The Business Observer 17th December Issue

INTERVIEW

Issue 41

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December 17, 2015

Distributed with Times of Malta

As it edges closer to full capacity, the Freeport is eyeing land between Birżebbuġa and Ħal Far. Corporation chairman Aaron Farrugia is also keen to get another free trade zone off the ground. see pages 10 and 11>

NEWS A Central Bank of Malta report dispels numerous myths and misconceptions about the impact of foreign workers on the Maltese economy.

Prepare to be enlightened. see page 3 >

Gozo Channel cargo service to use Valletta Gateway Terminals Vanessa Macdonald Gozo Channel’s cargo service will have to start using Valletta’s Gateway Terminal’s facilities in Grand Harbour in the near future – but the chairman is dismayed that this will mean paying extras fees.

Gozo Channel has been using the quay at Sa Maison for its thrice-weekly cargo service, but the area has been earmarked for a marina and the ferry company will have to move from there.

However, the only feasible alternative – given the need for a marshalling area for the heavy trucks and containers, as well as hazardous cargo, is Grand Harbour.

Chairman Joe Cordina made it clear that Ċirkewwa was not an option: “These trucks will not – and should not – be loaded at Ċirkewwa.

The impact on traffic is simply not worth thinking about!

“It is up to the government to decide whether or not to offer a cargo service. But is doing without one really an option? The Public Service Obligation was set up to ensure that this service is provided, no matter what.”

He lamented that they had been left in the dark and with just weeks to go before works start on the marina, he still has no idea what the company is going to do.

“I do not want to commit Gozo Channel to paying to berth if the government will not cover that cost” Mr Cordina is clearly reluctant to pay VGT charges which would erode his efforts to turn the loss-making Gozo Channel back into profits. The annual accounts for 2014 filed last month show that Gozo Channel made a loss of €1.3 million in 2013 and a token profit of €42,633 last year. But based on the results of the first nine months of the year, he anticipates making a profit in 2015 of €500,000. But turning profitable is just the first step in sorting out the financial mess relating to

the purchase of the Ta’ Pinu hoistable deck – let alone thinking ahead to the replacement of the current fleet in 15 years’ time.

Gozo Channel is clearly out on a limb on this: both the Transport Authority and the Transport Ministry referred questions sent by The Business Observer back to Gozo Channel.

Mr Cordina did not beat around the bush: he expects the government to cough up for the extra charges.

“Gozo Channel used to get €5 million from the government to cover its Public Service Obligation. Since 2011, it only gets €720,000.

“We do not know what VGT would cost – there are various figures being mentioned but we have not yet been presented with a specific offer. I do not want to commit Gozo Channel to paying to berth if the government will not cover that cost.

We are discussing it with the government but it clearly has to pay more through the PSO. “That is what a ‘public service obligation’ is. It is there to cover all the extra services provided as a public service whether they are commercially feasible or not, from reduced rates for Gozo residents to Kartanzjan holders, and night trips to cargo services.”

INTERVIEW Andrew Beane has taken over as chief executive officer at HSBC Bank Malta and has already embarked on tackling both the cost and income sides of that all-important ratio. see pages 5 and 6 >

OPINION John Cassar White analyses the factors that will shape the economy in 2016, from geopolitical pressures and global trends to our own home-grown sectors. see page 15 >

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NEWS

Foreign workers paid €103.6m in tax Since EU accession the amount of income tax and national insurance contributions paid by foreign workers increased from €15.3 million to €103.6 million in 2014, according to a report by the Central Bank of Malta which dispels many of the misconceptions about migrant workers.

Whereas in 2000, revenue from foreign workers accounted for just 2.4 per cent of personal income tax and national insurance contributions, by 2014 this share had risen to 10.1 per cent, the report found.

The amount of revenue collected from foreign workers increased by nine times during the period 2000 to 2014, whereas that from Maltese workers doubled.

“Foreign workforce should not be misconstrued as evidence that foreigners are crowding out Maltese workers” Aaron Grech, the head of the Economic Research Department of the CBM, found that foreign workers boosted average annual potential GDP growth by 0.6 percentage points between 2010 and 2014.

The report challenges the impression that foreigners are taking Maltese jobs.

“The rising share of the foreign workforce should not be misconstrued as evidence that foreigners are crowding out Maltese workers.

In fact, the increase in employment for Maltese nationals between 2010 and 2014 was nearly double that in the preceding four-year period.

“The evidence seems to indicate that the rising demand for labour by Maltese industries is too strong to be serviced by the supply of Maltese workers, even when the latter is expanding quite strongly due to a rapid rise in female participation,” the report says. Dependence on migrant workers is quite concentrated,

with half of the entire workforce in entertainment & recreation, professional services & administrative support and in hotels & restaurants.

Dependence on migrant workers amounts to nearly 29 per cent of the entire workforce in entertainment & recreation, 23 per cent in professional services & administrative support and 21 per cent in hotels & restaurants.

Managers and those employed in elementary occupations amount to nearly a third of all foreign workers.

While managerial, professional and technical occupations still dominate the foreign workforce, there has been a very strong growth in the number of foreigners engaged at the lower end of the labour market.

“The probability that a foreign worker is a manager is more than twice the same probability for a Maltese. Similarly, the odds that a foreigner is employed in an elementary occupation are one and a

half times that for the average Maltese. This is in line with the perception that foreign workers are employed at either end of the labour market – the higher end where skills are scarce and the lower end where jobs are no longer that attractive for Maltese workers,” the report said.

“There is evidence that in some sectors foreign employees may have acted as substitutes for local workers, e.g. in construction and hotels & restaurants, but it is harder to decipher whether in the absence of foreign workers, firms would have been able to induce more Maltese workers. In some sectors, like professional & administrative support services and in information & communication, the absence of foreigners could have resulted in too high a shortage of labour, and higher demand would have been very difficult to accommodate by simply raising wages to attract more effort.”

SIX THINGS YOU SHOULD KNOW ■ The proportion of foreign workers has risen from 1.3 per cent of the total workforce in 2000 to 10.1 per cent in 2014.

■ Since 2004, the number of EU nationals working in Malta trebled to nearly 15,600 in 2014; there were also approximately 6,200 thirdcountry nationals working in Malta, four times the amount in 2004.

■ Across the EU, the share of foreign workers ranges from less than 1 per cent in Poland and Hungary to over 50 per cent in Luxembourg.

The eurozone average is eight per cent.

■ In the absence of immigration, the working age population would have shrunk slightly, instead of rising by 3 per cent since EU accession.

■ In the first decade after EU accession 51,500 Maltese turned 16, well below the 56,000 who reached pension age.

■ Contrary to public perception, the recent rise in the foreign workforce in construction is not driven by third-country nationals. The latter had reached a peak of nearly 950 in 2008, but in 2014 were down to close to 760.

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INTERVIEW

New broom at HSBC VANESSA MACDONALD caught up with the new CEO at HSBC Bank Malta, ANDREW BEANE, to see whether he will tweak the bank’s direction taken by his predecessor Mark Watkinson over the past four years.

Your cost-to-income ratio was 55.6 per cent, up from 43.8 per cent in 2011. What can you do to improve this?

We have seen pressure on revenue and cost at the same time.

There has been a permanent structural change to banking – an understandable, post-crisis reaction of governments, regulators and society at large – including the requirement for banks to hold more capital, and regulatory changes which increased the costs of running a bank.

We have seen record low interest rates, which are likely to continue for the foreseeable future, which naturally puts pressure on bank earnings across the board – as well as a reduction in savings’ deposits rates for customers.

I take the view that this is just a change in the operating environment and you simply have to adapt to it. The focus for us is not just on cost but also on revenue – and how to grow the business. We are a systemically important bank so we have to serve society well and responsibly, supporting Maltese individuals and businesses to succeed.

The Maltese economy has done very well and much better than many of the other member states in the eurozone; confidence is high and people are investing.

On the cost side, there are two elements. There is a need to reduce costs as customers use different banking channels and we need to invest in new areas, like compliance.

We do not have a target for the precise cost-to-income ratio that we need to achieve: we need to see positive growth on revenue and some control and management of costs, as well as a perspective of what our capital requirements are going to be. That will give us a sustainable, profitable and safe bank for shareholders and for the country.

We have known for some time that HSBC Group wanted to cut 50,000 staff across the world. Is the early retirement scheme part of this, or one generated by local circumstances?

The structure that group chief executive Stuart Gulliver set out reflects the trends of exciting growth opportunities balanced by structural costs and capital pressures.

Those pressures exist here in Malta as they do in many countries. So what we are doing is absolutely aligned with the group strategy, but it is equally on a standalone basis.

There is no target, no number of staff that we need to reduce. This is very important and I want to be very clear that this is the spirit of a voluntary programme.

It is about reducing costs, not people. Clearly there is a link between them but the focus is cost management. Half our costs at the bank are related to staff – €52 million in 2014.

Most of the customers I met in my first few weeks here are focused on managing costs in a disciplined way. We need to do the same.

“ere is clearly a perception in parts of the community that HSBC is not sufficiently open for business”

Our sources insist that the number is in the region of 400 – which seems very high in view of your headcount!

Being responsible for the programme, I can assure you that there is no number. Of course I have an internal view of what it is likely to be but it is nothing like that. The programme closed last Friday so any numbers are frankly speculative as we have not had the time to go through the applications yet. We have to see who was interested to take it up and consider what cost reduction is possible.

When we do know the numbers, we will be very happy to talk about them.

You say that you want to help customers seeking growth but it is an open secret in Malta that HSBC is very risk averse…

Any bank has its own risk appetite. That is part of running a sustainable business for the long term.

There is clearly a perception in parts of the community that HSBC is not sufficiently open for business. Some of the perception has probably crept in internally and that may have been projected to customers as well.

Our job – and this is our duty to society not just our strategy – is to get out there and facilitate. That does not mean that we can support every loan proposal that comes our way – some will not fit our risk appetite and will not be a good credit decision.

But my broad message is that we want to grow the bank, support the economy and support customers. I had all the senior management team here this week and said this to them very clearly.

HSBC already closed its share shop but has now ceased its selfservice offering. Wasn’t this money for old rope?

HSBC MALTA CEO ANDREW BEANE

To be clear, we are still offering new IPOs and Malta Government Stock. We need to focus on a few things that we can do really well.

We do not think that this business – a very small part of what we do – could be done profitably and effectively.

We need to recognise changes to the regulatory environment. For example, the standards of advice we must give on the provision of sophisticated products are now much higher than they used to be in the past.

I take the point that we provided services in the past that we cannot provide in the future but the substance of our business and all the core products will be provided.

How long before you actually start closing branches?

We will naturally review our comprehensive distribution network from time to time, based on customer preference and demands.

But we do not have a branch closure programme and our business is based on following our customers and meeting their needs. As long as we have customer demand that we can service profitably we will continue to offer them.

There are changes in the way that customers are using branches and many manual transactions have migrated to electronic channels.

Equally we have invested in our wealth management business so we are now using some of that physical space to provide more advisory services.

Continued on page 6

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e Business OBSERVER | December 17, 2015

INTERVIEW

‘We’re having productive discussions’ Continued from page 5 If you think longer term, we can provide better services to customers and have more quality conversations with them about things that are really important to them in their lives, and use our resources to do that rather than transactions that can be done efficiently through other processes.

The collective agreement expired in 2013 and was quite a bone of contention. What is happening now?

Let us start from the principle that the purpose of the bank is to serve customers and businesses. It is the quality of engagement of your people that largely defines the service you can provide.

I recognise that the extended uncertainty that existed around the collective agreement is not the environment in which we would like to run our business.

I am doing my best to sign a collective agreement as soon as possible. That is what I have committed to the staff and that is what I have committed to the union.

I have built a very positive relationship with the Malta Union of Bank Employees and I am working very closely with William Portelli and his team. In any negotiation there can be different perspectives – that is quite healthy – but these need to be handled in the right spirit.

The spirit of the negotiations is positive and we are having good and productive discussions. The core purpose should be to have a competitive and fair, peopleoriented workplace and culture. We will do our best to resolve this in the best interest of our people from a commercial perspective, certainly, but also a fair one.

There were quite a few people who lamented that their career prospects were being blocked by expatriate appointments. Unfortunately the perception is that they were here be-

cause they were no longer needed somewhere else…

I believe very passionately that you have to have a meritocratic culture – in both perception and reality. We are very fortunate to form part of a large global organisation and we should have a relatively small number of highly talented expatriates that bring the best of the group’s expertise here.

I don’t think it is necessarily about expatriates. We only have a dozen or so – and equally we have a number of very talented Maltese colleagues working overseas.

We have to ensure that the culture and career process can support everyone and help them flourish. I have undertaken to publish all the promotions in the bank as from next year, which will help people understand some of the changes taking place.

Similarly, in discussion with MUBE, I published for our staff the full engagement survey that

“I have undertaken to publish all the promotions in the bank as from next year, which will help people understand some of the changes taking place”

we run every two years, which has good things and things that we can do better. The starting point has to be that you are open, honest and transparent, and you should have confidence and trust in that – whether you are in the most junior or most senior position.

I am meeting two to three employees a week on a one-on-one basis at the moment across the enterprise to listen.

You are 36: is that an issue?

I have been fortunate in my career to date to have held a number of senior roles. I was on the executive and risk committees of our parent bank before this and have held other senior positions all over the place.

I think it is an opportunity to bring a new perspective to the executive table. That to me is the essence of diversity – diversity of thought, gender, age and so on. I do have different generational per-

spectives; I intend to use that as a force for good.

I am doing this interview in the Qormi operations centre rather than in Valletta. What is that about?

Symbolism is really important in leadership. It was clear to me that while Valletta remains extremely important for the governance of the bank and engagement with some of our political and most senior customer stakeholders, our team is here.

I needed to be connected to them so we are camping out here four days a week here. It is for others to say, but I hope that it is being received positively and certainly it enables all those informal conversations to take place.

This is an important part of listening which I think is a key tenet of any leadership job. The tendency is always to talk but it is more important to listen.

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e Business OBSERVER | December 17, 2015

INDUSTRY FOCUS

What the 2016 crystal ball reveals It is that time of year when we stop to reflect on the year past and try to anticipate what 2016 will bring. It should be a fairly good year, according to official forecasts.

The government was forecasting a real GDP growth of 4.2 per cent for this year, and of 3.6 per cent for next year. That has to be seen in the context of eurozone real GDP which is forecast to grow by 1.6 per cent in 2015, rising to 1.8 per cent in 2016.

The European Commission is even more optimistic about this year, predicting in its Autumn Forecast that Malta’s economy would grow by a “brisk” 4.3 per cent in 2015, its highest growth rate in the past decade, moderating to 3.6 per cent in 2016.

Clearly, there are what the ECB likes to call “downside risks”, everything from geopolitical tensions to terrorism and epidemic outbreaks.

And let us not underestimate the impact of oil prices, which fell below $40 a barrel recently – the lowest since 2008. The outlook is pessimistic: credit ratings agency Moody’s said recently it had lowered its 2016 Brent crude oil estimate to $43 a barrel from $53.

Oil prices also have an impact on exchange rates and the euro/dollar rate has plunged from 1.233 to 1.09 over 2015.

Julia Chatard, the executive director of forex trader FXDD believes that the strong dollar will prevail.

“The trend of 2015 regarding the strong dollar will continue throughout 2016 in view of the US

“A great deal of political, social and economic developments have been and continue to occur around us.

Like most other years, 2016 will require adaptation”

economy still picking up; that will result in a 1:1 ratio for USD/EUR currency pair closer to the second quarter of 2016,” she said.

How best to cope with all these trends? Financial services

provider Firstbridge gets a glimpse of various sectors through its client portfolio. Managing director Dean Micallef encouraged companies to be dynamic: “A great deal of political, social and

economic developments have been and continue to occur around us. Like most other years, 2016 will require adaptation.

However, with the fast-paced nature of modern business – now more than ever – 2016 is the year to make things happen, the year to put current strategy into action and relevant plans into play.”

Trade finance bank Fimbank has been reinventing itself under a new CEO this year and the group chairman John Grech was upbeat about 2016.

“Next year will see Fimbank growing its presence across its existing product lines and markets, thereby boosting business growth and the financial performance of the Fimbank Group. We believe in the power of trade and its

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INDUSTRY FOCUS / NEWS

critical importance to the functioning of the global economy, and we see our role as that of funding and facilitating its development,” Dr Grech said.

The Climate Change agreement recently reached in Paris will set the green agenda for decades to come. Wasteserv chairman David Borg sees a specific role for next year: “Creating resources from waste will remain at the heart of everything we do in 2016, most notably through a focus on organic waste separation and its treatment as a source of renewable energy.”

Tourism in Malta has been growing steadily too, with a record August and excellent autumn figures. This is being reflected not only in tourists flying to Malta but also in cruise passengers. Stephen Xuereb, the CEO at Valletta Cruise Port, believes that 2016 will be an exciting year.

“We are expected to reach a record number of passenger movements in excess of 700,000.

2016 will see Valletta Cruise Port embark on new developments to prepare for further growth in the future,” he said with enthusiasm.

The impact of technology is being felt in every aspect of our

personal and working lives but that brings its own challenges.

Anthony Lupi, the managing director of Focus Software Solutions, warns that the speed of change puts pressure on the people involved.

“Changes in the IT sector are aimed at improving efficiency, reducing costs, increasing market share and the bottom line. Thankfully, providers of technology are usually fast in providing the right tools for business to keep up. IT staff therefore need to constantly research new technologies, sometimes even in their own free time, in order to contribute positively to the projects at hand and to ultimately deliver a technology that clients can use to their advantage,” he said.

“Although graduates receive the appropriate training when they join an IT company, they must be prepared to contribute in research and realise it’s not an 8-5 job.”

Overall, the mood of businesses is upbeat but the chairman of Malta Enterprises, Mario Vella, had a down-to-earth approach giving it all a long-term perspective: “2016 will be neither the beginning nor the end, but another step forward.”

Cameron’s ‘Brexit’ riddle: Row with Europe or row with Eurosceptics?

William James and Guy Faulconbridge When David Cameron urges European Union leaders today to do a deal to keep Britain in the bloc, he will face a riddle that has haunted Conservative prime ministers for three decades: a row with Europe or a row with Eurosceptics at home?

Cameron’s bid to renegotiate the terms of Britain’s membership of the bloc, ahead of a referendum he has promised by the end of 2017, has hit the rocks over a demand to make working EU migrants wait four years before getting some benefits.

EU partners call that measure impossible while Conservative opponents of membership have pounced on hints that he may drop it as evidence that the renegotiation is a choreographed sham that will end in a fudged deal early next year.

“If the prime minister is not able to persuade the EU nation states to give us the four-year wait on migrant benefits, then it really will be trivial,” Steve Baker, a Conservative lawmaker who is campaigning for a British exit, said.

“My expectation is that by the time we get to February something will be offered which will be presented as a great success, but that it will still be inconsequential.”

Baker said he has 136 Conservative lawmakers on his mailing list, indicating that more than a third of Cameron’s 331-strong parliamentary party may be toying with the idea of a ‘Brexit’.

Senior Conservative Eurosceptics are waiting to see the final results of Cameron’s high wire act before making their views explicit, though Defence Secretary Michael Fallon quipped in October that “We’re all Eurosceptics now”.

Pro-Europeans fear Cameron could edge Britain towards an accidental Brexit if he overplays his hand in talks to appease sceptics in his party and senior Conservatives who are jockeying for a battle to succeed him due before 2020.

A British exit would rock the Union – already shaken by differences over migration and the future of the eurozone – by ripping away its secondlargest economy, one of its top two military powers and by far its richest city, London.

An exit from the EU could also trigger the break-up of the UK by prompting another Scottish independence vote. The $2.9 trillion British economy would face years of uncertain negotiations over the terms of a divorce.

The timing of the referendum is uncertain but Cameron has said he would prefer it as soon as

possible. If he gets a deal in February, as European Council president Donald Tusk has said is possible, the vote could be as early as June.

Opponents of EU membership say that if it took back full sovereignty, Britain could prosper as a global trading centre outside a bloc they say has slipped far behind rivals.

Opinion polls show British voters are evenly split over membership, with a significant number of people who have yet to make up their mind, though perceptions that the EU has failed to deal with the migrant crisis may be turning some towards a Brexit.

“I just don’t think it’s realistic for Britain to carry on with a small fix when the EU is obviously transforming itself in a very dramatic way towards political union” So far his renegotiation has failed to impress Conservative Eurosceptics who believe the leaders of the eurozone must forge a much deeper political union to save the euro.

“I just don’t think it’s realistic for Britain to carry on with a small fix when the EU is so obviously transforming itself in a very dramatic way towards political union,” John Redwood, a Eurosceptic Conservative lawmaker, said of the renegotiation.

Cameron says he will recommend Britain stays in the EU if he gets what he wants but has repeatedly warned that he rules nothing out if he doesn’t – code for campaigning to leave, a step that would make Brexit highly likely.

One cartoon in The Times newspaper showed Cameron trying to smash down an EU door with demands before eventually relenting in exhaustion and then knocking politely with a tray of wine. The door opened. (Reuters)

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e Business OBSERVER | December 17, 2015

INTERVIEW

Freeport to run out of space ‘in a few years’ – chairman Vanessa Macdonald The Freeport is already handling 3.1 million TEUs a year – getting worryingly close to its capacity of 3.5 million – but the chairman of the Freeport Corporation, Aaron Farrugia, is well aware that getting extra space will not be without its controversies.

Apart from objections to the use of the land, reading between the lines of what Dr Farrugia said, there may also be wrangling for the corporation to take control of the free trade zones promised as part of the Industrial Maritime Policy.

Until 2004, the corporation was both operator and regulator of the Freeport part of the site in Birżebbuġa, which now hosts Freeport Terminals, Oiltanking and Medserv. The terminals operation was then privatised and taken over by CMA CGM – for 65 years following a concession extension – leaving the corporation as regulator.

This is why, in spite of the fact that the corporation owns the land there, it was Freeport Terminals

Ltd which recently applied for an extension “on the corporation’s behalf” to the first terminal, which was turned down by Mepa because of its environmental impact.

“We were very fortunate that Maersk and MSC did not pull out of Malta when they merged to form the 2M alliance, especially since our competitor Gioia Tauro is owned by MSC and especially as CMA CGM (the current operators at the terminal) merged with China Shipping Container Lines (the world’s seventh largest shipper) and United Arab Shipping Company (the world’s 18th largest), to form Ocean Three.

“They stayed in Malta because of our position and our reputation but it means we need more space.

Freeport Terminals has a 15-year expansion plan but now one of the main elements – the quay extension – was turned down because there was an environmental problem, and because the Freeport is so close to the Birżebbuġa urban sprawl.”

The space constraint is clearly a source of frustration for Dr Farrugia, who said that all the

“Operators would love to have warehouses here, just six kilometres from the main nautical route from Gibraltar to the Suez Canal”

FREEPORT CORPORATION CHAIRMAN AARON FARRUGIA

current operators want to expand, in addition to which the corporation received requests every day, “not only from locals but also from foreigners – especially China and India” which had to be turned down.

“They would love to have warehouses here, just six kilometres from the main nautical route from Gibraltar to the Suez Canal,” he said.

There are other options. In the long-term, the corporation could reclaim land, as it did for the second terminal, he said, adding that Oiltanking was already actively pursuing this option.

For Freeport Terminals, there is a short-term solution which would almost certainly run into opposi-

tion from environmentalists: the 100,000 sq.m. former Go land, just up the road on the way to Ħal Far would make an ideal container handling facility.

“But I have no idea what the government intends to do with this land,” he admitted.

Dr Farrugia’s vision stretches even further, encompassing the one million sq.m. from the Freeport to Ħal Far, which he believes could be turned into a logistics hub creating up to 1,000 jobs.

“Even though we would be well away from the cliffs, it would mean occupying areas outside the development zone, agricultural land and private property – some of which would need to be

expropriated – and so on. We would have to face the music!” he shrugged.

“But there is a very clear government commitment in the Integrated Maritime Policy.”

Logistics is one of the policy’s five clusters and Dr Farrugia declared himself to be passionate about the doors it could open.

“I truly believe it can take us up a notch or two as a country. Logistics has a lot of potential that we should be tapping. It is not about building warehouses.

“We have over three million TEUs passing through Malta; 96 per cent of them are for transhipment and the shipping lines leave them here for hours or days before

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INTERVIEW

moving the contents to small feeder vessels bound for Mediterranean destinations.

“We can do so much with the contents of the containers, ranging from labelling to repackaging, and certifying of food, especially when North Africa is on our doorstep. Let me give you some examples: halal food certification for Morocco and Algeria which between them have almost 80 million people; and Arabic labelling for companies like Nike and Adidas which only provide it in English-language,” he enthused.

He also suggested using the logistics hub as regional offices and warehouses for big companies, and as an exhibition centre where Asian companies could have machinery and products so European buyers could come here for a demonstration, rather than having to go there.

“People all over Europe order Chinese products and it takes weeks for them to arrive. If they had a hub here, we would dispatch the products from here within hours or days.

“People all over Europe order Chinese products and it takes weeks for them to arrive.

If they had a hub here, we would dispatch the products from here within hours or days”

“In an ideal world, we would be able to take 500,000 sq.m. to encompass all these concepts, but even 150,000 sq.m. would be enough to tap into the first phase.”

However, this opens the question of who would have oversight of the area. The Freeport Act is being reviewed and will become, he said, the Free Trade Zone Act,

making the current corporation the authority – rather than Malta Enterprise which is drawing up the logistics policy. Since Malta Enterprise currently vets applications from investors, why should free trade zones fall under the corporation?

“ME has the right expertise to write the logistics policy and it is doing so in consultation with

other entities. But the moment the policy is there and the moment we have any new land – if we do get it – then we will be the ones who take care of the applications, who would be chosen, where etc,” he said, carefully declining to get drawn into any controversy.

“All I will say is that in a free trade zone, you are not yet in the

Maltese jurisdiction. In places like Singapore and Jebel Ali, there is a free trade zone authority – which in the case of Malta will be us.”

The stretch to Ħal Far is only one of the areas he thinks could be used as a free trade zone.

“We could either expand the current free trade zone or have a second one. What about Gozo?

Some part of Grand Harbour?

Smart City? But let me stress that this is not a leak about actual intentions but my pure speculation.

“You would need to have logistics corridors but, for example, you could link Smart City to the Freeport by tunnel and all the trucks would go through there.

“And we also need to look at links with the airport. There is a daily DHL cargo flight but we are clearly not exploiting the full potential of this.”

The demarcation between the corporation and Transport Malta seems to be as open to arm-wrestling as that with Malta Enterprise. The former regulates import and export tariffs within the Freeport, and the latter in Grand Harbour. Dr Farrugia clearly anticipates that a new free trade zone would fall under the corporation’s remit when it comes to this aspect too.

He pointed out that when the corporation received the Freeport Terminals’ annual tariff revision, it accepted the five per cent increase for imports but persuaded them to reduce that for exports to 3.5 per cent – in the national interest.

“As the regulator, we have repeatedly checked that the operator at the Freeport is investing in new machinery. I cannot comment on Grand Harbour as the situation there is different, but the GRTU has been saying that tariffs there are increasing even though there is no investment being made.

“I think that the system has to be changed once the national logistics policy is set. Both the government and the Opposition are firmly in favour of logistics. But if we are to turn Malta into an international logistics hub, it needs to be addressed – and in a holistic way across all the stakeholders.”

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e Business OBSERVER | December 17, 2015

CASE STUDY

Technology best way to reduce cash/cheque usage Good technology is the best way to encourage people to stop using cash and cheques in favour of more secure and less costly methods of payment, the general manager of Fexserv Financial Services Ltd David Borg Hedley said.

In Malta, 88 per cent of transactions are still done in cash, but he warned that it would be a while until payment systems Apple Pay and Samsung Pay were available in Malta.

“Mobile payments are of great interest. But it will take a long time for these big names to be used for traditional payments.

Apple Pay started in the US but the next country was the UK where there was enough demand to justify the investment – I don’t believe that Malta will be a priority for them for a while!” he said.

Mobile payments may have started out as a technological innovation but they made headway for much more pragmatic reasons: they are used across Africa by people who have little or no access to a banking system. The use of mobile payments grew with mobile penetration: in 2002, only three per cent of people on that continent had mobile phones; last

FEXSERV GENERAL MANAGER DAVID BORG HEDLEY

year, 70 per cent of the population had a mobile phone. Operator 3G Direct Pay estimates that in Kenya alone, mobile money transactions reached $22.4 billion in 2013, with Sudan, Somalia, Tanzania, and South Africa not far behind.

The phones are not only used to pay for goods and services but also to receive remittances, particularly from people who work overseas and are unbanked. The World Bank estimates that the

“Mobile payments are of great interest. But it will take a long time for these big names to be used for traditional payments”

money foreign workers send home to sub-Saharan Africa reached $32.9 billion in 2014.

According to the Employment and Training Corporation, there were 21,740 foreign workers in Malta in 2014 – so there is clearly a market here – but Mr Borg Hedley does not think that the attraction of this technology is limited to those sending money to isolated relatives living far from banks.

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CASE STUDY

“It is very difficult for foreign workers to get a bank account in a new country unless their company intervenes – in spite of the EU’s Payment Account Directive which gives the right to citizens to hold at least one payment account in an EU jurisdiction,” he pointed out.

Reducing the use of cash has benefits for the host country as it creates a regulated channel, cutting down on abuse and exploitation.

Technology alone will not necessarily bring about behavioural change, though. He pointed out that the penetration rate of the Tal-Linja card only rose because paying for each bus trip without one was so much more expensive.

“That is the way to do it – but is there the will to do this in other sectors?” he asked.

Mobile payment solutions are one of the main competitors for principal Western Union Money Transfer, the largest remittance company in the world, for which Fexerv is the local agent. However, the company has never shied away from competition in any of its areas of activities, acknowledging that it took the decision early on in its 20-year history not to compete on price.

“It is more important to offer reliability and security. The payment business is all about trust. It is important to work with the best partners – but they do not come cheap. But this approach paid off: in 2008, during the financial crisis, you had to be sure that your payment processing partner would still be in business the next day!

“Nowadays compliance is our biggest concern, given the reputational risk if you do not do things well or thoroughly. This is why we have five people working on compliance, our biggest department after sales,” Mr Borg Hedley said.

Fexserv, which started out as Fexco two decades ago, started out offering wholesale foreign currency as well as a system allowing importers to pay their overseas suppliers.

“e payment business is all about trust. It is important to work with the best partners – but they do not come cheap

“Back then companies actually had to send somebody to the bank if they wanted to make a payment. We changed that and allowed them to do it from their own offices.

“And then we kept improving and introducing new options, working with the big names in the payment industry, such as correspondent bank Deutsche Bank – the largest payment processor in Europe and one of the top in the world,” he reminisced.

Western Union’s service is offered to a staggering 200 plus countries, through 66 agents in Malta and Gozo: four Fexserv

branches; 36 Maltapost branches; and independent newsagents, travel agencies and pharmacies.

The company was originally formed as a joint venture between Fexco Ireland and Alpine Holdings in Malta. The latter’s tourismrelated activities have now been totally surpassed by the financial services side, and Fexserv now occupies the whole of the refurbished San Ġwann head office. At the beginning of the year, the headcount was 30 and it is now 48 and expected to grow further over the coming months.

The company’s determination to survive through innovation is a

major factor in its success. Take foreign exchange, for example.

Twenty years ago it bought foreign currencies wholesale from hotels and other providers and converted them back to Maltese lira ready for the next day.

Boosted by Fexco’s expertise, it cornered the market by guaranteeing that it would buy back unused currency within a month – so travellers would be able to take as much as they might need – knowing they would not lose out on the exchange rate if they did not spend it all.

Adopting the euro was obviously a hit for the company – Mr

Borg Hedley described it as one of the biggest challenges in its 20year history.

“Our competitors cut back on operations or closed outright but we decided to find a way to stay in this business and actually opened more branches. We looked ahead and realised that travel to exotic countries was growing, so we looked further afield.

“We started to offer 35 currencies, such as Dubai dirhams and Thai baht rather than just the traditional currencies. We also followed what was going on in the airline industry so when Turkish Airlines started operating, we stocked up on Turkish lira and the currencies of other destinations served by the airline.

“Until then, many people would take dollars or euros with them and convert them into local currency when they got there. But it is so much more convenient to have the right money when you get there – and if you use dollars abroad, even though they are accepted in many outlets, the rate will hardly be favourable!” he said.

Fexserv now offers 110 currencies , which is not as easy to manage as one might think, giving exchange rate fluctuations.

“It is not easy, especially with exotics. You need to hold stock and that means there is always a risk that you will lose value. The rate changes every second. But technology has helped our Treasury and made us much more effective and efficient!”

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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every fortnight.

Editorial Vanessa Macdonald, Assistant editor, Times of Malta.

EDITORIAL

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Battle of words over taxation On December 8, there was a brief note in the media about the fact that Malta had managed to include a reference to flexibility into a European Council communiqué on taxation. You would be forgiven for overlooking it, assuming it was just a pedantic attempt to score political points. Think again. It was a major win in a battle that will determine the future for Malta. But it was just a battle, one of many in a war that is ostensibly about the highest principles.

Indeed, that is the problem. All the stakeholders – governments, financial institutions and society itself – realise that we need to insist on the right to transparency, the fight against money laundering and the moral imperative to fight tax avoidance as well as the more obvious tax evasion.

And therein lies the problem: any country which tries to harness attempts by the OECD, the EU or any other body to achieve these three things – while trying to defend its right to determine its own fiscal policy – risks being tarnished either as a tax haven or a pariah state willing to accommodate criminal and terrorist activities.

It may sound like a big leap from defending the sovereignty of taxation to compromising a country’s hard-earned reputation, but in these heightened times of regulation, compliance and information sharing, most countries prefer to lie below the radar.

The European Council’s conclusions tackled two issues: a code of conduct for business taxation, and base erosion and profit shifting.

The latter may be a mouthful but its implications are worrying: Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid, according to the OECD.

“Conservative” OECD estimates indicate annual losses of anywhere from four to 10 per cent of global corporate income tax revenues, i.e. $100-240 billion annually.

The G20 countries also supported the OECD on this, endorsed by the relevant finance ministers in October and then by heads of state in November.

The European Union clearly needed to be seen to be doing something.

It has been looking at bilateral arrangements between conglomerates and member states – so-called tax rulings – such as Fiat Finance and Trade in Luxembourg and Starbucks in the Netherlands, determining that they are illegal. More recently, it took its aim at McDonald’s, prompting Commissioner Margrethe Vestager to comment that “the purpose of double taxation treaties between countries is to avoid double taxation – not to justify double non-taxation”.

Clearly each member state will fight tooth and nail for its competitive tax advantages and clearly each of them will grumble about those of other member states. It was in this context that Finance Minister Edward Scicluna lobbied and threatened and cajoled – not just in Brussels but also here through diplomatic channels – and managed to get those few words inserted, which spell the difference between an irreversible slippery slope towards tax harmonisation, and appearing to be fighting on the right side of good versus evil.

So yes, we can accept “the concept” that profits are subject to “an effective level of tax” but no more.

Labour MEP Alfred Sant said last September in the European Parliament that measures aimed at eliminating tax evasion should not pave the way for tax harmonisation. That is clearly the elephant in the room – and the only way to keep it leashed is by words, fought over one at a time.

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BUSINESS OPINION

A tough year ahead for world economy

John Cassar White It is that time of year when economic and social observers get out their crystal ball to try to forecast what is in store for society in the coming year. In reality no one has the power to forecast accurately what will happen the next day, never mind the next year. But it is an exercise still worth undertaking.

2016 will certainly not see the end of geo-political turmoil at a global level. The strained relations between Turkey and Russia, the growing threat of terrorism in Europe and the flood of refugees from the Middle East and North Africa are major trends that are still evolving. These issues, combined with lack of robust leadership in Europe, are likely to make the coming year another difficult one for European economies.

The refugee problem is perhaps the toughest one to tackle. In 2015, almost one million refugees entered Germany and several thousand went to Italy. Many more made their way to other European countries. Countries like Greece,

Slovenia and Hungary are erecting barriers to stop this inflow.

Countries like Germany, Italy, France and Britain will soon have to assess the huge economic and social cost of integrating millions of refugees already living in these countries so that they can start contributing to economic growth rather than depending on state handouts.

What is more, ordinary people see these millions of refugees, prepared to work for next to nothing, and fear for their jobs. They are being lured by the rhetoric of the far right or left that promises to dismantle the European Union and return to economic patriotism, built on closed borders and excluding all foreigners. Traditional political parties struggle to find a solution to this, the biggest problem since the end of World War II, but fret when looming political elections force them to switch to short-termism.

The EU risks an inevitable decline unless its leaders take the brave decisions needed to keep the common currency on solid ground by promoting fiscal and economic union. We have a deep interest in this issue because our fiscal advantages are a competitive factor helping us to achieve strong economic growth despite all the economic trouble around us. But a common currency cannot be sustained simply by generous monetary policy that distorts the pricing of risk in business planning.

Despite our impressive economic growth we must never be-

“Malta is not exempt from the laws of economic gravity”

come complacent. Our economic and social infrastructure needs huge investment if we are to guarantee a sound future for our children. As international institutions keep telling us, the pensions’ problem persists and we need to do more to encourage people to

save for their retirement rather than spend and hope that the problem will resolve itself.

Our health system also needs huge investment if it is to be sustainable in the long-term. We have thousands of medical and paramedical staff that are doing

their very best to keep the system going despite the shortage of adequate financing. I am a firm believer that free medical health for all is an essential infrastructure for a prosperous and caring society now and in the future.

Our educational system, despite some significant improvements, continues to underperform. We never seem to move on from producing research reports on what is wrong with the system, to defining and implementing a root and branch overhaul to ensure that our society does not continue to marginalise those who are most in need of a helping hand from the state.

We have always suffered from the ‘we are a special case’ syndrome. Malta is not exempt from the laws of economic gravity.

Booms are followed by busts and in an economy with a very small portfolio of economic activities we have to be careful not to place too many eggs in one basket.

Our property market may be booming, but we would be very short-sighted if we were to rely on this boom to last for long.

Similarly, the marketing of our tax efficiency has so far been successful in attracting financial and other services. But can anyone really guarantee that the EU will not someday legislate to close the fiscal loopholes from which we benefit?

Finally, our open economy will only prosper if we are able to sell more goods and services abroad rather than consume more locally. johncassarwhite@yahoo.com

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NEWS

Men control the money in the EU Men dominate central banks, finance ministries and boardrooms throughout Europe with only one in every 25 top jobs held by a woman, according to a new report on equality between women and men.

An in-depth study Gender Equality in Power and Decision-Making by the European Institute for Gender Equality (EIGE), showed that while women occupy onethird of top political roles in the EU, in finance they are much less well-represented.

“The money belongs to all of us,” said EIGE’s director Virginija Langbakk. “Why is it that only men get to decide how it is spent?

It’s like something out of the 19th century!”

The report looks at how men and women are represented in power and decision-making positions in the public, economic and social sectors in all 28 EU member states between 2003 and 2014.

“New study shows women missing from top finance jobs” While progress has been made in many areas, especially in politics, it has been almost non-existent in finance, the report concludes.

Of the 28 central bank governors, only one – of Cyprus – is a woman, and there are only two women finance ministers – from Romania and Sweden. Of the biggest companies publicly listed in the EU, only four per cent have women chief executives.

“Control of the money is still dominated by men,” Langbakk said. “We’ve all become more aware of women’s role in politics and other areas and we’ve made some progress there, but still not in finance. It’s time finance caught up.”

EIGE, the Vilnius-based agency responsible for gathering and spreading information on the progress of equality between women and men in the EU, says the key factor is commitment.

Awareness-raising and legal or voluntary quotas are among the options available to the member states to promote more women to top jobs.

The report concludes that the lack of women in central banking is a result of social structures: persistent male-dominant gender roles and continued gender stereotyping that lead to genderbiased recruitment and promotion procedures.

The report also has positive news. While the number of chief

executives of publicly-listed companies is extremely low, women’s overall representation on corporate boards has gradually increased from nine per cent in 2003 to 20 per cent in 2014, in particular among member states where binding legislation is in effect.

In politics, gender stereotyping still plays a role, with men dominating political portfolios such as defence, justice and foreign policy while women are concentrated in ministries with socio-cultural functions, such as education, health and culture.

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STOCK MARKET REVIEW

How is the Central Bank of Malta faring in QE purchases?

Edward Rizzo In last week’s article I mentioned that at the European Central Bank (ECB) meeting held on December 3, the ECB maintained its Quantitative

Easing (QE) programme at €60 billion per month but extended it by a further six months, from September 2016 to March 2017.

The QE programme, also referred to as the Public Sector Purchase Programme (PSPP), was initially announced to the market by the ECB on January 22, 2015. The programme commenced on March 9.

It is worth recalling that the QE programme is a form of money printing through a process by which national central banks inject cash into an economy by buying government bonds from banks and other holders of such securities including retail investors. The

aim of the QE programme is to ultimately instigate the commercial banks to increase lending to households and businesses, weaken the currency (in this case the euro) and increase exports which should collectively lead to a rise in inflation.

As explained in my article on March 12, 2015, the ‘QE desk’ at the Central Bank of Malta was entrusted with conducting the PSPP in Malta which entails an acquisition of circa €36 million in Malta Government Stocks (MGS) per month.

Following the announcement earlier this month that the ECB extended the QE programme by a

further six months until March 2017, it would be interesting to analyse how the QE desk at the Central Bank of Malta has fared in achieving its objective during the first nine months of the QE programme.

Trades conducted with the ‘QE desk’ are not done via the regular market but through the Over-TheCounter (OTC) market. Moreover, the OTC trades in the ‘QE window’ are not visible on the website of the MSE. Instead, the ECB publishes the aggregate purchases of securities across the eurozone on a weekly basis. Moreover, on a monthly basis, it provides the breakdown of trades across the

different countries within the eurozone. The data published by the ECB as such also includes the information on the amount of Malta Government Stocks purchased by the ‘QE desk’ at the Central Bank of Malta on a monthly basis.

After a very slow start in March with only €5 million worth of MGS acquired, the QE programme in Malta gathered momentum in the following three months and peaked at €85 million in May – way above the monthly target of €36 million.

Having said that, the amount of MGS purchased by the QE desk suffered in the subsequent

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STOCK MARKET REVIEW

months – especially during the past two months. The recent data published by the ECB shows that only €2 million worth of MGS was acquired by the ‘QE desk’ in Malta during the month of November.

In fact, although between April and June the monthly purchases exceeded the allocations by a significant degree, the total amount of QE purchases conducted to date amounting to €275 million is circa €49 million below the amount that ought to have been acquired so far.

So why did the purchases increase so much in the initial four months and why have these subsided in such a significant way in the following five months? There are various factors which may have contributed to this.

As a start, the high activity between April and June is possibly a direct result of the initial surge in MGS prices during the month of April with a subsequent correction in May and June. This is indeed evident from the Rizzo Farrugia MGS index showing significant volatility between March and June 2015.

As explained over the past few months, movements in MGS prices reflect changes in the benchmark German bund yield as well as the yields in the peripheral eurozone countries with similar credit ratings to Malta.

The 10-year German bund yield had slid from 0.546 per cent at the start of the year to a mere 0.05 per cent on April 17 and this was reflected in a corresponding rally across the eurozone’s sovereign bond prices including those in Malta. However, following the decline in yields to almost zero for the 10-year maturity by mid-April 2015, yields suddenly rebounded to 0.8 per cent in early May leading to a sharp downward correction in bond prices.

Market conditions were more subdued during the summer months but the bond market remained particularly volatile from one week to the next, reflecting mixed economic data across the eurozone as well as statements by the ECB and other major central banks.

The influence of communications by the major central banks across financial markets was widely evident earlier this month when yields unexpectedly

“€275m QE purchases to date are circa €49m below the amount that ought to have been acquired so far”

jumped from 0.47 per cent on December 3 to 0.68 per cent after the ECB announcement – one of the biggest one-day moves in a long time.

Despite this volatility from one period to the next, market conditions were generally much calmer during the summer months and despite the reduction in the minimum amount per QE trade to €50,000 nominal, few investors participated in the QE window.

Possibly, the major reason for the decline in QE trades over the past five months is the lack of alternative investment opportunities. As indicated in an article published earlier this year, 35 per cent of all MGS’s are held by individuals with a further 32 per cent by credit institutions (banks). Both these categories of investors are clearly not being offered suitable alternative investments.

From a retail perspective, the amount of corporate bond issuance in 2015 was far less than originally anticipated and this surely led to a lack of participation by retail investors in the ‘QE window’ despite the sizeable capital gains across all MGS. Moreover, whenever a new bond was issued, the extent of oversubscription left many investors disappointed with the level of their allotments.

Likewise, the continued inflow in deposits at credit institutions coupled with much weaker growth in the loan book contributed to heightened levels of liquidity across the main banking institutions.

Given the negative deposit rates at the ECB, banks therefore tended to hold on to their MGS holdings in order to achieve an acceptable return on equity for shareholders.

In view of the difficulty for the Central Bank of Malta to date to source willing sellers in the QE window, it is debatable how they will manage to achieve the monthly target in subsequent months, especially given the six-month extension until March 2017.

The ECB has also reiterated on various occasions and again at its meeting earlier this month that the QE programme may be extended further if inflation fails to approach their target of two per cent by then.

The latest forecasts indicate an inflation rate of only one per cent in 2016 and 1.6 per cent in 2017.

Should the ECB decide to increase the amount of monthly purchases across the eurozone, the Central Bank of Malta would be left in a quandary given the present difficulties to abide by the current level of the PSPP, let alone an additional amount. Although at the December meeting, the ECB

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results.

Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2015 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

broadened the list of eligible securities to include regional and local government bonds, this is not applicable in Malta’s case since no such instruments are issued and tradeable on the Malta Stock Exchange.

The Central Bank would therefore need to come up with other initiatives to instigate holders of MGS to dispose of their securities.

From a retail investor perspective, until such time as the evident sizeable pot of liquidity finds its way into suitable and attractive corporate bonds and new equities offering sustainable dividends, it is unlikely that such investors will participate again to a large extent in the ‘QE window’ unless bond prices are on a clear downward trend, jeopardising the strong capital gains across most MGS. Edward Rizzo is a director at Rizzo, Farrugia & Co (Stockbrokers) Ltd.

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BUSINESS UPDATES

STMM MANAGING DIRECTOR DEBORAH SCHEMBRI

STMM provides pensions solutions and administration services to all international clients STM Malta Trust and Company Management Ltd (STMM) primarily provides pensions solutions and pensions administration services to all international clients.

The company is registered as a Retirement Scheme Administrator with the Malta Financial Services Authority.

It is also authorised to act as trustee or co-trustee to provide fiduciary services in terms of the Trusts and Trustees Act. STMM is part of STM Group plc which is an independent firm listed on the London Stock Exchange, with offices in Gibraltar, Spain, Malta, Cyprus and Jersey.

Over the past years the company registered exceptional growth and performance. This is only possible by focusing on: ■ Senior leadership, governance and societal responsibilities; ■ Strategy development and strategy implementation; ■ Voice of the customer and customer engagement; ■ Measurement, analysis and knowledge management;

■ Workforce environment and workforce engagement; ■ Work processes and reliable operational effectiveness; ■ Reliable and outstanding service to meet our customers’ present and future needs.

Our values are summarised as follows: ■ Integrity: transparent, ethical and clear communication with staff, customers, partners and community; ■ Dignity and respect in all our interactions ■ Development: Our people are the most important asset; ■ Effectiveness: We adapt to the ever-changing and varied business environment so that appropriate relevance is consistently attained.

One should develop strategic objectives and action plans, implement them, change them if circumstances require and measure progress. The above focus leads to positive and outstanding results in the various organisational areas.

For more information visit info.stmgroupplc.com/malta

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BUSINESS UPDATES

KPMG Crimsonwing introduces Microsoft Dynamics CRM 2016 KPMG Crimsonwing announce the launch of the newest version of Microsoft Dynamics CRM: 2016. A solution designed to optimise sales efforts, Microsoft Dynamics CRM enhances efficiency and allows sales professionals to dedicate more time to selling products, shortening sales cycles, improving close rates, and achieving real-time insights.

Microsoft Dynamics 2016 enhances simplicity and therefore efficiency by offering sales, service and marketing professionals the ability to leverage familiar productivity tools by accessing documents across SharePoint, Office 365 Groups and OneDrive for Business and creating customised sales documents in word while engaging in sales, marketing and customer service tasks. Speaking

about this new solution, Stephen Abela, director at KPMG Crimsonwing, said: “Many Maltese businesses across many industries can benefit from the increased efficiency that Microsoft Dynamics CRM 2016 can bring to the table.”

This solution will be available from KPMG Crimsonwing early next year.

For more information, contact salesmt@crimsonwing.com or visit www.crimsonwing.com.

KPMG Crimsonwing is an international business & IT solutions provider that supports organisations in business transformations enabled by technology, focusing on Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), eCommerce and IT integration.

Expat finances: where does the move pay best?

Hong Kong, Qatar, Switzerland and Mexico are the best destinations in their respective region for expats who want to boost their standard of living, according to HSBC’s latest Expat Explorer survey.

The ability to save more, enjoy greater disposable income or acquire real estate assets are all important considerations for expats moving to a new country. Offering expats a regional view of the financial benefits on offer, Expat Explorer reveals the best countries to increase one’s standard of living.

“Managing your finances is a key part of living abroad, whether that is sending money back home, saving for the future or, for long-term expats, getting a foot on the housing ladder,” said Dean Blackburn, head of HSBC Expat.

“As an expat, you often need to navigate these financial issues in not one, but two or more countries. That can be difficult but shouldn’t be impossible – no matter where your expat journey takes you, detailed planning and professional advice can help you to prosper abroad.”

The Expat Explorer survey is commissioned by HSBC Expat and conducted by YouGov. Now in its eighth year, it is the largest and one of the longest running global surveys of expats, with 21,950 respondents sharing their views on different aspects of life abroad, including personal earnings, careers, experience and family.

HSBC’s latest Expat Explorer survey is available at www.expatexplorer.hsbc.com/survey

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BUSINESS UPDATES

Lord Igor Judge presides at St Edward’s College prize day Lord Igor Judge, the Maltese-born former Lord Chief Justice of England and Wales and Head of the Judiciary of England and Wales, presided at the St Edward’s College Middle and Senior School and International IB Sixth Form prize day on November 26.

In a light-hearted address to prize winners, their parents and guests, the Lord Judge, who was at St Edward’s College between 1947 and 1954, reminisced on the days as a boarder soon after the end of World War II when Malta was still recovering from the ravages and scarcity of war. Pointing out the resilience and courage of that generation of Maltese, he emphasised this same trait in the present generation, which is now producing successful economic results.

The Lord Judge told the prizewinners that while they should be proud of their achievements, they should not be pompous about it, reminding them that there will be times when they are not being congratulated and praised. It is in these times that they must remember their school motto, Virtus et Honor, and act accordingly by being civil to those around them, he said.

Grant’s Signature – the whisky introduced for the adventurous drinker Grant’s has introduced Grant’s Signature, a unique blended whisky for the aspiring whisky connoisseur.

Signature was expertly created in the Grant family’s namesake style five generations after William Grant opened his first distillery in 1887 by master blender Brian Kinsman, using some of the finest whiskies Scotland has to offer.

It takes the model of a standard offering to a new level with its rich, malty character and robust flavour profile.

Signature was designed to meet the highest whisky demands and packs a lot of punch, making it the perfect choice for the adventurous drinker.

Grant’s Signature successfully blends the familiar Grant’s smooth house style and quality, with a sophisticated taste, packed full of character.

The complex nose combines hints of vanilla, honey and caramel, with spices lurking in the background to culminate in a rich sweetness with just a touch of dryness from the oak.

A blend of whiskies from a variety of oak barrels, Grant’s Signature is an ideal balance of sharp and creamy flavours for true Scotch fans.

For trade enquiries call 2148 4492, e-mail info@fbs marketing.com, or visit www.fbs marketing.com.