PROPERTY MARKET
Issue 26
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May 21, 2015
Distributed with Times of Malta
Statistics on the property sector are going to be getting a whole lot better soon. see pages 10 and 11 >
NEWS e dairy sector has had more than its fair share of challenges – but it has not only survived but improved. see pages 5 and 17 >
Opposing reviews for shop scheme
PHOTO: DARRIN ZAMMIT LUPI
Vanessa Macdonald A scheme to give Valletta shop tenants stronger title over properties currently leased from the government has received opposing reviews from two business associations in the capital. The Republic Street Business Community Association believes that the option to change from a lease to an emphyteusis will bring
certainty and opportunities for the majority but the Merchants Street Business Association fears it could also have unintended consequences for the minority who sublet from the tenants. The scheme enables tenants of government-owned premises to convert their lease agreement into a 45-year emphyteusis (ċens). It was meant to create a level playing field for shop owners who currently pay dramatically different
rents, ranging from full commercial rates to very low ones that have barely changed over the past 50 years. The scheme updates one introduced by the previous legislation, driven by then minister Jason Azzopardi, which had changed leases from six-month renewable ones to three sets of 15 years each. However, that scheme kept the agreement as a lease, whereas this scheme has changed it to an
emphyteusis model, which gives tenants considerably more rights. Paul Fenech, the president of the Republic Street Business Community Association (RSBCA), said an emphyteusis was basically “ownership but for a set period of time”. For example, it would enable the tenant to use the property as collateral against a loan. An emphyteusis can also be transferred to third parties – although Continued on page 3
NEWS Double glazing at hospitals in the UK has created a problem that a Maltese-listed company is hoping to solve. see page 6 >
STOCK MARKET REVIEW Analyst Edward Rizzo looks at why yields are substantially lower than last year’s. see pages 18 and 19 >
e Business OBSERVER
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NEWS
Minority face uncertainty Continued from page 1 Planning Parliamentary Secretary Michael Falzon stressed that they would not be allowed to do so at “exorbitant rates”. Mr Fenech said that although transfers were allowed in theory under lease agreements, it was so complex that many tenants did not bother. In fact, around 10 of the RSBCA members had applied for the old scheme and most of these are considering applying again under the new scheme, he said. However, the president of the Merchants Street Business Association, Tonio Camilleri, is concerned by two aspects which could affect its 72 members: what will happen to those subletting from tenants without any legal basis; and whether the annual rates will be too high. The new scheme would allow applications from sublessors who have a proper agreement with the actual tenant – but it is not clear what would happen to sublessors whose tenant does not have the right to sublet, or who are subletting without a formal agreement. Mr Falzon said that these irregular sublets would “face consequences” but it is not clear whether the government would see tenant or the sublessor as the guilty party, Mr Camilleri explained. “Ideally, before announcing the scheme, the Lands Department should have investigated all the lease agreements it has, verifying which ones allow subletting if any, and who actually occupies the premises,” he said. “It could then have taken action against the leaseholders who were making money out of their illegal activity to the detriment of the sublessors – some of whom may have been there for years and who may have invested in the premises over the years, while being charged very high rents,” Mr Camilleri said. “Only a handful of sublessors have a contract recognised by the Lands Department. This scheme was meant to provide certainty but in reality it is going to cause havoc!” he said. Another issue is the amount of ground rent, which varies from €500 per square metre a year in the prime commercial areas, to €20 per square metre for shops on the outskirts of the capital.
“e GRTU, on the other hand, is definitely upbeat about the scheme”
“What happens to sublessors now? If the government raises the annual rent – some outlets will now be paying more than outlets at The Point – will the leaseholders still sublet to the current tenants but at an even higher rate? Would they evict them, as it would no longer be worth the trouble of subletting? Who would have right of first refusal, the tenant or the sublessor?” Mr Camilleri asked. Mr Fenech was pragmatic about the issues raised by Mr Camilleri, saying that the important thing was that the scheme was voluntary – and that it would provide clarity for the great majority. “Why shouldn’t premises in Valletta be rented at market rates? The average shop in Valletta is 30 sq m, which would mean a payment of around €15,000, increasing by 10 per cent every five years. Some tenants were paying less than €100 a year. Yes, it will be a shock for them but was that fair? Was it fair on the taxpayers? Was it fair on other outlets who are trying to compete while having to pay market rates?” Mr Fenech said. He did have one question mark though: what would happen to tenants who did not apply for emphyteusis? “If tenants are acting irregularly, then it would not be in their interest to apply for the scheme. What will the government do? Would it eventually raise their rent – in spite of the political unpopularity? Would it simply not renew the lease and ask them to leave? After all, the government has a duty to taxpayers to use its assets fairly,” he said. The GRTU, on the other hand, is definitely upbeat about the scheme. CEO Abigail Mamo said feedback from members was positive. “The new scheme is the result of around two years of discussion with Mr Falzon during which we tried together to improve on the previous Valletta Shop Scheme to make it more appealing to the targeted businesses and increase take-up of the scheme. “A number of the improvements introduced were proposed by GRTU. The main one was the 45year term of emphyteusis which is a significant improvement from the current situation, where most are renewed every six months or one year. This should boost investment in the establishment and provide tenants with the opportunity of accessing funds from banks and using the establishments themselves as collateral. “GRTU also managed to negotiate better rates for a number of zones,” she said, adding that the association was now working with the ministry on the relocation of tenants where needed. The scheme closes in May 2016.
SHOPS AND PROPERTY IN ST JOHN STREET, VALLETTA. PHOTO: DARRIN ZAMMIT LUPI
e Business OBSERVER
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NEWS
Dairy sector facing fresh challenges The €57 million investment in the dairy sector has helped it to survive the changes brought about by EU membership, but it now faces new risks that investment alone might not smooth over. A study by Philip von Brockdorff and Gaetano Buttigieg for the Institute for European Studies, noted that funds will be available for the sector until 2020 through the EU’s Common Agricultural Policy. “However, the possible risks resulting from the removal of the quota system, the new milk production and highly competitive scenario cannot be underestimated,” the study found. Last month, the decades-old quota system for milk production in the EU was removed. The quotas were introduced to keep a lid on production as EU subsidies had contributed to excess production of milk and milk products, with excess produce stored away at huge cost or dumped on world markets with export subsidies.
The authors warned that the removal of the quota system would strengthen the market position of huge retail businesses across the EU – but would whittle away the power of primary producers. The study found that the dairy sector had not only overcome the challenges of accession but had thrived. The average quantity of local milk produced is the highest among the EU10 member states which joined in 2004. Since EU membership milk production increased marginally (2.4 per cent) and its value increased by 36.5 per cent. Average yearly milk production per cow reached 6,472 kilograms in 2013, as compared with 5,261 kilograms in 2003. The 2013 levels are almost comparable with the yield in countries with an equally long tradition in milk production. Equally remarkable is the improvement in raw milk quality with quality levels much better than the EU required standards, particularly fat content which increased from 2.62 to 3.39 per cent.
However, natural and structural disadvantages persist – particularly the total reliance on imported grains and other feed materials, unlike its counterparts in the EU where dairy farmers can source grains produced locally. With EU membership, purchases of grains were liberalised and prices rose 53 per cent between 2003 and 2013.
The Maltese dairy sector is of strategic importance. It generates an annual production of 41,000 tons of fresh milk for dairy processing with retail sales estimated at €38 million. About 50 per cent of the economic activity generated is local value added. From an environment perspective, 59 per cent of agricultural arable land in Malta is used to
produce forage, mainly for the dairy sector. Without the local dairy sector there would be no or very limited alternative use for the land other than urban development, the authors warned. “These natural and structural limitations explain the relevance of support measures... in ensuring Continued on page 17
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e Business OBSERVER
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NEWS
BRIAN ZARB ADAMI (LEFT) AND DAVID VASSALLO PORE OVER THEIR PROTOTYPE HOSPITAL SOLUTIONS.
Local R&D unit solves UK hospital problem It may not be immediately clear why a local IT software company could clinch a major deal because hospitals in the UK are trying to save money... Even when you find out that one of the ways hospitals are doing this is by installing double glazing. 6PM’s new research and development unit director, David Vassallo, was faced with an interesting dilemma facing hospitals which were installing the energy-efficient panes: pagers are linked to transmitters which are installed outside the hospital premises, to reduce radiation. But the signal does not get through the lead in the lining of the double glazing, making the thousands of pagers used throughout NHS hospitals hopelessly inefficient.
The most obvious thing might be for hospitals to dump their pagers and replace them with smartphones. But this is hardly the right solution for an exercise which started with hospitals trying to save money. He and his intern, an engineering student, put their heads together to find a way to use existing pagers – meaning they could be phased out over their lifetime. “We tried to find a way around it and realised that most hospitals now have a Wi-Fi network. We came up with a server which links pagers to the Wi-Fi, which is actually PC-based so it is easier to send messages from than the pager unit. “And it has the benefit of being able to send messages to both pagers and smartphones – so it is
“All we need is a hospital interested in trying it out on a pilot project basis”
future-proof. It is also ‘smart’ enough to recognise whether the recipient has a pager or smartphone, and therefore whether it needs to send a 32-character pager message or a longer version for smartphones,” Vassallo said. The server can also set up multidisciplinary teams – say a crash team for the emergency department – to alert all members simultaneously. “It took us six months but we have now designed the system and shown that it works. A representative from one of the leading paging companies is coming to Malta to see it for himself as it could be the ideal solution for 17 hospitals in the UK... so far,” he said. This is only one of the projects that Mr Vassallo is working on, with the full backing of 6PM’s chief technical officer Brian Zarb Adami. “Since it was launched, 6PM has moved ever more steadily into the healthcare field, focusing on logistics, clinical data and information,” Mr Zarb Adami said. Mr Vassallo’s unit was set up just 18 months ago, and has already worked on two other projects, which are proactive rather than driven by the end-user.
“We visit hospitals and discuss their problems and then try to come up with solutions,” he said. Another product is Ceptr, a tablet-based app which displays a patient’s medical information, rather than the doctor having to ‘pull’ the information – and he or she would also be able to configure it to show the most relevant information for that particular patient. “We also realised that diagnostic machines like MRI scanners and ECGs have internet ports so rather than having the results printed out, scanned and then inputted elsewhere, why not have them connected directly to the central system? It took us eight months to do as there are so many different types of machine and so many different types of record. But now we know it can be done. All we need is a hospital interested in trying it out on a pilot project basis so that we can hand it over to a development team,” Mr Zarb Adami said. “There is a strong business case for this app as very often a patient is not discharged until all their test results are in. Given that a
bed costs £400 a days – and one in intensive care costs £1,000 a day – you immediately realise the business case for being able to discharge a patient as soon as possible, rather than having to wait needlessly for test results. “Not to mention the relief of a patient being discharged as soon as possible and the importance of freeing up the bed for another patient!” 6PM is also working on ways to put its solution into the cloud so that end-users do not have to face the full capital expenditure needed for development but can “buy in” what it requires from existing solutions. “David is now also working on ways to incorporate i-beacons, which send out an identification signal via Bluetooth. “This can be used to register the people who come near a patient, sending out an alert when, for example, the nurse meant to deliver medication does not turn up. “But it can be used for everything from time and motion studies to links with Ceptr,” Mr Vassallo explained.
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e Business OBSERVER
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INDUSTRY FOCUS
New marina blows life into yachting sector
The construction of a new marina at Sa Maison is being eagerly anticipated by stakeholders in the yachting sector, who believe that it will stimulate demand for boats as well as for all the services and products they require. For years, the lack of berths throttled the sales of boats but this has changed significantly, thanks to the opening of marinas at Portomaso and Vittoriosa, and the extension of the Creek Development marinas following privatisation. Seasonal pontoons were also set up at Kalkara and the Royal Malta Yacht Club, with another
taking shape by the Ta’ Xbiex waterpolo club. In fact, the number of berthing spaces increased from 1,511 in 2009 to 1,904 in 2012, according to Transport Malta, and is set to be boosted by another 240 berthing spaces and six floating pontoons at Sa Maison, following a government tender. A report commissioned by TM and compiled by Adi Associates said the Sa Maison project would meet “some of the demand” for berthing facilities, but the waiting list pressure has undoubtedly slackened and
“Creek Developments has carried out a complete infrastructural overhaul of its marinas since it took over in 2011”
Creek Developments said that, thanks to skilful management of its marinas, it was now “very rare” for a visiting yacht to be turned away – even in peak season.
There were five bidders for the 25-year concession at Sa Maison: Marina di Valletta Consortium, Harbour Management Ltd, two bidders called Valletta Marina Consortium and CGS – owned by
the General Workers’ Union through one of its commercial companies in partnership with Creek Developments Ltd, which already operates the Ta’ Xbiex and Msida Marina, and another company controlled by the owner of the Paparazzi restaurant in Gżira. The number of berths is not the only improvement for yacht owners. Creek Developments has carried out a complete infrastructural overhaul of its marinas since it took over in 2011, introducing comprehensive safety systems as well as maintenance schedules.
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INDUSTRY FOCUS
Another re-organisation is planned for winter 2015-2016 to optimise the available space even further, while the company will soon move to offices closer to the pontoons, offering greater convenience and a five-star service to residents and visitors alike, with offices, club house, business centre, laundry and sanitary facilities under one roof. In the marina itself, Creek’s focus is on preventive long-term maintenance and improving the environment by prevention of pollution and the active encouragement of good practices. CEF Trading, which imports Nubian antifouling to Malta, believes that there is considerably more awareness about the environment. “In modern times, antifouling paints are formulated with either toxic copper, or other biocides – special chemicals which impede growth of barnacles, algae, and marine organisms. Some innovative bottom paints that do not rely on copper have been introduced in response to the increasing scrutiny that copper-based self-leaching bottom paints have received as environmental pollutants,” a company spokesman said. Creek also invested in the power supply at the marina, which was being put under pressure as boats added more and more equipment, especially powerhungry air conditioning. Fabian Enterprises, which provides electrical and electronic equipment, is concerned that boat owners are not aware of the loads being added to their electrical systems. “When working on your boat’s electrical system, apart from costs you should also take into account the load that the electrical system will be handling. Plan ahead and other loads that might be introduced later on – like a fridge, extra lights, entertainment system, etc.,” a spokesman advised. The saying is that a boat is a hole into which you pour your money. Sailpower warns that this is not just a figure of speech but does reflect the real situation. “To keep a boat in good working condition and looking good you
must do regular maintenance which costs money. However, the better you maintain your boat the better the resale value will be, so it is not all a loss. “The market value of a boat starts going down as soon as it hits the water and by the third year it may be down by as much as 30 per cent. If anything, the resale value in the current situation is worse than it used to be due to the number of secondhand boats for sale for very low prices in countries like Italy and Spain, which have affected our market. The trend this year is for owners to go to Sicily to buy their second-hand boat from there,” the company said. Another expense associated with boat ownership is insurance, and the lack of understanding about what policies do and do not cover is a headache for Mapfre Middlesea. As with cars, boat owners can choose either third party only or comprehensive insurance – and also as with cars, the policy has to cover them both while in use or stored, in Malta or overseas, and
“It is highly recommended to weigh out the options prior to any purchase”
whether being used recreationally or for racing or charter. Because of seasonal weather patterns, boats also have a period during which the owners have unrestricted use of the boat – as long as the boat afloat is on an agreed mooring. “If the vessel is berthed in a safe port, the in-commission period provided is usually from April 15 to November 15. The remaining period is usually the laid-up period,
which represents the period when the boat is not in use and is stored in a safe berth or ashore. “Most policies will permit limited navigation during the laid-up period meaning that the boat may be used during daylight hours and subject to the weather not forecasting a wind speed in excess of force four on the Beaufort scale for motor vessels or force six in the case of sailing boats,” it advised. The cost of running a boat is not limited to maintenance, berthing and insurance, of course. The cost of fuel is also a major consideration, and Sailpower reported that it has had an impact on the way boats are used. “Owners travel shorter distances to anchorages especially with a motor boat and trips to Sicily are now mainly restricted to the nearest point, i.e. Ragusa. There have been some motor boat owners who have switched to sailing boats because of the cost of fuel,” it said. International Marine Centre – one of the first chandlers to target the leisure market – has seen
massive changes since it first opened in 1958. “Yachting chandlers have flourished since those times but, as the saying goes, time flies and things change, or rather, evolve. Since Malta’s EU membership 11 years ago, most well-established chandlers had to adapt to compete with newly-opened parallel importers who might not possibly offer the same standard of after-sales. “In addition, most marine equipment is readily available for purchase online. Unfortunately, most of this equipment comes without a regular warranty,” manager Paul Farrugia said. “It is highly recommended to weigh out the options prior to any purchase. It is not always a matter of getting the lowest and best retail price. Check whether the source of your purchase can offer you a high standard of aftersales service, a reliable warranty period and, last but not least, a good and ready supply of perishable spare parts – especially prior to a long cruise to another country with little or no local marine outlets available close by.”
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e Business OBSERVER
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PROPERTY MARKET
Reporting changes may improve property statistics Property statistics should become far more useful to policymakers in the coming months, thanks to various changes being made to improve the way they are collected. As of July 1, the purchaser will need to fill in a form listing additional details such as the type of property, its surroundings, the level of finish, the amenities and the value. This will be submitted to the notary along with the contract, and will eventually be passed on to the Commissioner of Inland Revenue through the capital gains division. Legal Notice 147/2015 tackles a number of changes which were required following the change in the tax on property made in the last Budget. In addition to the
information required for fiscal purposes, however, the form to be filled by the purchaser will allow a more qualitative assessment of the property market, which was not possible until now. Eurostat is well aware of the problems associated with property indexes, as each can capture part of the picture. For example, the gap between asking price and selling price “may provide an early indication of a change in the housing market”, it says in its guidelines. The disadvantages of using data captured for administrative – rather than statistical – purposes are associated with definitions, coverage, quality and timeliness, which need to be balanced against compilation costs.
“Additional form that becomes mandatory on July 1 will capture information that until now was not available”
It also depends on what the statistics will be used for: to determine demand and supply; to monitor prices as a measure of economic activity; to assess social policy measures to help affordability; to pick up trends and measure risk exposure; and to assess property as an investment option, to name but a few. The Notarial Council explained that at present, the public deed of sale only requires the price, location and a description. “Therefore, the notary is not in a position to give any further details regarding the property (such as the finishings, the surroundings, the amenities, etc), simply because these are not recorded in the deed in the first place and the notary has no man-
ner in which to establish these additional details,” council president Clinton Bellizzi said. After publication of a deed transferring property, the notary presents a form to the Capital Transfer Duty (CTD) section of the Inland Revenue Department, for payment of the tax and duty collected on deed. The notary also presents a land registry plan duly marked by an architect indicating the superficial area of the property. So the additional form that becomes mandatory on July 1 will capture information that until now was not available – at least not in one place. Eurostat fully supports information from the registry as it is very comprehensive – but it is not timely. This is usually overcome
e Business OBSERVER
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PROPERTY MARKET
by having revisions once the data has been verified, something which happens more for property than for other economic sectors because of the time lag between a property going on the market and its actual sale. For example, the National Statistics Office currently issues a report once a year, based on the figures from the CTD, as it believes that to do so any more frequently would be counterproductive, given the inevitable need for revisions. A good example of the confusion that this can cause was the recent NSO report, issued through Eurostat, that prices had gone up by 11 per cent for the last quarter of 2014, calculated year-on-year – compared with the CBM’s report that prices had gone up by seven per cent overall, but 11 per cent for apartments. Unfortunately, even more significant in the NSO report was the 29.2 per cent annual volume increase – compared with a decrease of 13.12 per cent a year before. However, there was not enough information in the report to explain this. Keith Borg, who leads the price statistics directorate at the NSO, said that as from June 1, the NSO will report on the annual price and volume as well as the transaction value. The White Paper soon to be issued to regulate real estate agents will also propose to make it mandatory for them to report transactions to the NSO, according to Douglas Salt, a council member of the Federation of Real Estate Agents. However, the 90 estate agents on the islands only cover around two-thirds of the market, with sales also being brokered by lawyers and notaries, as well as by the old-style sensara, as well as through direct sale magazines, which would mean there is still incomplete information. “The actual amount of transactions are not published – although they are estimated to be around 7,000-9,000 a year – so once the transaction value is known, we will be able to calculate the
Property roperty pric price e inde indexes xes v vary ary ac according cording tto o the point point in he pur chasing pr ocess a e is tak en. the purchasing process att which the pric price taken. TR ANSACTION TRANSACTION C OMPLETED COMPLETED
Sources: Sources: Reg Registry, istry, C Capital apital G Gains ains Division
SIGNING OF BUILDING C ONTRACT CONTRACT
Sources: Notaries,, La Lawyers S ources: Notaries wyers
MORTGAGE MORTGAGE APPROVED APPROVED
Sources: S ources: Banks
MORT GAGE MORTGAGE APPLIC ATION TIONS APPLICATIONS
Sources: S ources: Banks
PROPERTY PR OPERTY MARKET ON MARKE T
Sources: Newspapers, Sources: Newspapers, Real Esta te A gents Estate Agents
“If you underreported the price at which you bought, you will pay more capital gains when you sell at a higher price”
average transaction value,” one stakeholder said, declining to be identified. “For example, this would help us to identify whether the increase in volume was due to the new block at Tigné and to sales connected with the citizenship scheme – or to the first-time buyer
concessions boosting the lower end of the market...” The information available from the new form will therefore be fundamental when it comes to analysing the sale of apartments – the least heterogeneous segment of the market, and also the largest, accounting
for three out of every four transactions executed. “We will be able to see whether the apartments that are selling are small first-time buyer ones or high-end penthouses. And we will know whether demand is slowing down in some localities but growing in others,” the source said.
The Central Bank of Malta is also trying to improve its statistics. It has traditionally compiled its index based on advertised prices, which Eurostat warns against, as properties could be withdrawn from the market or sold for a very different price to that originally asked for. It is currently constructing a new index, which will use information drawn from mortgage loans from banks. The CBM said that it would be more detailed and would take into consideration differences in the quality of the property. “This does not exclude that in the future, other data will not be used, if these are found to be robust and accurate,” it said, asked whether data from direct sales magazines and real estate agents would be taken into account. “It is the aim of the CBM, the NSO and the Building Industry Consultative Council to work closely together to set up one property price index that would capture the best information on this very important sector. On its own, however, each of the indices can provide specialised information that would be useful for specific types of analysis,” it said. The problem with the CBM’s plans is that not all property purchases require a mortgage and the ones that are not captured – even though a minority – might turn out to be quite significant, particularly when trying to capture data on properties bought by foreigners for cash, for example, or by barter. The data captured will, of course, also depend on whether the vendor and buyer give true details about the price paid. The old system which gave the option of paying either capital gains tax or a final withholding tax (FWT) had greatly reduced the incentive to lie about the price – while the current system which is based on just the FWT could once again motivate the vendor to lie, according to a number of stakeholders contacted. “If you underreported the price at which you bought, you will pay more capital gains when you sell at a higher price. With FWT, there is no longer the incentive to declare the actual buying price,” the sources said.
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e Business OBSERVER
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CASE STUDY
Common Reporting Standards – another challenge for bank reporting The introduction of Common Reporting Standards (CRS) by the end of this year could be one of the biggest challenges that Malta – like various other EU jurisdictions – is going to face, Sparkasse managing director Paul Mifsud believes. The CRS are part of a concerted effort to stamp out tax engineering, es-
pecially cross-border efforts by corporates to avoid tax. This prompted the EU to adopt a foreign accounts tax compliance Act lookalike framework for disclosure requirements, also modelled on the OECD guidelines on tax harmonisation. “Companies which built up their business in Malta using tax as a
“Furthermore, countries that may opt to resist these standards will most likely be sanctioned”
unique selling proposition are going to have to wake up very quickly to a new reality. The common reporting standard is a positive move in encouraging simpler and more transparent structures globally as corporate veil will as a result become fully transparent as ‘look through measures’, for the purpose of disclosures, shall prevail. “There is not going to be anywhere to run to. Furthermore, countries that may opt to resist these standards will most likely be sanctioned. “If the OECD decides to blacklist a country or sanction it, there is no way anything will flow to those countries,” he said. “The transfer of money is nowadays flagged, making it impossible for
non-cooperative countries to try to divert this business. Malta has a put considerable effort into ensuring that its competitive tax advantage was not its main selling point, meaning that the impact on the jurisdiction should be minimal, he added. In fact, this could spell good news for Malta as entities may seek restructuring locally, looking to the Maltese jurisdiction and see-through structures as opposed to opaque structures offered elsewhere. “There are meetings going on at the moment for local stakeholders. This is a challenge that Malta should be also looking at politically. I don’t think there will be a massive upheaval but there could be an effect on a few entities that
may have come to Malta for the wrong reasons and who might feel that they no longer fit into the new landscape – we will see,” he added. The bank had long seen this as a potential issue which is why the bank had made strategic changes to its business model way back in 2006 focusing mainly on securities rather than traditional banking. Indeed, Sparkasse has thrived since it first got a licence in Malta in 2000 and opened with just six staff – because it was so open to change. It came to Malta to provide banking services locally and to non-residents, but by the time Mr Mifsud joined in 2006, it had already realised that this was a very crowded segment.
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CASE STUDY
He smiles when he remembers the twists in his career that led him to banking. His family was heavily involved in hotels and tourism but he had always had a strong pull towards the financial markets. When Malta started to pitch itself as an international centre for finance in 1996, he and some friends set up a company to provide nominee, trustee and offshore services. One thing led to another and after training, he obtained a licence as an investment service provider for private customers. And then came another twist: his company happened to be in the same block as Sparkasse. “Before I knew it I ended up in the banking world!” he smiled. Mr Mifsud and his executive team analysed the market and decided to stay away from the ‘red oceans’ – the known market space described in the 2005 book by W. Chan Kim and Renée Mauborgne – and to look instead for ‘blue oceans’ – the ones not yet conquered. “We decided to focus on key areas, key services and key markets. We felt that our international clients’ intermediary professionals like auditors, tax consultants, fund and asset managers, and company service providers were not being catered for. And we carved out a niche specialising in financial serviced: securities, fund custody, depository services and so on,” he said. “We got into the market as custodians at a very early stage. When you set up a fund, apart from having a fund manager and administrator, you need a bank and a custodian, who safekeeps the assets that a manager acquires for the fund. This is quite a specific niche. “Unlike any other bank in Malta, we are not heavily reliant on deposit taking simply because our model is mainly a fee driven one rather than one based upon providing credit facilities. Our balance sheet is plain vanilla and completely unleveraged,” he said, adding that this simplicity was one of the factors behind Sparkasse’s success. Another development that could send ripples through the banking system – also positive ones – is the EU’s drive to set up a Capital Markets Union, which European Commission president
“When you set up a fund, apart from having a fund manager and administrator, you need a bank and a custodian, who safekeeps the assets that a manager acquires for the fund”
Jean-Claude Juncker believes would cut the cost of raising capital, particularly for SMEs. “The EU wants to integrate Europe’s financial markets like stock exchanges to develop more sources of non-bank funding. “Regulators have come down heavily on banks – as a result of which they have gone back into their shell. The Capital Markets Union would be a great opportunity for banks to assist customers raise alternative finance via the capital market. After all, banks have become increasingly restrictive in providing traditional funding,” he said. The time he spent in the hospitality industry also helped as a customer service approach was fundamental to Sparkasse, one that he instils into his 40 staff. “We look for a positive attitude and competence more than anything else,” he said, explaining the rationale behind their recruitment approach. The bank takes on an average of one person a month.
“I believe that skills are grown but you can’t teach attitude and personality. A person with an average IQ should be trainable. This is not rocket science at the end of the day.” Mr Mifsud has put a lot of thought into the undefinable something that sets one company apart from another. The closest thing that he has found to explain it is ‘causal ambiguity’ – and in the case of Sparkasse, the ‘cause’ is the staff. “I think the major contributing factor to the success of the bank today is definitely the competence, professionalism and dedication of the staff. Your firm can only be as good as the people it employs. The success has to be shared between the people who have been here for years. “This is not a cliché but something I really believe. We structure the business on the basis of the team. And this is what we look for when we employ someone.”
PAUL MIFSUD, SPARKASSE MANAGING DIRECTOR, FEELS A FIRM CAN ONLY BE AS GOOD AS THE PEOPLE IT EMPLOYS. PHOTO: CHRIS SANT FOURNIER
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e Business Observer is Malta’s leading business newspaper distributed with Times of Malta every fortnight. Editorial Vanessa Macdonald, Head of Content (Business), Times of Malta.
EDITORIAL
‘Precarious’ future for shop tenants Business thrives on competition and competition thrives on level playing fields. Alas, the situation with regard to shops in Valletta is about as level as the Alps. The lucky ones are the shop owners who have their own premises as they have certainty – not only over whether they can stay there and for how long, but also over their costs. Less fortunate are those who rent their premises, either from the government or from the private sector. An increasing number of the ones who rent from the private sector pay rents at market prices and also have a degree of certainty. They might not be happy with what they are paying (or with the duration of the agreement) but what really makes them unhappy is that they are surrounded by numerous businesses who rent at subsidised rates. How can a shop paying a few hundred euros a day in rent afford to charge the same prices for its products or services as one paying a few hundred a year? The private owners earning such paltry rents are also hapless victims. They are unable to get a realistic market rent and are also unable to retrieve their property. This will change over the coming decade years, as changes to rent laws creep into force to give tenants time to adjust – but it is not nearly fast enough for owners champing at the bit after decades. For those paying a paltry rent to the government, it is the taxpayers who are the victims as the government is ultimately not maximising its assets. The previous government sought to address this through a scheme which raised the rates – but also gave tenants more security as instead of leases that had to be renewed every nail-biting six months, they had the option of three 15-year leases. This government, however, was not satisfied and changed the option to a 45-year emphyteusis, raising the rates considerably higher,
on par – if not higher – than commercial rates. (And why not? The capital city is a prime location, after all.) This has sorted out one important aspect of the problem affecting the majority of tenants – but there is another category of tenants who live in a legal limbo. These are the ones who sublet from tenants who have a lease agreement with the government. Since very few of those lease agreements allow subletting, the sub-lessors status is precarious, to say the least. The scheme could work in different ways: since the emphyteusis scheme allows subletting, the fortunate ones could finally get a proper agreement from the tenant. And since many of them already pay nearly commercial rents to sublet, the impact on them would not be so great. The current scheme also allows sublessors to apply for an emphyteusis themselves, great for those who want to free themselves from the clutches of unscrupulous tenants who charge them exorbitant rates. But if the government gets applications from both the tenant and the sublessor, who would win? Tonio Camilleri, the head of the Merchants Street Business Association, is concerned that some sublessors will end up on the streets, all their work and investment and goodwill counting for nothing. There is no doubt considerably more information available to the government than has been divulged but Mr Camilleri is right in saying that the scheme should have been preceded by a clean-up exercise to establish who was really occupying its premises, whether this was being done regularly or not, for how long they had been there, and how much they were paying. The scheme will undoubtedly bring certainty to the majority but it should also ensure that those who were squeezed between a rock and a hard place for so many years do not end up even worse off.
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BUSINESS OPINION
Public finances on the mend
Philip von Brockdorff The European Commission’s recommendation to lift the excessive deficit procedure is evidence that Malta’s public finances are back on track. It also signifies that the requirements of the stability and growth pact are practically being met. There are a number of reasons why the excessive deficit procedure is likely to be lifted. First, the Maltese economy is growing – and at a rate higher than our eurozone partners. In 2015, this growth is forecast to reach 3.5 per cent, driven by an increase in consumption and, to a lesser extent, investment. A growing economy generates higher levels of taxation, both direct and indirect, and, coupled with enhanced efficiency in tax collection, it is perhaps not surprising that the increase in government revenue is at present exceeding the increase in expenditure. A second reason is government’s efforts to curb expenditure. Relative to gross domestic product, government spending has virtually remained at pre-2013 levels so the reduction in the general
government deficit is to a larger extent due to increased revenue from direct and indirect taxation. Sound financial management, especially in the timing of the maturity date of government stocks, has also proved important. Timing is crucial for managing expenditure on capital repayment and the Treasury has also done a very good job in seeking to optimise the government’s capital structure. In my view, the above reasons go a long way towards explaining why public finances are on the mend. However, no analysis can be complete without considering the risks the Maltese economy is likely to
face in the months and years ahead. The government is aiming to achieve a balanced budget by 2019. That seems to be ambitious, given the underlying risks as well as possible international developments that might derail economic growth and fiscal targets. In the first instance, our economy’s increasing reliance on tourism is becoming more obvious. Whereas tourism has boosted consumer spending and provided new jobs, the risks associated with planning of flights and hotel capacity cannot be overlooked. Risks are also likely to increase with tougher competition in southern
Europe and the emergence of new market participants operating new business models, as well as the increasing relevance of web-based distribution of travel services. Second, despite increasing global inventories, Brent crude oil prices are expected to rise from an average $61 a barrel in 2015 to $70 in 2016. Several factors are likely to contribute to this, including higher global oil demand, declining US tight oil production in the coming months, and the growing risk of unplanned supply outages in the Middle East and North Africa. The growing uncertainty in the Middle East, especially due to increasingly
“e risks associated with demographic change and population dynamics need to be factored in”
strained relations over a number of geopolitical issues between Iran and Saudi Arabia, is also likely to affect crude oil prices. The outcome of the forthcoming EU referendum in Britain, and a positive impact of EU quantitative easing on eurozone economies could see the euro strengthening against a weaker pound, thereby make exports of tourism services to the UK more expensive. And finally, the risks associated with demographic change and population dynamics need to be factored in. On a positive note, Eurostat’s revised population projections show that the Maltese population will continue to grow till 2060. This would reduce somewhat the dependency burden of retirees on the working age population. However, it is unlikely to offset further increases in pension expenditure. Further pension adjustment appears inevitable, but more far-reaching reform may be required if the economy does not grow as rapidly as expected, pressuring all incomes – including pensions. The risk that the distribution of income will change – to the detriment of retirees – would in these circumstances increase. Despite an improved outlook for public finances, it would be foolhardy to ignore the risks that could negatively impact fiscal targets. I have tried to identify some of the more important risks but the list is not exhaustive by any means.
Philip von Brockdorff is the head of the economics department at the University of Malta.
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NEWS/APPOINTMENTS
Milk production up Continued from page 5 a level playing field in this sector while justifying why it fully deserves the attention of policymakers,” the study said. Malta had negotiated a number of derogations to apply following accession, including state aid and transition periods, as well as €8.38 million direct income support by 2010 to mitigate the effect of the removal of levies on imported dairy products. Koperattiva Produtturi talĦalib, the milk producers’ cooperative which holds 70 per cent shareholding of Malta Dairy Products, developed a strong and efficient supplier-buyer relationship. This also ensured total quality control over the milk supply chain with KPĦ as the sole owner of the feed mill supplying animal feed to its members. MDP processes, packs and distributes fresh milk produced from around 85 dairy farms in Malta and another 34 in Gozo. In May 2005, MDP and KPĦ introduced a payment scheme basing payment to milk producers, based not only on the volume supplied but also on fat and protein levels. The estimated investment in farm upgrading in the sector in the first 10 years of EU membership reached €40 million, most of which was forked out by dairy farmers themselves.
Besides farm upgrading, €17.3 million were also required at MDP, of which only 2.6 per cent came from EU support schemes. Unsurprisingly, given the required investment, the number of licensed milk production holdings supplying raw milk fell from 184 in 2003 to 120 in 2013, while the number of dairy cows fell from 7,607 in 2003 to 6,333 – though this was expected in view of higher levels of efficiency. The study found that despite the challenges caused by market liberalisation, stiff competition, the increase in the price of feed, the heavy financial commitment required by dairy farmers, and the challenge to meet EU regulations and standards, the production of milk after 10 years of membership remained at the levels recorded prior to EU accession. The study concluded that competition was likely to intensify as dairies across the EU consolidate and merge, seeking increased market shares and exploiting their favourable economies of scale and lower costs of production. “The dairy sector... together with policymakers, will need to find new ways to address natural and structural disadvantages that have long characterised Maltese agriculture, while at the same time coping with the forces of competition.”
President for IFSP Juanita Bencini, a partner at KPMG, was elected president of the Institute of Financial Services Practitioners. This is the first time the institute has been headed by a woman in its 26-year history. Other officers appointed to council include Andrew Manduca, reelected as vice president, Rosanne Bonnici, re-elected as secretary and Pierre Galea Musù, re-elected treasurer to the IFSP. The IFSP council includes a total of 16 members, drawn from across the financial services firms in Malta. The Institute of Financial Services Practitioners is an association of professionals working across the entire range of financial services. It represents the views of practitioners to the authorities and contributes to the development of the
JUANITA BENCINI, IFSP PRESIDENT Maltese jurisdiction working with the government and the regulators. The IFSP currently has over 400 members.
New head for CILT Miriam Camilleri is the new chairman of the Chartered Institute of Logistics & Transport Malta. Ms Camilleri has considerable experience and involvement in the transport industry and has been part of the institute for several years, including as vice chairman. She has taken
over the helm from John Portelli, who served as chairman for a number of years. CILT Malta represents the Chartered Institute of Logistics & Transport International, which has a global membership of around 30,000. The objective of the institute is to promote logistics and transport.
PHOTO: CHRIS SANT FOURNIER
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e Business OBSERVER
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STOCK MARKET REVIEW
e 2015 dividend league table Edward Rizzo An article on the dividend league table has now become an annual event following the conclusion of the annual financial reporting season on April 30. The dividend league table is based on the net dividend yield and not the gross yield by each of the companies in their last annual financial year. This provides a better comparison across the market since some companies benefit from tax incentives and distribute dividends out of tax free profits. The 2015 dividend league table therefore is based on the net dividend distributed to shareholders in respect of the 2014 financial year with the resultant yield calculated on the current market price of the respective shares. A comparison of the 2015 league table with that published last year provides some interesting observations due to a number of developments that took place over the past 12 months. As a start, it is worthwhile noting that yields are generally substantially lower than last year mainly as a result of the significant rally in many share prices but also as a result of some lower dividend payments. This is mainly the case with the banks. Notwithstanding the 22 per cent decline in the overall dividend paid by Bank of Valletta plc last year, the bank retained the top spot in the league table. However, the net yield is now at 3.6 per cent compared to 5.3 per cent last year – a very clear indication of the considerable decline in yields over the last 12 months.
Malta International Airport plc moved up seven places in the league table from ninth position in 2014 to second position in 2015. The current net yield of 3.2 per cent is, however, marginally lower than last year’s net yield of 3.3 per cent as the 47 per cent increase in the dividend paid out in respect of the 2014 financial year was offset by the sharp rally in the share price from €2.25 in May 2014 to the current level of €3.46, an increase of 53 per cent. The bulk of these gains materialised in Q1 2015 following the significant increase in the final dividend and the forecast of further passenger growth expected during 2015. The third place in the 2015 dividend league table goes to Mapfre Middlesea plc with a net yield of 3.1 per cent compared to a net yield of 3.8 per cent last year which had positioned Mapfre Middlesea in sixth positon in 2014. The company maintained its dividend payment but the 36 per cent rally in the share price resulted in a lower yield. The net yield of Simonds Farsons Cisk plc was one of the few
“Malita Investments plc dropped two positions in the league table as the dividend only increased marginally from one year to the next while the share price jumped by 58 per cent” that improved over the past 12 months. The net yield improved marginally to 2.8 per cent but the ranking of Farsons improved to fourth place from 10th place in 2014. The 19 per cent increase in the dividend paid out for the financial year to January 31, 2015 outweighed the 17.5 per cent increase in the share price. Although the Farsons equity produced a double-digit gain, it underperformed most of the other market constituents, largely as a result of the lack of supply of shares on the market due to the tight ownership structure which restricts trading activity.
The property-related companies with business models capable of offering regular and sustainable dividends to shareholders have very different rankings in the league table, largely as a result of different dividends declarations last year. All three companies saw their share prices climb over 50 per cent last year. The highest yielding equity among the group is Plaza Centres plc as the company increased its dividend by 12.6 per cent over last year following an improved financial performance on higher occupancy levels within the centre.
Despite this improved dividend, the yield declined by almost 100 basis points from 3.8 per cent in May 2014 to the current yield of 2.8 per cent, following the rally in the share price of 52 per cent. Notwithstanding the decline in the yield, Plaza improved its ranking to fourth position in the league table. Malita Investments plc dropped two positions in the league table as the dividend only increased marginally from one year to the next while the share price jumped by 58 per cent – the second best performing equity over the past 12 months. The significant upturn in the share price led to a sizeable decline in the yield to 2.7 per cent from 4.1 per cent last year. On the other hand, the 2.3 per cent net yield of Tigné Mall plc was marginally unchanged from one year to the next as the 52 per cent increase in the share price matched the increase in the dividend. The substantial increase in the dividend from one year to the next was due to the inclusion of the interim dividend in 2014 for the first time following the Initial Public Offering in the second half
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STOCK MARKET REVIEW
of 2013. Tigné Mall should continue with its semi-annual dividend distribution policy also in 2015 and future years. The company that registered the largest increase in its overall dividend was Medserv plc with a rise of 133 per cent from €0.024 per share to €0.056 per share. However, this equity was also the one that performed strongest over the past 12 months with a rally of 66 per cent. The increase in the dividend outweighed the rise in the share price leading to an improvement in the yield from 1.85 per cent in May 2014 to the current level of 2.60 per cent. The strong increase in the yield helped Medserv improve its ranking from 13th place in 2014 to ninth place. Last Friday, Medserv issued its 2015 financial projections and the directors anticipate pre-tax profits rising by a further 33 per cent during the current financial year to €4 million. The substantially higher dividend being approved by shareholders during the upcoming annual general meeting could therefore be sustainable in respect of the 2015 financial year given the expectation of the growth in profitability. RS2 Software plc doubled its dividend from one year to the next while its share price increased by 32.5 per cent resulting in an improvement in the net dividend
Equity
Next Dividend Yield 18.5.2015
Bank of Valletta pld
3.56%
Malta International Airport plc
3.19%
Mapfre Middlesea pols
3.13%
Plaza Centres plc
2.82%
Simonds Farsons Cisk pls
2.74%
6pm Holdings plc
2.70%
Malita Investments plc
2.69%
MaltaPost plc
2.67%
Medserv plc
2.60%
Tigne Mall plc
2.35%
GO plc
2.34%
HSBC Bank Malta plc
2.25%
RS2 Software plc
1.40%
Lombard Bank Malta plc
1.33%
yield from a mere 0.9 per cent to 1.4 per cent. Despite the doubling of the dividend, RS2 still ranks among the weakest dividend yielders in 13th place. On the other hand, the dividend paid by HSBC Bank Malta plc dropped by 48 per cent and the
yield declined from 4.2 per cent to 2.25 per cent. HSBC’s equity dropped from third position in the 2014 dividend league table to a current ranking of 12th in the 2015 table. As was evident again last year,
investors must not only base their investment decisions on the dividend yield of any particular year but on the sustainability of the dividend in future years which is in turn dependent on individual company circumstances. Moreover, investors would do well to understand that movements in bond yields - as discussed in last week’s article - may also impact the equity market. As share prices of some companies rallied as a direct consequence of the sharp decline in bond yields over the past 12 months, any possible rally in yields in the coming months and years could likewise negatively impact some share prices. Notwithstanding changing yield expectations, company-specific developments such as higher earnings from new business contracts or from acquisitions could also largely affect share price dynamics. In view of these multiple factors influencing share price movements, investors need to keep well abreast of market and company developments and seek regular independent financial advice to ensure that their portfolios are well structured to benefit from such developments while remaining within their investment objectives and risk levels.
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
e Business OBSERVER
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May 21, 2015
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BUSINESS UPDATES
Universe card – a brand-new payment card Living your life to the maximum is possible with the Universe card – a brand-new payment card for people who are going places. With worldwide benefits and complete with 24/7 global concierge services, it is a guaranteed gateway to the high life. On hand to fulfil any request at any time, including taking care of booking flights, hotels or holidays, the Universe card’s lifestyle management team is able to open doors and offer opportunities otherwise not thought possible. Funds can be conveniently loaded to the card via standard bank transfers or from another card with no commitments necessary, no requirement for a bank account, no credit checks and no interest charged on purchases. Money loaded and spent on the card also automatically enters the cardholder into a regular lottery to be in with the chance to win up to 100 prizes between May and July. Prizes range from shopping vouchers, a number of holidays from stylish city breaks to luxurious long-haul escapes, iPhones and even a car. A unique business project based in Malta with a truly global reach – the Universe Card, complete with lifestyle solutions and an insurance package for peace of mind, makes the perfect partner for the frequent traveller! www.theuniversecard.com
Fitch reviews BOV support rating Fitch Ratings are currently reviewing the issue of sovereign support for banks globally. As part of this exercise, the agency has announced that BOV’s support rating has been reviewed downwards from ‘2’ to ‘5’. The support rating evaluates the likelihood that a bank will receive extraordinary support in case of need. Such support typically comes from the national authorities of the country where the bank is domiciled. Fitch’s action does not reflect any concern about the ability or willingness of governments to support financial institutions, but rather reflects the agency’s opinion that recent regulatory initiatives have reduced the likelihood of sovereign support for commercial banks worldwide. Within the European Union (EU), the Bank Recovery and Resolution Directive (BRRD) and the Single Resolution Mechanism (SRM) provide a framework for resolving banks that is likely to require senior creditors participat-
ing in losses, if necessary, instead of or ahead of a bank receiving sovereign support. This action does not in any way affect BOV’s long-term credit rating of BBB+ with a stable outlook. BRRD and SRM form part of the EU project of the Banking Union, which will require banks to improve their loss-absorbing capability by increasing capital. In this context, BOV will continue to strengthen its capital buffers by embarking upon a programme of capital issuance in the medium term.
Malta International Risk Congress at Hilton Malta It’s not too late to reserve your space at this year’s Malta International Risk Congress on June1-2 at the Hilton, St Julian’s. A great line-up of expert speakers will be discussing risk regulation and its impact on European and international financial markets, captives, SPVs and PCCs, and alternative risk transfer solutions. Black swan events and emerging risks – particularly cyber, political and emerging financial lines – will also be examined in depth. Attendance is free for risk managers. For more information or to book your place, go to www.commercialriskeurope.com/maltacongress201 Don’t miss out – book your space now!
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e Business OBSERVER
| May 21, 2015
BUSINESS UPDATES
Malta to hold first logistics managers & practitioners forum with HSBC’s support Building on last year’s inaugural TransLog events that sparked a new wave of interest in the transport and logistics potential of Malta, the first edition of the logistics managers & practitioners forum will be held on Friday, June 19. Supported by HSBC Bank Malta, the forum will bring together for the first time industry leaders to share best practice and foster exchange of ideas. Logistics is that part of the supply chain process that plans, implements and controls the efficient, effective flow and storage of goods, services and related information from the point of origin to the point of consumption.
“The TransLog sector in Malta offers a number of significant untapped opportunities and, if harnessed professionally and fully, it will increasingly become an even greater contributor to the Maltese economy,” said organiser Alex Borg of SSM Group. HSBC Malta’s head of commercial banking Michel Cordina said: “Going global is increasingly critical for Maltese companies if they are to remain competitive, and logistics is one of the support backbones required to sustain this essential development for Malta. In this regard, TransLog events, such as the Logistics Forum, complement our own initiatives at HSBC. With its global connections and expertise, HSBC is uniquely
positioned to help companies in Malta achieve success on the global level.” A panel discussion featuring senior officials from EY Malta, Express Group, Malta Freeport Corporation, HSBC Commercial Banking, and from government will also take place. Parliamentary Secretary for Competitiveness and Economic Growth José Herrera will address the audience to start off the proceedings. TransLog events are organised by Support and Supply Management Group (SSM) and marketing communications agency BPC International Ltd. More information and prior registration can be made by calling 2123 1015 or by email: comm@ssmgroup.com
HSBC MALTA’S MICHEL CORDINA AND SSM GROUP’S ALEX BORG
e latest in laminate flooring
New trading portal launched There’s a new trading portal in town – Tomato. Users can also upload the items they wish to sell in a simple and secure manner. It’s a sure-fire way to transform unwanted stuff into much-needed cash. Tomato.com.mt allows sellers to showcase an unlimited number of items. The service is free, however, if you want to go that extra mile, you can also choose to go Premium for more prominence on the homepage and search facility. To start using the trading platform, simply log on to www.tomato.com.mt and register. On registering, you will receive an activation e-mail and from there on, you are a registered user and can start trading. Buyers can search for items for sale in an easy
way using their mobile, tablet or desktop computer and items are categorised for easy browsing, from antiques to books, to automotive, to household appliances, to property and much more, making it all the more simple to find what one is looking for. Buyers are also invited to exchange messages with sellers to ensure that an eventual sale leaves both parties satisfied. For more information, send an e-mail to info@tomato.com.mt or call customer support on 2559 4131 during office hours.
A market leader in the local scene, M. Demajo (Timbers) Ltd is proud to introduce one of its latest products – the Kaindl 10mm narrow plank laminate flooring which is a first of its kind in Malta, offering style, strength and durability all at once. Decades of experience in the laminate flooring sector lie behind the Kaindl collection, featuring trendy designs with the most up-to-date product attributes ranging from soundproofing to antistatic and antibacterial surfaces. The full range can be found at M. Demajo Timbers Ltd. The company is also highly active in the provision and supply of
bamboo flooring, decking, rubber flooring mainly used for commercial properties, solid parquet and wooden staircases. Its original role, that of timber importation, has given the company its quality name for a quality range of timber in Malta. The firm is currently expanding in related activities in parquet, industrial flooring and ancillary materials. The company offers free onsite estimates and professional consultation. The company can be found at Olive Square, Qormi. For more details call: 2148 7078/2144 1501 or 9943 0330; or send an e-mail: timbers@demajo.com.