- making are based on quotas. The word quota does not appear anywhere in the proposed EU Directive, which will be based on ‘merit and preference’. This means that only in the situation of a man and woman being of equal qualifications, applying for a position as a non-executive director on a publically listed company board, will the female receive preference. In all other cases, the most highly qualified of the two will receive the position. The Directive only sets out a 40% targeted objective and mechanisms to ensure transparency of recruitment in a bid to remove current discrimination against qualified women. 20 |

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“The other big myth,” says Mrs. Sharma, “is that if we give the ‘natural cycle’ time, women will automatically receive equality. This debate is sadly now centuries old and we see little change in the equality stakes, despite the fact that women are now more highly qualified than men. The gender pay gap, pensions gap and access to rights are all in favour of the male gender. Most distressing, is that many reproductive rights of women are still decided upon by men. European statistics and complex analysis clearly shows that left to their own devices, we would be into the next century before the natural cycle took its course.” And why is this so important to Malta? Because Malta as one of the 28 member states of the European Union, which has been built on a foundation of equality and human rights, Malta sits at the bottom of the EU table for gender balance. The final myth is that this is a ‘woman’s issue’. Mr. Sharma says, “Actually, it’s quite the opposite. We will not have any change unless we get men around the table to participate in the debate. This is not a debate about women verses men. This is not a request for preferential treatment or privileges. This is about a need for women and men to be treated equally whilst admitting we are different. This is about the social and economic benefits, and ultimately environmental and cultural benefits, which result from increased equality.” Women on Board is being organised by the National Council for Women together with the European Parliament Information Office and in association with the Institute of Directors Malta Branch and the Malta Institute for Management and will be held at Europe House in Valletta on September 13. For further information about the ‘Women on Board’ Conference with Malta’s MEP’s please call 21 23 50 75 or visit www.europarlmt. eu or visit the facebook event page at https://www.facebook.com/#!/ events/678022468893588/ TEU

New President for MACM

Business Exclusive Appointments interview

By Charles Xuereb

Charles Xuereb worked with a leading firm of auditors before joining the Farsons Group of companies. He started his career in industry as Chief Accountant of the group’s international food franchising business, then assumed the role of Financial Controller of a newly acquired food importation business in 2004. For the last eight years he held the office of Chief Financial Officer of the group responsible for the overall financial management of the group, sits on the board of directors of all the subsidiary companies and forms part of the Group Executive Board.

Mr. Michael Degaetano, B.A. (Hons) Accty., C.P.A., P. Cutajar & Co. Ltd.

Charles has been a council member of M.A.C.M. for the last seven years and a Vice President for the last two years. Charles is married and has a 13 year old daughter.

Mr. Antoine Galea, BA (Hons) Accty, FIA, CPA, MIM, MBA(TQM) Leicester University Enemalta Corporation

The elected members and officials of the Malta Association of Credit Management for the ninth Council (2013 – 2015) are: Mr. Charles Xuereb, BA (Hons) Accty, FIA, CPA, MIM Simonds Farsons Cisk Plc President Mr. Peter Wirth, Alf Mizzi & Sons (Marketing) Ltd. Deputy President (Administration) Mr. Hugh Mercieca, ACIB Mizzi Organisation Deputy President (Legal & Political Affairs) Mr. Joseph Dimech MICM (Grad) GO Plc Deputy President (Education) Mr. Charles Arapa AICM Express Trailers Group Dr. Louis Bianchi, B.A., LL.D. Bonnici Insurance Agency Ltd.

Mr. Mario Delicata, B.Sc. (Hons) Emmanuel Delicata Winemaker Ltd.

Mr Joe Hili Francis Busuttil & Sons Marketing Ltd Mr. Anthony Rossi, M. Demajo Group of Companies The Malta Association of Credit Management (MACM) is a notfor-profit organisation, providing a central national organisation for the promotion and protection of all credit interest pertaining to Maltese businesses. MACM represents the credit profession across all economic sectors. It is a centre of expertise for all matters relating to credit management in Malta. MACM offers a range of services to the local creditors, including, credit management information systems, credit management education, training, conferences, seminars, and lobbying activities. It is the ICM (UK) accredited Training Centre for Malta. MACM is a member of the Federation of European Credit Management Associations – FECMA. TEU

Editor’s Note A Certified Public Accountant by profession, Charles Xuereb worked with a leading firm of auditors before joining the Farsons Group of companies in July 1995. He started his career in industry as Chief Accountant of the group’s international food franchising business, then assumed the role of Financial Controller of a newly acquired food importation business in 2004. For the last eight years he held the office of Chief Financial Officer of the group responsible for the overall financial management of the group, sits on the board of directors of all the subsidiary companies and forms part of the Group Executive Board.He has been a council member of M.A.C.M. for the last seven years and a Vice President for the last two years. Charles is married and has a 13 year old daughter.

August 2013 | THE ECONOMIC UPDATE

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Assurence and tAX EVENTS

The BOV Boat Show One of the most sought after events to date in Malta’s maritime calendar is back for four days this September for the 7th edition of the BOV Boat Show. This established show in Malta’s calendar of events will feature over 70 exhibitors from around the world, including the most prestigious names in the boating and yachting industry. Since the annual maritime exhibition started in 2007, it has kept a steady growth making it the country’s biggest boating event, dazzling and delighting over 20,000 unique visitors annually. This year, the boat show provides four actionpacked days of fun and excitement for all ages. The Economic Update will be featuring a special supplement full of interesting articles, interviews and also the latest developments in the marine industry, a good way to stay informed about all aspects of boating. Speaking at the launch of the BOV Valletta Boat Show, the Minister for Transport and Infrastructure, Joseph Mizzi said that he is truly honoured to launch the boat show being held at Cottonera, the undisputed cradle of maritime Malta, which abounds with traditions dating back over many centuries. Mr Mizzi added that this Government is committed to ensure that the maritime sector continues to grow and flourish and has pledged to create a maritime hub of excellence in the Mediterranean. John Formosa, Director of Circle Events said that, ; “The BOV Valletta Boat Show is fast establishing itself as one of the leading boat shows in the heart of the Mediterranean”,

2013 By George Carol

confirming that his company has embarked on an ambitious marketing project overseas in order to attract foreign exhibitors from across the Mediterranean and a wider general public. A multilingual website, www. vallettaboatshow.com, has been set up to promote the boat show overseas. For the first time ever, a number of exhibitors from Italy will be taking part this year. Charles Borg, Bank of Valletta CEO congratulated Circle Events for organising yet another edition of the BOV Valletta Boat Show. “This event has become synonymous with the yachting industry, not only in Malta, but also in international circles. Bank of Valletta is proud to support this event which generates such a high level of interest in the sector, which is growing both for leisure and as sport.” From the latest in powerboats, sailboats and engines to cutting-edge marine electronics and accessories, the best in nautical gifts, services and apparel. The four-day event is

your once-a-year chance for the general public to compare makes, models, and gear up with the latest accessories all at one time.

BOAT SHOW MALTA 2013

The public can step inside a number of sailing boats, power boats and stands. Large vessels from the Armed Forces of Malta and a number of NGOs, private charters and other sea vessels will also be present at the BOV Valletta Boat Show. Beyond the boats and booths, special events, attractions and activities celebrate the boating lifestyle and offer entertainment for everyone. A special 24 page pull-and-keep-supplement is being published in the September edition of The Economic Update. The special pullout will provide in-depth information for all exhibitors, boat vendors and buyers, and boating enthusiasts. We cover topics ranging from in-depth boat tests to how to complete maintenance and repairs on your boat. We also highlight tow tests on the latest tow vehicles. The special feature is well researched, written, edited and photographed to be the quintessential authority in trailer able boats, marine propulsion, accessory installations and use, maintenance and repair, tow vehicles, boat tailoring, seamanship, water sports and cruising. For added impact, advertisers can contact: Margaret Brincat – Mob: 9940 6743; margaret@networkpublications.com.mt TEU

Venue: Boilers’ Wharf 26-29th September

Justin John Camilleri, Senglea Mayor Joe Mizzi, Minister for Transport John Formosa, Circle Events director Charles Borg, BOV CEO 22 |

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accountancy profession

Thought Leadership By Martin Vella

An Interview with Maria Micallef, Head of the Malta Institute of Accountants MIA President Maria Micallef is modest about her appointment to the Presidency of the Malta Institute of Accountants. Although the President is at its helm and is likely to leave his or her mark during the term of office, she reminded us that the Institute is managed by a body of persons who are all dedicated to serve the profession. Ms. Maria Micallef made history in July 2013 becoming the first woman to head the Malta Institute of Accountants.

Editorâ&#x20AC;&#x2122;s Note Maria Micallef is one of the founding partners of RSM Malta and is currently the partner in charge of risk management and business advisory services in the firm. Maria has been in practice for over twenty years during which time she obtained extensive experience in assurance, risk management and business advisory services, both locally and overseas. Maria is responsible for major assignments relating to the preparation of feasibility studies, cost control, internal audit, investigations, due diligence, business restructuring and investment appraisals. Maria is a visiting lecturer at the University of Malta. She also provides training courses to internal auditors in the public and private sectors. Currently Maria participates in Continued Professional Education Seminars lecturing on Internal Audit and Fraud. Maria has a B.A. Hons Accountancy degree and is a Certified Public Accountant. She is a fellow of the Malta Institute of Accountants, a member of the US Institute of Internal Auditors and a Certified Fraud Examiner. Maria is currently the President of the Malta Institute of Accountants. 24 |

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TEU: How do you intend to re-invent MIA under your helm to remain relevant in todayâ&#x20AC;&#x2122;s markets and to proactively address outstanding issues and what is your vision moving forward? MM: More than reinvention, the key is to continue to build on what there is bearing in mind the circumstances we find ourselves in today. My vision of the Institute is to bring it as close as possible to its members such that each of us will regard our membership as vital to execute well our profession. The Institute has come a long way. MIA is probably one of the oldest professional Institutes on the Island and has provided many services and support to its members during these years. We tended however to keep a low profile and although this may have served us well in the past it may not be so effective today in times where we must not only be active but seen to be active. One of the areas I would like to give emphasis to during my term of office is Thought Leadership. We are fortunate that the Institute has the necessary competencies, talent and resources to be able to speak with authority on relevant topics whether technical or ethical and we would like to

accountancyITprofession Education

become a point of reference to third parties that may be deliberating certain subject matter of relevance both to the profession and the public good. The latter has always been a very important consideration from our perspective as we firmly believe that if we only serve our self-interest as a profession we will fail. We also need to make better use of the media which today has become such an effective and forceful medium. We need to put forward our views with clarity and reason whilst avoiding the risk of turning matters into, or end up participating, in a public circus as sometimes happens in the media even with the most serious of issues. TEU: How do you intend to ensure safe and sound ethical practices by MIA members? MM: Ethics and good governance are the cornerstone of our profession so much so that today these subject matters are regarded as fundamental in the professional training provided to our graduates by University and professional bodies. Our members are bound by a professional code of ethics. Our members are also obliged to carry out a certain number of hours of professional education every year to be able to retain their membership and the state warrant. This ongoing education helps to keep members up to date with the developments taking place in ethics and governance. The Institute has its own investigation and disciplinary procedures that are meant to address any complaints that may be raised with respect to any of our members. We do not carry out witch hunts and look at the facts presented to come to a fair and logical decision that, if necessary, will address any wrong doing on the part of our members. TEU: Will you reign in any abuses which have not been officially reported during your tenure? MM: I call this a loaded question. As in every profession, as indeed in every walk of life, you are always going to have the ones (exceptions if we are doing things well) that are errant. This is life and no amount of regulation, legislation or deterrents are ever going to zeroise this risk. Each of our members is responsible for our collective professional reputation and the vast majority of our members work hard and well to safeguard this reputation. Unfortunately in the media when there is a rotten apple it gets photographed and talked about much more than a thousand good ones. We have a membership of 2,300 individuals and I can assure you that the vast majority of these people are honest, hard working, competent

individuals as may be attested by their clients, employers and other third parties we have regular dealings with. In those rare instances where our members have through their actions broken our code of ethics and conduct we have taken the necessary action. We will continue to do so in the future as the Institute has no interest or intention to protect such members. I repeat however that such instances are few and far between – indeed in the time I have been a council member (these last 8 years) I have come across very few such cases. TEU: In light of the agreement with MIA-ICAEW, will MIA increase similar agreements under your Presidency? MM: Education is key to our Institute. We however have limited resources and as such we need to collaborate with other organisations to be able to share information and tools that may be relevant to our members. Our agreement with ICAEW gives our members access to professional material they have developed and also caters for the joint delivery of seminars on subject matters that are current and relevant to our profession. “When Arthur Anderson fell, it wasn’t the Chicago office, it was the worldwide network that went down”

We have collaboration agreements or arrangements with other international and local organisations, such as ACCA and the University of Malta. We value them all as each one of them enables us to better serve our members whether students or graduates. Collaboration is successful if it is a two way street and this is what we try to achieve with all third parties that we work with. One of the challenges we face is the need to attract the best and brightest students to our profession. Irrespective of which course they follow to obtain their qualification, whether through university or professional route, we need to ensure as an Institute that we are reaching out to the young students to make them aware of the opportunities in our profession. TEU: You have in the past promoted thought leadership values and lobbied with third parties. What are your views on good governance and thought leadership when they work hand-in-hand? MM: When you are a professional there is a high element of trust in the relationship you are going to build with your client. And unless you are governed by ethics and good governance

principles that trust will be breached. Once it is breached, significant harm is not only done to the individual but also to the profession. One glaring example of how the action of the very few can have global ramifications is the Enron case. The result was that the whole profession suffered worldwide. Because of Enron Arthur Anderson fell. I used to be a partner of the local office that represented Arthur Anderson in Malta . When Arthur Anderson fell, it wasn’t the Chicago office that closed down, it was the worldwide network that went down. When you breach the trust the ramifications are not just on oneself but the profession as a whole. So as an institute we will always predicate the importance of ethics and good governance. Our emphasis on good governance also serves our members in good stead when we accountants move on to other posts including leadership positions. Naturally you cannot achieve thought leadership unless you are regarded as a competent and trustworthy body by your audience. We also need to work harder to build on-going communication and working relationships with third parties with whom our members interact actively on an on-going basis such as banks, regulators, professional bodies and the like. TEU: What benefits The Accountant magazine offers to its members and especially ACCA students and Corporate organisations in terms of thought leadership? The target audience of The Accountant are our students and members. The greater part of this publication relates to technically related articles, or developments happening within our profession. We also have a section called the lifestyle section where we focus more on the lifestyle of a particular Accountant. There is then a specific student section dealing on what is happening academically. You have two thousand three hundred members and also an appreciable number of students, so that the audience is quite large but dedicated. Bear in mind that notwithstanding you may find our journal on the coffee table or waiting area in an office and thus it may be that it is also read by people outside of the profession. Having said that though, I do not think that our journal is the more effective forum to make our opinion known to the world outside of our profession. We have to use other fora for that purpose. We are also currently considering the possibility of having an ijournal. TEU

August 2013 | THE ECONOMIC UPDATE

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Assurence and tAX Credit Management

Sustaining Market Share Through Granting Credit by Josef Busuttil

MACM Profile: The Malta Association of Credit Management (MACM) is a not-forprofit organisation, providing a central national organisation for the promotion and protection of all credit interest pertaining to Maltese businesses. MACM represents the credit profession across all economic sectors. It is a centre of expertise for all matters relating to credit management in Malta. MACM offers a range of services to the local creditors, including, credit management information systems, credit management education, training, conferences, seminars, and lobbying activities. It is the ICM (UK) accredited Training Centre for Malta. MACM is a member of the Federation of European Credit Management Associations – FECMA. MACM is the distributor of Graydon International Credit Reports in Malta. Trade credit is the oil that keeps the wheel turning. ‘Buy now - Pay later’ encourages more sales as it allows time for the buyer to add value or service to the goods and resell the product before paying for the supplies. It may also serve as a means of short-term finance to the buyers. This makes credit not only a valuable commercial factor but also significant throughout the supply chain. One of the main challenges in today’s business world is surely the high level of competition. Businesses are striving to satisfy the needs and expectations of their customers in order to gain and sustain competitive advantage in their respective markets. And selling on credit is one of the most effective tools to maintain market share. But money costs money! Granting credit does not come for free and it also carries an element of risk. Selling on credit entails the supplier to invest money in its customers and should be ready to take the risk of being paid late or not paid at all. Nevertheless, there is nothing wrong with trade credit as long as it is well evaluated, analysed and responsibly granted according to the specific risks involved. 28 |

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To minimise the risks involved in credit, it should only be granted against a clearly written document duly signed by both parties – the suppler and the customer. This document, commonly referred to as the Credit Application Form, should include not only the conditions of sale but also the payment terms as agreed by both parties. A credit application form also serves as a contract of sale between the supplier and the customer and a basis to analyse the credit worthiness of the prospective customer. A sample of a credit application form is available from MACM through its website www.macm.org.mt Customers buying on credit should never perceive the credit application form as bureaucratic, intrusive or officious in any way and should cooperate wholeheartedly with their suppliers when served with such document. Completing and signing a credit application document upon a trade credit request would ensure sound cash flow and secure long-term profit for both parties. Therefore, the Credit Application Form should be perceived as an informative tool for the customer buying on credit. Customers are made aware of the payment terms agreed with the suppliers; interest and charges which may apply in case of late payment; discounts for early payments; and retention of title, if applicable. These agreed conditions and terms should be clearly stated in the credit agreement document. Additionally, a written credit agreement, duly signed by the two parties, would help to build and maintain long-term business relationship

since it would prevent future disputes. If a credit sale transaction lacks clear and written payment terms, what evidence of the agreed credit terms would there be if any dispute arises in the future? It would be a case of the supplier’s word against the customer’s! These undesirable circumstances would harm the business relationship between the two parties and both parties would lose business and money, especially if legal proceedings would be necessary. Good credit management practices suggest suppliers to use effective and reliable sources of information which assist them in their analysis of the creditworthiness of their customers prior to granting them credit and also in monitoring their existing credit customers on an on-going process. These sources of information are valuable as they help suppliers to take proactive actions if and when necessary. Knowing your customer is the key that opens the door to business success and this theory particularly applies when selling on credit. Credit sales should result in better profit to the supplier but it can only happen if good credit management practices are followed and good customer relationship is built and sustained through proper agreements between parties. “Patti Chiari, Amicizie Lunghe” as the Italian saying goes. TEU

Editor’s Note Josef Busuttil is Director General of MACM – Malta Association of Credit Management and Vice President of FECMA – Federation of European Credit Management Associations. Josef lectures Credit Management and Business Studies at MACM Training Centre - The accredited Teaching Centre of The Institute of Credit Management (UK) for Malta. He conducts in-house training for companies and has also contributed to a number of business workshops, seminars and leading conferences organised by different organisations in a number of cities around the World, including Antwerp, Bucharest, Dubai, Dublin, Johannesburg, London, Madrid, Malta, Mexico City, Paris, and Vilnius. Josef is a regular contributor of business articles to local and foreign business press.

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INDUSTRY

We Serve You Better

by Mark Vassallo

Aluserv Ltd has been in the production of aluminium apertures since May 1991. Over the past years it has grown to be one of Malta’s leading aluminium window manufacturers with a work force of over ninety-five employees. For the past few years the production has been of ten thousand square meters of apertures consuming no less than one hundred and fifty tonnes of aluminium profiles per annum. Situated in Mriehel industrial estate, with a production floor of 3,500 square meters, the company has built a reputation as a supplier of high standard apertures, with an impeccable after sales service. This is all backed with state of the art “cnc” machinery, a fleet of vans and most of all, experienced personnel. All aluminium, accessories and glass are acquired from Italian companies “the Servgroup Team will never stop its collective endeavours towards being the pioneers in offering new and better aperture systems, of a higher standard than the present”

who are ISO certified. Aluserv is ISO certified and production is based on ISO 9001/2008 quality management standards. The company’s policy is that no order is too small or too big. During 2005, Aluserv Ltd started the production of Solid Timber Apertures. This production is possible due to the employment of Master Joiners who have vast experience in the sector. The 500 square meter factory is also situated in Mriehel

Industrial Estate and has modern woodworking machinery, keeping in with Aluserv’s administration policy of “Quality Products”. Due to a high demand from clients for a full service of apertures in any material, it was decided to introduce the production of Iron and Stainless Steel Apertures in 2007. This has been a success beyond the directors’ aspirations due to the quality and fast service being offered. To date, Aluserv Ltd has diversified with so many products it was decided to launch the Servgroup Brand. This rebranding was carried out in 2010 and today clients can avail themselves by getting the whole service be it Aluminium, Steel, Wood or PVC. After almost 16 years with the factory in Mriehel Industrial Estate, another era will start in the beginning of 2014, when the group will be moving to a bigger factory, situated in the Corradino Industrial Estate. All productions will be under one roof thus increasing optimization of works considerably. The company’s mission statement is “the Servgroup Team will never stop its collective endeavours towards being the pioneers in offering new and better aperture systems, of a higher standard than the present, at the lowest possible price, with an unrivalled after-sales service to the local market and beyond” For further details visit the Servgroup website www.servgroupmalta.com or showroom in Triq In- Negozju, Mriehel Industrial Estate. TEU

Editor’s Note Mark Vassallo, Founder and Managing Director at Servgroup Ltd. He has been in the aperture manufacturing sector, both locally and in North Africa, for almost 30 years, establishing the Servgroup brand as leader in Quality and Excellent Service.

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IT Education business advisory

Online Presence – Beyond Social Media By Robert Farrugia

Online Presence is a subject that is repeatedly hitting the boardroom across all industries. Organisations have realised that Online Presence can have a direct and positive impact on revenue, reputation and quality of service, when applied appropriately. Online Presence is a subject that is repeatedly hitting the boardroom across all industries. Organisations have realised that Online Presence can have a direct and positive impact on revenue, reputation and quality of service, when applied appropriately. Effective Online Presence is about the fusion of web, social media, mobile and apps, with appropriate presence management and robust and flexible IT. The use of such online tools needs to be within the context and in alignment with an organisation’s vision and strategy. Finding the right strategic balance on what and how to use the variety of online tools that are available, is critical. Regrettably, in the last few years the advancements of social media platforms has shadowed the importance of websites. However, a well constructed website can be more effective than social media at influencing consumer decisions. While such a statement might sound absurd in today’s social virtual world, research has shown that while social media is widely used to research products and services, a company’s website has greater influence in purchase decisions than the company’s social media presence. In a global survey carried out by KPMG1, a third of respondents admitted that they were influenced in their purchase decisions by social media ‘fan pages’, while almost half said they look to company websites instead. This can likely be attributed to consumers wanting to see the products and the technical specifications which are typically found on a company’s website rather than on its fan pages, which are predominantly used for brand building. This heightens the importance of building websites on functionality rather than just appearance; Otherwise businesses run the risk of losing potential customers online. If an online user hasn’t seen something that grabs their attention within eight to 10 seconds 32 |

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of visiting a webpage, they leave. Businesses overcrowding websites with content and complicated technical bells and whistles are shutting out potential customers. Businesses could better use websites to attract and engage online customers. This could be achieved in the following five ways: “a well constructed website can be more effective than social media at influencing consumer decisions”

1 Keep it simple – the trick here is to keep your website as simple as possible. Website owners should avoid cluttered screens, long-scrolling pages and slabs of text. If a website user can’t find what they’re looking for straight away because of overwhelming content, they will leave. Flashing signs and advertisements will also deter them and force them to click elsewhere. 2 Understand your online customers - Online customers have choices on the Internet – they don’t care about the vision of your business nor do they follow instructions carefully. They are impatient and want relevant content immediately. Therefore, it is crucial to find out what Customers want in order to present content that suits them and your business. Be sure to engage them to create a dialogue. 3 Make it easy - The key message here is to make it easy for people to do business with you online. For instance, make important features easy to see and use. Provide easily accessible online forms, searchable catalogues and booking forms and offer safe credit card facilities. Above all, guide your website visitors through any process so it is as manageable as possible. Any feature that requires users to think too much or click too far with no perceivable end to it will put them off. Functionality wins over form every time.

4 Google ranking - it is valuable for any business to have a top search engine placement and high ranking in Google to best attract customers. Online visitors are more likely to discover your website through a link in Google search. More often than not, this won’t be your homepage but a link to one of the pages on your website. Therefore, treat every page on your website as a homepage. 5 Find ways to make your website save you time and money - business owners could potentially save time and money by making more effective use of their website. Get website visitors to fill in forms online and allow them to order, book and download information online. You could also reduce phone and face-to-face contact enquiries and the length of each contact by providing the right information on your website. KPMG Malta has recently introduced a new service line whereby the online presence of an organisation is assessed; with a view to help organisations make the best use of the online tools at their disposal. Such an assessment helps organisations enhance their customers’ experience - the result of which often translates to gaining a competitive advantage. In tandem, such an exercise also helps organisations yield benefits which are clearly unattainable without an adequate online presence strategy. TEU

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Editor’s Note Robert Farrugia is a manager within KPMG’s IT advisory team in Malta, specialising in information security and IT assurance.

Assurence NEWSMAKERS and tAX

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The new Jazz proves that small cars can still deliver exceptional driving pleasure even during long distances. When the highway demands acceleration, simply press the pedal and Honda’s new, spirited i-VTEC engine, (100ps 1.4 i-VTEC), responds with instant exhilaration. The Jazz helps avoid any accidents by keeping you in constant control with clear visibility, responsive acceleration, agile handling and outstanding braking performance. Honda’s Anti-lock Braking System, brake assist and a high-mounted back brake light further contribute to overall safety. In the event of an accident, advanced safety features and solid body construction based on Honda’s G-Force Control technology, help protect you and your passengers. So there’s no doubt that in the new Honda Jazz, you’ll always have total peace of mind.

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August 2013 | THE ECONOMIC UPDATE

| 33

Opinion

Realising Competitive ICT Advantage Through Proactive Legislation By Antonio Ghio

Ensuring that Malta remains a leader in the pack when it comes to the Digital Economy takes more than just developing attractive corporate and tax related incentives or establishing the right structures to produce sufficient human capital that investors opting for Malta would require. Legal certainty, through proactive and forward looking regulation is essential. This should not simply come as a reaction reflex and being efficiently rapid in the transposition of rules emanating from Brussels. The State should strive to promulgate and promote endemic legislation which truly reflects our national aspirations and highlights the advantages that Malta can indeed offer as an ICT centre of excellence. Being competitive in the constantly changing ICT environment also depends on a countryâ&#x20AC;&#x2122;s legislative edge and maintaining your regulatory regime open to innovation and at the same time pragmatic and devoid of excessive bureaucratic burdens. The incredible progress that Malta registered in the field of ICT policy during the past decade enabled us to be recognised at an international level in various fora and served as the backdrop for the increasing forward direct investment achieved in relation to ICT. The ever-increasing number of remote gaming companies, technology driven financial services companies as well as other operators directly involved in information technology services is a proud testament to this. This sound success was not only achieved through strategic and forward looking government policy but also through the introduction of legal regimes which mirror our national realities and aspirations. Throughout the past years, Malta has established itself as a true example of proactive and innovative ICT legislation but much more needs to be achieved in order to guarantee further growth of the industry. One of the first purely local interventions in our regulatory frameworks mirroring this legislative pro-activeness was the introduction of obligations of providers 34 |

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of international bandwidth to have arrangements in place with their competitors in order to bind them to accept to carry on an interim basis international traffic originating from their competitors should the letter develop a fault on their submarine cables. The high dependency that our tiny island has on international bandwidth, especially in the field of remote gaming and financial services as well as the faults that were being reported on such submarine cables as a direct result of the voluminous sea traffic passing between Malta and Sicily were the main instigators of this legislative intervention. The introduction by the communications regulator of specific test and trial frequency licencing schemes aimed at alluring companieswho wish to carry out further research and limited trials of new technologies has also borne fruit. The incredible progress that Malta registered in the field of ICT policy during the past decade enabled us to be recognised at an international level in various fora Malta was the first EU country to regulate remote gaming. This enabled us to quickly establish ourselves on the ICT map of this exciting and expanding niche industry. The influx of foreign companies and the establishment of foreign backed start-ups relating to gaming has been phenomenal and even though presently the market is going through a phase of consolidation where the big players are constantly taking control of smaller operators the gaming authority is still receiving interest for new licences and new business models. The availability of

advantageous corporate structures and the increasing number of tax related incentives directly tailored to the creative industry has also made this possible. The importance of regulatory and legislative intervention should never be underestimated. It is also through technology neutral and clear legal frameworks that foreign investors will obtain sufficient piece of mind that Malta is the place to be. Malta must remain competitive and a step ahead. Serious consideration must be now given to the recognition of present technologies and how legislation can leverage accelerated economic growth and sustain FDI in information technology related industries and services. The introduction of specific regulatory and authorisation schemes relating to cloud computing services should be on top of the agenda. Whilst the European Union has only recently started mulling on the various legal challenges that cloud computing presents, Malta has the golden opportunity to be an important actor and lead the way as it did in relation to remote gaming through the strategic introduction of legal models by which the protection of cloud users is recognised as well as setting the stage for the attraction of cloud computing services operators to Malta. Furthermore, the introduction of legislation relating to skills gaming, an increasingly growing and lucrative industry should not be left on the back burner. In the field of ICT law, every day lost means that other jurisdictions will not only catch up with us more quickly but enable them to position themselves in a situation where their national packages are more attractive and resulting in having the

Opinion

Serious consideration must be now given to the recognition of present technologies and how legislation can leverage accelerated economic growth and sustain FDI in information technology

largest multinational players in this field opting to set up shop elsewhere. Needless to say, the State must be the primary driver for this realisation. One bold step in this direction was the publication of the Digital Rights White Paper late last year. Whilst the White Paper proposed the introduction of a number of digital civil rights in our own Constitution, such as the right to informational self-determination, infrastructure and information access rights to our citizens, it also catered for the recognition that the availability and ability of electronic communication networks to business enterprises established in Malta should be protected and promoted by the State. In fact, Article 20(A)(3) of the White Paper proposed that the State should recognise,

promote and protect the ability of enterprises to access and use services and applications as well as share and impart information through information and communication technologies including electronic communications networks to realise their economic potential and shall take such appropriate measures to eliminate any unnecessary restrictions thereto that are unjustifiable in a democratic society. But the enactment of these enterprise specific rights into our laws would be merely setting the agenda. Clear and specific subsidiary legislation would be required in order to reflect and transpose such principles into concrete negative and positive obligations on the State. I remainhopeful that the present administration will recognise and actively embrace the importance of the

concepts presented in the White Paper and ensure that, irrespective of the change in government, Malta keeps focused on the charted course that will enable our country to be a true centre of excellence when it comes to ICT development. Resting on the laurels of our past achievements is no option in the fast paced environment of the technological world we live in. Dr. Ghio is a partner at Fenech & Fenech Advocates specialising in ICT Law (www. fenechlaw.com). He lectures ICT Law and Cybercrime at the University of Malta and is the former Chairman of the Malta Communications Authority and former EU Digital Champion for Malta. email: antonio. ghio@fenlex.com TEU

August 2013 | THE ECONOMIC UPDATE

| 35

RENEWABLE ENERGY

Hydrogen fuel cells and ethanol

By Martina Urso

Introduction Within the course of recent decades, scientists are considering the application of alternative energy sources to save the actual capacity of energy. This is done in a reasonable economic and environmentally friendly manner to face many global challenges related to the rising consumption of global resources. Alternative energy sources are not based on splitting of atoms or burning of fossil fuels. This approach actually excludes otherwise atmospheric pollution from nuclear waste byproducts and burning fossil fuels. Hence, the alternatives that produce less significant impact on the environment include: solar energy, wind power, geothermal and hydroelectric resources. In particular, this argumentative essay concerns hydrogen fuel cells and ethanol (as Americaâ&#x20AC;&#x2122;s next alternative fuel) and discusses the advantages and disadvantages of hydrogen fuel cells. General discussion 1. Hydrogen fuel cells The well-developed economies like the US consider hydrogen as a source of great environmental potential since this clean energy fuel significantly reduces economic dependence on imported energy sources. Therefore, the US deems hydrogen as the future alternative to gasoline; however the issue requires a lot of effort. Initially, the main issue on the agenda concerns facilities needed to make, store and move hydrogen. Furthermore, economical fuel cells, appropriate technologies, innovative solutions and ecooriented educational programs are the key prerequisites of the coming transformational process in the USA. At present, the US produces more than 9 million metric tonnes of hydrogen, which is enough to power up to eight million households or 30 m. vehicles. However, for the time being, hydrogen is mostly applied for the industrial purposes, including metallurgy, refining, and food-processing. The overwhelming majority of overall amount of hydrogen production covers only three states: Louisiana, California, and Texas. The primary user of hydrogen as an energy fuel is NASA within the framework of its space program. Specifically, fuel cells (hydrogen batteries) are applied to power electrical systems of the shuttle. Hydrogen fuel cells are used as efficient means to make electricity. However, the construction of such 36 |

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large batteries (which application excludes power lines) is still expensive to build, whereas smaller fuel cells are actively applied to power electric cars. Alternatively, fuel cells are also actively applied as emergency power sources in hospitals and remote locations. In addition, portable fuel cells are available to power laptops, cell phones, and military devices. About 500 vehicles (automobiles and buses) in the USA are hydrogen-fueled. Electric motors that use using a fuel cells store hydrogen gas and convert the hydrogen into electricity for the motor. Such vehicles are deemed as exclusively eco-friendly since they do not pollute the surrounding environment. The issue high on the forthcoming agenda concerns the construction of re-fuelling stations available to power hydrogen cars (Energy Information Administration, 2008). 2. Ethanol Ethanol fuel is widely applied as a biofuel alternative to gasoline used in vehicles. Ethanol is easily manufactured and processed made from ordinary crops, including corn and sugar cane. Further main advantage is that ethanol is a renewable resource and can be used immensely. Most US cars therefore apply gasoline-ethanol blends reducing the levels of hazardous emissions in the atmosphere Conclusion (Goettemoeller and Goettemoeller, 2007). Furthermore, bio-ethanol is manufactured Overall, for the time being, saving energy mainly to replace fossil fuels in vehicles. and cutting emissions are two primary Concerns relate to the large amount of arable concerns challenged by the developed land required for crops, as well as the energy economies considering the overall call for and pollution balance of the whole cycle of the sustainable development in the world. ethanol production. To this end, International Therefore the US is considering hydrogen Energy Agency states that cellulosic ethanol and ethanol as effective alternative energy fuels will have enormous economic and sources in the foreseeable future. TEU

ecological effect in the foreseeable future. At that, cellulosic ethanol actively resists cellulose fibers, and widely applied to generate ethanol in the United States (The Worldwatch Institute, 2007).

Sources: Energy Information Administration, 2008, Hydrogen Energy, (4 pages) 15 Nov, 2008

However, the widest application of ethanol is fuel additive and motor fuel. Namely, ethanol produced in Brazil is featured by high carbon sequestration capabilities, and therefore climate change is combated. For the time being, there is no 100% pure ethanols approved as a motor vehicle fuel in the US. Ethanol is therefore used as an additive to gasoline to reduce ground-level ozone formation through reducing hydrocarbon emissions and volatile organic compound, carcinogenic benzene and particulate matter emissions.

Goettemoeller, J., & Goettemoeller, A (2007), Sustainable Ethanol: Biofuels, Biorefineries,

http://www.eia.doe.gov/kids/energyfacts/ sources/IntermediateHydrogen.html

Cellulosic Biomass, Flex-Fuel Vehicles, and Sustainable Farming for Energy Independence, Praire Oak Publishing, Maryville, Missouri, The Worldwatch Institute (2007), Biofuels for Transport: Global Potential and Implications for Energy and Agriculture, Earthscan Publications Ltd., London, U.K., http:// www.eia.doe.gov/kids/energyfacts/sources/ IntermediateHydrogen.html

MICE

Shaping the Future of Financial Services in Malta: Delivering in by Giles Schembri, Partner at KPMG in Malta

The financial services sector in Malta is one of the main pillars of the Maltese economy and continues to display resilience, despite the events that took place in recent years and months, as the International Monetary Fund (IMF) also recently pointed out in its report on Malta. Indeed despite the economic turbulence in many countries, the financial services sector in Malta has seen year-on-year growth, from 6.4% of Gross Value Added in 2009 up to 8.9% in 2012. In its recent report on Malta, the IMF has warned that the growth outlook is vulnerable to external and fiscal risks and it has encouraged the Maltese authorities to continue to pursue prudent policies and deepen structural reforms. A lot has changed since our last Biennial Financial Services Conference held in November 2011 entitled “Maintaining the Vision – Driving Value from Change”. The financial services sector globally and in Malta is being subject to more regulation and will also invariably be subject to abide to more stringent rules of conduct. Against this backdrop however, Malta needs to shape further its financial services industry to ensure that, while continued growth in this sector continues to be achieved, this sector is well placed to compete with other financial services centres within the EU in the short term and more importantly by the start of the next decade – 2020. KPMG in Malta will be holding its Biennial financial services conference. The conference will delve into the developments that are taking place within the local and international spheres and will seek to identify key action points that need to be addressed as of now in order to secure the crucial role that this

industry plays in Malta, not only at the present moment but also in 2020. It is against this backdrop that we have selected our panel of international and local renowned speakers to inaugurate the conference including Mr Bill Michael, KPMG’s Head of Financial Services - EMA, the Hon. Prof. Edward Scicluna, Minister of Finance, Prof. Joseph Bannister, Chairman of the MFSA and Prof. Josef Bonnici, Governor of the Central Bank of Malta, shall feature as our opening panel of speakers. While no one can predict the future, the opening plenary session shall aim to discuss where we are today, what shape the financial services sector may take in the next decade, how we might get there and the key drivers of change. Through dedicated break-out sessions, the conference will seek to address the salient topics in the area of Mergers and Acquisitions, some key IFRSs that are pertinent to the financial services sector and Anti-Money Laundering, with a particular spotlight on the upcoming challenges for the next decade as well as addressing ways in which the industry can prepare itself to rise up to these tests. Next, the focus will turn towards the burning priorities for the Banking, Insurance, Investment Services and Funds sectors. The conference will be brought to a close by Hon. Dr. Joseph Muscat, Prime Minister and Hon. Dr Simon Busuttil, Leader of the Opposition. Reflecting upon the substantial changes that have taken place during the last decade, the aim of the conference is to bring to the fore the changes that the financial services sector in Malta should gear up to in order to sustain its competitive advantage in this space. TEU

Editor’s Note Giles is a partner at KPMG in Malta. Over the past eighteen years he has principally practised within the Firm’s audit function and forms part of the Firm’s PPC (area specialist).

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About the conference This one-day conference will take place on Tuesday 26 November 2013 at the Hilton Hotel – Conference Centre, St. Julians. For further information on the conference or to be included in our mailing list, kindly contact us on +356 2563 1053 or conferences@kpmg.com.mt.

MICE

“You don’t have to be great to start, but you have to start to be great” It is clear that these words are what Plethora Dance live and work by. Plethora Dance strives to bring individuals and communities together using public performances, adult dance classes, dance retreats and FlexiFit classes both in a professional and community context. Plethora Dance also offers half day, day and weekend workshops for office-based workers to improve fitness and demonstrate office-based exercises. Dance professionals working with company management, community workers and carers provide a great dance experience regardless of age, fitness and physical limitations. Plethora Dance are experienced in organizing tailor-made dance and exercise classes for individuals and groups of friends and colleagues both as a fun social activity and as a team building exercise. Why FlexiFit? FlexiFit classes are the perfect opportunity to help you feel better, work better and play better.

Packed with simple effective exercises, FlexiFit leaves you feeling refreshed and supple, even days after class. FlexiFit’s dance based exercises gives you the ability to move at ease and perform everyday activities and tasks, pain free. Classes are led by Sarah Lanzon MRBSoc, a UK trained professional dancer. She has a vast experience working with adults and elderly patients adapting exercises for rehabilitation and body strengthening. She has worked extensively in London and around the UK, including leading regular dance exercise class with Parkinson’s UK.

When contacting Plethora Dance you’ll be dealing direct with our dance team, meaning you get first class service communicating ideas with the people who can make it happen.

Scheduled FlexiFit classes run for 75 minutes both mornings and evenings and are limited to 8 people per class, with individual attention and personalized care.

Plethora Dance is a bespoke dance company, so a new piece of dance is tailor-made specifically for your event. Using only the finest dance talent we bring perfection, precision, style and quality.

Plethora Dance can cater for all themes, settings and situations - corporate events, conferences, fashion Plethora Dance also specialises in creating shows, product launches, TV adverts and many more. new and exciting dance pieces for corporate For more information contact us on 99490896, or by email on events and high profile product launches to plethoradance@gmail.com. Like us on Facebook: www.facebook. com/PlethoraDance. www.danceclassesmalta.com create an impact. Plethora Dance for Corporate Events

July 2013 | THE ECONOMIC UPDATE

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NEWSMAKERS

Motherwell Bridge delivers, erects 36 cranes at Barcelona container terminal Motherwell Bridge entrusted with new major project in the United Arab Emirates Motherwell Bridge has completed the delivery of 36 automatic stacking cranes to Barcelona container terminal ahead of schedule. The structures, which add significant value to the terminal’s capabilities and infrastructure, embrace next-generation technology allowing for efficient container handling in some of the busiest ports in the world. The ASCs were erected by a team of 17 of Motherwell Bridge’s highly specialised mechanical and electrical technicians who were based in Spain for the 18-month project. Following the expediency of the Barcelona order, Motherwell Bridge has been entrusted with another major project in the United Arab Emirates, involving the mechanical erection, electrical installation and commissioning of ASCs. In the last few days, a team of 24 from the Hal Far engineering company oversaw the erection of a fourth automatic stacking crane in the United Arab Emirates. In total, 12 cranes will be erected at the major upcoming container terminal in the region. “Motherwell Bridge has been contracted to carry out site erection and maintenance of port-handling equipment since 2005,” Motherwell Bridge managing director Tony Mallia said. “We have consistently met our clients’ stringent standards and deadlines. Motherwell Bridge’s excellent track record has led to significant repeat business and we have put our name to major projects at key container terminals in Europe and the Middle East.”Electrical and mechanical maintenance services of port handling equipment and related maintenance management are core capabilities at Motherwell Bridge. The company has previously erected 50 rubber tyre gantry cranes to terminals in Malta, 51 to ports in Spain, and two in Oman. Motherwell Bridge is now looking to deliver similar container terminal infrastructure to new clients in Asia. This will see the company deploying specialist teams at sites in various regions simultaneously, Mr Mallia said.

HSBC Malta launches Instant@dvice: free online products to boost trade

Motherwell Bridge’s excellent track record has led the company to put its name to major projects at key container terminals in Europe and the Middle East.

HSBC Malta Commercial Banking launched Instant@dvice, an online Trade and Receivables Finance service that streamlines and enhances import and export procedures at no extra cost, saving traders precious time and money. Instant@dvice keeps exporters and importers up-to-date with the status of trade transactions via prompt e-mail services, offering relevant advice and notifications on the go. This added convenience makes for greater efficiency and is particularly well suited for trade customers who travel frequently. “This is another ‘First in Malta’ product offered by HSBC Malta Trade and Receivables Finance, which, at no extra charge, offers numerous benefits for traders, including seamless tracking of trade documents with the Document Tracker service,” explained HSBC Malta Head of Commercial Banking Michel Cordina. “Other Instant@dvice benefits include enhanced accuracy in document preparation, improved logistics management, and lower document management costs.” Instant@dvice improves efficiency by enabling one’s office to forward non-negotiable copies of export Documentary Credits (DCs) to respective buyers, freight forwarders, insurance providers and other trade partners for their reference or action. Copies of import DCs may also be sent via e-mail immediately upon issuance by HSBC, saving time and communication costs, and allowing the customer to start manufacturing and sourcing processes immediately upon receipt of the relevant DCs.

HSBC Malta launched Instant@dvice, a new Trade and Receivables Finance product to boosts trade for importers and exporters, at no extra charge.

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For more information about Instant@dvice customers may contact their HSBC Relationship Manager.

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MEDIA

Media Analysis By George Carol

TVM news has been confirmed as the most watched new bulletin on local TV. This has been confirmed once again by the Media Warehouse Survey which has just been issued. The Media Warehouse research analysis is a detailed study covering the local media, namely:TV, Radio, Newspapers, and Magazines. Such aspects as frequency of viewership,audience share, type of listeners / viewers/readers, together with many other factors are examined to give a clear picture of the media market. The information is especially relevant when analysed in terms of the demographics of the Maltese population allowing the user to identify any relevant segments in the market. Essentially, the Media Warehouse is an independent study, free from any bias, which ensures an honest and realistic picture of the media industry. It is ideal for all companies which venture into advertising campaigns; for advertising agencies; as well as owners of media companies.

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The Media Warehouse is issued in April, covering the periods December, February and April. The results presented in each of these detailed research reports give a clear picture of the three particular weeks analysed during that period, together with the averaged results put together, to present a more accurate overview of the various media. The research is carried out by means of three surveys spread out over these three months, each covering both Malta and Gozo. The surveys are each carried out over a period of a week, taking random weeks over a selected number of months. Sources very close to the industry informed the author that during 2006 it is estimated that 10.56 million euro (9.89 million in 2002) were spent on newspaper advertising while just under 5 million euro (almost 4 million in 2002) were spent on magazine advertising. Fifty percent of the total national advertising budget is spent on the print media while 39 percent is spent on the broadcast media (Borg, 2009).

NEWSMAKERS

Compunet approved as an IBM Business Partner Compunet, a subsidiary of the 6PM Group, was recently approved as an IBM Business Partner and IBM WarrantyService Provider. IBM is an industry leader that has a rich history of innovation and excellence in informationtechnology. As an approved Warranty Service Provider, Compunet can offer warranty services for the IBM products it sells as well as support for its customers. Compunet is thus responsible, on behalf of IBM, for customer satisfaction. It is IBM’s goal that clients get what they want via the strength of its portfolio and the skills and expertise of its Business Partners. Set up in 1996, Compunet is a fast growing IT Solutions Provider with an emphasis on delivering cost-effective and customerfocussed products and services. Combining years of experience in the IT sector, Compunet hasbecome a leading IT Solutions Provider to both the consumer and corporate segments. During 2011, Compunet became part of the 6PM Group. Today, Compunet offers organisations a multitude of services including Systems Architecture including Linux, Windows and Osx; Networking Consultancy; Storage Systems Consultancy; Server Virtualisation; Virtual Desktop Infrastructure; Systems and Network Monitoring; IT Auditing; Application Hosting; Desktop Support Help Desk; Remote Backup Facilities; Data Centre Consultancy and PCI Compliance Testing. Through its’ consulting and managed services arm, Compunet delivers the resources and capabilities required to assess, design, build and manage an agile, flexible and reliable IT infrastructure that is capable of meeting the dynamic needs of any business. By partnering with top international vendors Compunet can cater for all types of businesses, irrespective of size and cover a range of industry verticals such as Banking, Gaming, Health, Government, Telecoms and the Pharmaceutical industry.

BOV extends its Summer offers Bank of Valletta is extending its Summer offers on Consumer Lending throughout September. Customers will have one more month to benefit from discounted interest rates, no processing fees and an extended loan term of up to 7 years. “We are extending our offers in response to the positive feedback received since their launch in the beginning of Summer. The extension is also in line with the Bank’s drive to continue to consolidate its leadership position in the area of personal finance. The Bank continues to reinforce its market position as a major provider of financing options to Maltese individuals by offering a range of products and providing tailor made solutions to meet individual needs,” said Albert Frendo Chief Officer Credit, Bank of Valletta. Further information may be obtained from the Bank’s website www.bov. com from any BOV branch or by calling BOVs Customer Service Centre on tel. 21312020 between Mondays and Saturdays, from 8am to 8pm ( excluding bank and public holidays).

MIB reaches an agreement with GlobalCapital Insurance Brokers to acquire broking portfolio. As part of its strategy to focus on its core insurance business GlobalCapital plc is exiting the insurance broking market as a result of GlobalCapital Insurance Brokers (GCIB) divesting of its broking portfolio in favour of Mediterranean Insurance Brokers (MIB). This portfolio disposal will allow GlobalCapital to strengthen its market position after announcing its best results in five years at the AGM last month. This key move expands MIB’s portfolio while ensuring uninterrupted service for all GlobalCapital Insurance Broker’s clients. MIB, the renowned independent insurance intermediary, aims to broaden its business through the portfolio acquisition, subject to any necessary regulatory approval, and will be servicing GCIB’s insurance broking clients with effect from 1st October 2013. This portfolio transition secures MIB’s position as market leaders in the local insurance brokerage sector. “We believe this move will prove to be an asset to our customers, as well as extremely positive for GCIB’s existing clients; this will be a seamless move for them,” says MIB’s Rob van Ojian. “In this sector, the bigger you are, the stronger the support you can invest in your clients, with better potential service and insurance cover for your customers.” GlobalCapital plc is continuing to pursue its long-term strategy to meet its value proposition to customers, distribution partners and shareholders. GlobalCapital Life Insurance now enjoys over 7 per cent market share of Malta’s regular premium business and the embedded value of its life insurance business is now well in excess of €13 million signaling a return to operational strength and encouraging prospects for its key life insurance and health insurance businesses. GlobalCapital Group CEO Bashar Khatib said, “We have been in discussions to divest this insurance broking portfolio while seeking to ensure that our insurance broking clients continue to receive the best of service. We are very pleased to have reached agreement with such a respected institution as MIB and are confident that this is in the best interest of our broking clients. We also look forward to further collaboration with MIB in the future. In the insurance sector we are now focused on the organic growth of our life and health insurance divisions and are dedicating significant efforts in this regard. GlobalCapital has in place the people, products, distribution platforms and improved operational efficiency to take this business forward and to create value to our clients, stakeholders and shareholders.” As the independent broking arm of the MIB Insurance Group, MIB has a history of handling Malta’s most complex and extensive insurance programmes by offering the right balance of local expertise and international professional standards and resources. With over 35 years of success and a dedicated team of professionally-qualified insurance experts, the company is renowned for handling all lines of insurance cover, claims administration and Risk Management Consulting, giving its clients the deserved holistic solution in the protection of their assets. “With that in mind, growth has long been a very important feature within MIB’s strategy,” Mr van Oyian continues. “So, when this opportunity presented itself, we were keen to act on it. We believe it will continue to fortify our core market and reinforce our niche offering of tailor-made products for both commercial and corporate clients, as well as highlight our attention to detail across the board.” GlobalCapital Insurance Brokers Limited is licensed to act as an insurance broker and is regulated by the Malta Financial Services Authority. Registered address: GlobalCapital Insurance Brokers Limited, Testaferrata Street, Ta’ Xbiex XBX 1403, Malta. Mediterranean Insurance Brokers (Malta) Ltd. is licensed to act as an Insurance Broker and is regulated by the Malta Financial Services Authority. Registered Address: Mediterranean Insurance Brokers (Malta) Ltd. 53 MIB House, Abate Rigord Street, Ta’ Xbiex XBX 1122, Malta.

August 2013 | THE ECONOMIC UPDATE

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Assurence and tAX NEWSMAKERS

A unique approach to debt collection services in Malta Credit Mediation Services Ltd has officially been nominated as the first official debt collection service company to be affiliated with The Malta Association of Credit Management (MACM) - a members-owned, non-profit making organisation, providing a central national organisation for the promotion and protection of all credit interests pertaining to Maltese businesses. Set up recently, Credit Mediation Services is a modern and forward-thinking debt recovery company with a flair for achieving results. Credit Mediation Services is led by an individual with unparalleled experience in fraud and credit control. The company’s highly-trained team does not apply hard and fast rules for the recovery of debts. Instead it offers its clients tailor-made services to perfectly fit their unique requirements – adopting procedures based on particular business requirements, nuances and budgets. “We are honoured and humbled to be the credit mediation service officially affiliated with MACM,” says Mr. Richard Padovani, Managing Director at Credit Mediation Services, “we pride ourselves at providing a tried-and-tested one-stopshop approach to debt recovery. Our company can manage debt effectively right from that first credit application form all the way through to the final legal process – encompassing mediation, research, debtor chasing, on-the-ground tracking and, if all else fails, comprehensive legal recovery”.

MSV Life p.l.c. donates new carpets to Teatru Manoel MSV Life p.l.c. will be the sole sponsor of new carpets to be installed in the front-of-house and auditorium of Teatru Manoel. This is part of an on-going refurbishment project of the Theatre which has, so far, included the redecoration of the foyer, the VIP room, the staircase, the three tiers as well as each of the doors of the 53 boxes. Specifically designed new chairs for the tier boxes were also installed and the sofas, mirrors and chandeliers were all restored. The new fire retardant carpet, manufactured by Axminster, is being especially woven for the Theatre to match the wellknown green décor of the Manoel and its baroque interior. The new carpet will be installed in the stalls, up both staircases and on the landings of Tiers 1, 2, and 3. MSV Life p.l.c. has funded the total cost of this project. MSV Life p.l.c. (MSV) is the leading provider of life insurance protection, long term savings and retirement planning in Malta. It is also a regular sponsor of sports and cultural events. David Curmi, CEO, stated, “We are supporting Teatru Manoel not only for the essential contribution it makes to the country’s cultural sector but also to help preserve and manage one of the most historic buildings we have”. Teatru Manoel’s CEO, Ray Attard, “We are extremely grateful to MSV Life p.l.c for their support. It is impossible for us to fulfil our artistic obligations as well as our responsibility to maintain such an old and beautiful theatre without external support. The new carpets will be a very visible important addition to the refurbishments which will undoubtedly enhance the Theatre’s appearance and the audiences’ experience”.

Josef Busuttil, Director General at MACM reiterates that “Accounts Receivable or Debtors is one of the largest liquid assets of a business. This entails meticulous analysis and monitoring of the credit worthiness of credit customers, complimented by timely collection of dues. Hence, this affiliation is a step in the right direction to the benefit of all local businesses as it should provide a comprehensive credit service to secure smooth running of the business in an effective and efficient manner.” MSV Life p.l.c. CEO David Curmi presenting the donation to Teatru Manoel CEO Ray Attard

Gozitan business featured on HSBC Group’s Trade Radar

The fourth edition of Trade Radar, an HSBC Group publication on global trade, is available free of charge to HSBC Malta commercial customers, offering fresh insight into global trends and business opportunities. Among the diverse topics covered, including growth opportunities in Mexico, ethical product sourcing and intellectual property protection, this edition includes the success story of a Gozitan business, Magro Brothers, which has expanded its operation globally through its trusted partnership with HSBC Malta. Today, some 55% of Magro Brothers’s €24 million turnover comes from export. “Trade Radar drives international trade by sharing expertise and experiences on global trends, opportunities and threats,” said HSBC Malta Head of Commercial Banking Michel Cordina. “Readers find HSBC’s Trade Radar particularly effective due to its emphasis on actual trade scenarios, the in-depth research and analysis behind its articles and a focus on practical advice born of HSBC’s vast expertise in international trade.”

HSBC Trade Radar featuring Magro Brothers among its insight into global trends, opportunities and threats.

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HSBC business customers are invited to register for a free copy of Trade Radar online at www.hsbc.com.mt/COMMERCIAL/latest-news or by contacting their Relationship Manager

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Shaping the Future of Financial Services in Malta

26 November 2013

KPMG’s Biennial Financial Services Conference

Hilton Hotel Conference Centre St. Julian’s - Malta

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DELIVERING IN

© 2013 KPMG, a Maltese civil partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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