The Business Observer Newspaper 22nd September 2016

INTERVIEW

Issue 60

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September 22, 2016

Distributed with Times of Malta

Increases in house prices ‘not excessive’ Increases in real house prices in recent years were not excessive when compared to those in other countries, a study on the property market has concluded.

The study by Brian Micallef, research office manager at the Central Bank of Malta, found that after a correction period that lasted five to six years, the housing market started to recover in 2013, with property prices registering healthy growth rates in the two years that followed.

The increase was attributed to a number of factors: a robust economic growth, low unemployment and government policies aimed at stimulating the property market.

The research also refers to the Individual Investor Programme (IIP), which targets high net worth individuals, thus raising demand for high-end properties.

Other contributing factors included an investment registration scheme in 2014, the exemption of stamp duty for first-time buyers on the first €150,000 of their new property value and capital gains tax reform last year, with the introduction of a final withholding tax system based on the value of the property.

Portfolio rebalancing by investors into the housing market was also mentioned as possibly having played an “increasingly important role”, especially in the context of the prevailing low interest rate environment.

According to the Central Bank of Malta house price index, residential property prices rose rapidly in the early 2000s with double-digit growth rates being registered between 2003 and 2005.

The boom in property prices, the study notes, peaked in 2004 and,

then, the growth rate in house prices gradually slowed down although it remained positive until late 2007.

As happened elsewhere, prices dropped in 2008 and 2009, partly correcting the previous excesses.

The study, however, points out that the drop was “relatively mild”, averaging just under four per cent annually throughout the two years in question. This was followed by “relatively low growth” between 2010 and 2012 and property prices started to recover in 2013, exceeding the pre-crisis peak in early 2014.

Subsequently, house prices maintained strong and positive momentum, averaging 6.6 per cent per annum between 2014 and 2015.

A combination of demand and supply factors had led to the boom in house prices in the early 2000s.

Membership of the European Union, the study says, could have influenced expectations about future economic prospects. Also, entry in the ERM II mechanism, two years before the euro was adopted, led to domestic interest rates slowly coming into line with those set by the European Central Bank.

Bank lending rates to households for mortgages fell from 6.6 per cent in early 2000 to 4.3 per cent at the end-2004. Low interest rates impacted positively on property prices, with residential mortgage debt rising from 14.5 per cent of GDP in 2000 to 35 per cent in 2007.

The investment registration scheme, a tax amnesty for Maltese residents with overseas assets effective between 2001 and 2005, played its part too. As a result, many residents often invested their assets in domestic property.

e Central Bank of Malta’s main aim is to ensure financial stability without slowing down economic growth, the new governor, Mario Vella, says. see pages 10 and 11 >

NEWS Malta ranks as one of the top three EU28 countries in eight goods and 13 services markets, according to data just released by the European Commission. see page 3 >

OPINION

“Social and demographic factors are having an important impact on the housing market” Property development was further encouraged by the rationalisation exercise launched by the then Malta Environment and Planning Authority in 2006.

All this, in turn, encouraged construction. Just to have an idea, development permits for new dwellings units, mostly apartments, almost doubled between 2003 and their peak of 11,343 in

2007. Together with a higher supply there was also a sharp increase in vacant dwellings.

Going by the 2005 census, dwellings increased to 192,314 units in 2005, up 24 per cent compared to a decade earlier. Vacant properties numbered 53,136, or 27.6 per cent of the total housing continued on page 5

Time would be better spent if we had to start planning for a more sustainable economy, Philip von Brockdorff, head at the Department of Economics, argues. see page 15 >

STOCK MARKET REVIEW A look at the most significant share price movements and shifts in investor sentiment towards a number of local companies following the publication of interim results. see pages 18 and 19 >

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NEWS

Malta scores top marks in EU consumer markets index Malta ranks as one of the top three EU28 countries in eight goods and 13 services markets, data just released by the European Commission shows.

The data features in the 2016 Consumer Markets Scoreboard, which monitors EU consumers’ ratings of how 42 goods and services markets work.

The ratings show that markets’ performance has improved since the last scoreboard in 2014. The positive trend observed since 2010 is speeding up, with financial services showing the biggest progress.

Consumers’ top three goods markets are books, magazines and newspapers, the market for entertainment goods (such as toys and games) and large household appliances, like fridges.

In the case of services, consumers’ three top-ranking markets are leisure-related, ranging from holiday accommodation to cultural and entertainment services and sport services, such as gyms.

“We can see from this year’s Scoreboard that consumer-friendly rules, market reforms, as well as effective enforcement of consumer rules, have made consumers more confident in the markets”, Vera Jourová, European Commissioner for Justice, Consumers and Gender Equality said.

“We must keep this encouraging trend going, especially for markets that still underperform, like telecoms and energy.

That’s why consumers are at the heart of the Commission’s priority projects.”

Overall, the average market performance indicator score for Malta is 84.2, that is, 4.4 points above the EU28 average.

The goods markets score stands at 86.0 and the services markets 83.3, above the EU28 average by 3.6 and 4.8 points respectively.

The overall market performance indicator score grew by 2.5 points since 2013. It was up by 3.8 points in the case of the goods markets and 1.8 points with regard to the services markets.

The top goods markets on the island are ‘meat and meat products’, ‘nonprescription medicines’ and ‘fruit and vegetables’. The bottom three are ‘secondhand cars’, ‘entertainment goods’ and ‘fuel for vehicles’.

Of the 13 goods markets, 11 have improved since 2013. The markets for ‘meat and meat products’, ‘fruit and vegetables’ (both +6.8), and ‘bread, cereals, rice and pasta’ (+6.0) had the highest increase since

2013 and only the ‘second-hand cars’ market decreased in score (-2.9).

The data shows that all goods markets in Malta perform better than the EU28 average, with the exception of the ‘books, magazines and newspapers’ and ‘entertainment goods’ markets, which are in line with the EU28 results.

The best performers compared to the EU average are the markets for ‘meat and meat products’ (+7.1), ‘fruit and vegetables’ (+5.8), and ‘second-hand cars’ (+5.2).

Almost every goods market increased in the comparability, trust and expectations components since 2013, with the ‘secondhand cars’ market the main exception to this positive picture.

The goods markets average proportion of complaints remained stable.

The top three services markets in Malta are ‘holiday accommodation’, ‘airline services’ and ‘packaged holidays and tours’ while those at the bottom are ‘tram, local bus, metro and underground services’, ‘TVsubscriptions’ and ‘internet provision’. Of course, there are no tram, Metro and underground services in Malta.

Of the 27 services markets gauged in Malta, 11 improved since 2013. The ‘electricity services’ (+6.1) and ‘online gambling and lottery services’ (+5.7) markets fared the best, followed by ‘bank accounts’ (+4.0).

Most services markets in this island perform above the EU28 average, with the ‘mortgages’ (+9.2) and ‘real estate services’ (+9.1) markets posting the highest scores in relation to the EU average.

The services markets average comparability, trust and expectations scores

“e services markets average proportion of complaints decreased”

increased since 2013. The services markets average proportion of complaints decreased, although the ‘online gambling and lottery services’ and the ‘electricity services’

markets have increased proportions of complaints. The proportion of problems increased both overall and across most services markets.

Key ‘components’ Relevant national markets are assessed in terms of key ‘components’ that contribute to their performance, namely: 1) Comparability – the ease/difficulty of comparing goods or services on offer.

2) Trust – the extent to which consumers trust that retailers/suppliers comply with consumer protection rules.

3) Expectations – consumer satisfaction, the extent to which market lives up to what consumers expect.

4) Choice – consumers’ satisfaction with the number of retailers/suppliers.

5) Overall detriment – proportion of consumers who experienced problems in the market and the degree to which those problems cause detriment (including, but not limited to financial loss) to the consumers.

6) Complaints – consumers’ propensity to complain in particular to the seller/provider and/or a third party as a result of the problems experienced.

7) Switching – switching of tariffs/providers, together with an assessment of the ease of switching and reasons for not switching.

The first five indicators are applicable to all the markets and form the market performance indicator, a composite index serving as the basis for the main ranking of the markets and ranging from zero to 100.

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NEWS

Monetary policy ‘very accommodative’ at present continued from page 1 stock in 2005, up by almost one half (49 per cent) over 1995.

Then, as a result of a global economic crisis, a slowdown in the construction sector and a drop in prices ensued. This happened for various reasons, but mainly supply-related.

The study found that the adjustment in housing market affected both prices and quantities. Permits for new units dropped by over 50 per cent between 2007 and 2009, amounting to 2,705 units in 2013.

Likewise, investment in housing declined from its peak of 7.4 per cent of GDP in 2007 to 2.8 per cent in 2013. House prices dropped in 2008 and 2009, followed by a period of sluggish growth until 2012.

The research highlights the fact that social and demographic factors are also having an important impact on the housing market.

Ageing and changes in the traditional family nucleus, such as the introduction of divorce and more single-parent families, always raises the demand for housing. Also, the influx of foreign workers, up from about one per cent of the workforce in 2004 to more than 10 per cent a decade later, also had a positive impact on demand. This last factor also pushed up the demand for

rented property, especially in areas close to main tourism hubs and fast-growing industries, such as remote gaming and the financial sector.

After analysing a number of indicators, Mr Micallef noticed a period of overvaluation in house prices starting from round about the time Malta joined the EU and peaking in 2006-2007.

The disequilibrium started to be corrected sometime in 2008 following a slowdown in house prices.

In his conclusions, Mr Micallef points out that even though house prices appeared to be broadly in equilibrium, the momentum increases could imply that they can go beyond such equilibrium if the trend persists. This, he adds, poses a dilemma for monetary policymakers because macro-prudential policy instruments are mostly effective to address credit-fuelled speculation but are much less effective if boom conditions are not driven by credit.

Asked to expand on this point, Mr Micallef notes that monetary policy is “very accommodative” at present. Since the financial crisis, the European Central Bank cut interest rates to very low levels and also embarked on a number of non-standard monetary policy measures. These measures are intended to ensure supportive

financing conditions, thus facilitating the momentum of economic recovery in the euro area and secure a return of inflation to levels below but close to two per cent in the medium term.

These measures are, in turn, reflected in lower interest rates on traditional instruments used by savers. In Malta, the weighted average deposit rate has gradually declined from about three per cent in early 2008 to about 0.6 per cent in the first half of 2016. Also, the 10year government bond yield went down from slightly below five per cent to about one per cent in the same period.

The low interest rate environment could have incentivised some investors to consider investment in property as an alternative to other traditional forms of investment.

Rising house prices, Mr Micallef remarks, are not driven by rapid credit growth. “For instance, according to contacts with a real estate agent, due to buoyant activity in the housing market, some developers may require less credit from banks as they are selling their property on plan and use the proceeds from deposits to finance some of their expenses,” he says.

The views expressed above are Mr Micallef’s and do not necessarily reflect those of the Central Bank of Malta.

BRIAN MICALLEF, RESEARCH OFFICE MANAGER AT THE CENTRAL BANK OF MALTA

“Some investors could have been tempted to consider investment in property as an alternative to other traditional forms of investment”

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NEWS

e future is today Ronald Attard We are living in an increasingly dynamic, disruptive and digital world. The future, even the near one, will certainly not look like today. In this scenario, rarely has being ahead of the game been more valid advice. From our end, we at EY are doing our part.

Following last year’s Malta attractiveness survey conference unveiling the views of current foreign investors we spearheaded a number of policy initiatives in five sectors: FinTech, commodity trading, Malta as a gateway for Asian eCommerce, logistics and reskilling regular immigrants.

We are encouraged by the active input of public and private stakeholders who came on board as well as by the quality of the final proposals themselves.

I note with satisfaction that there is already a heightened

awareness of FinTech and, following the launch of our policy on logistics, the Chamber set up a specific section to take the ideas forward. Yet more needs to be done and can be done.

Beyond such specific policies, I strongly believe that our country moves forward with determination and speed when it does two things simultaneously.

First, we flourish when we cut through petty and short-sighted politics to see the reality of our national interest for what it is. Our frequently fiery political rhetoric and actions obscure the fact that this country, in contrast with so many others around us, has no real divisions. We have no social, cultural, ethnic or religious issues which undermine social cohesion.

Of equal importance is the fact that, over the last few decades, as market principles took root, we did not lose sight of our sense of social solidarity. If anything, our middle

class is burgeoning. It’s precisely when we treat these realities as the foundations for our future that we made quality leaps forward. I augur that we shall continue to do so.

Then there is the second platform for success complementing the previous one. A look backwards shows that we moved forward quickly and in everyone’s interest when we had the right vision for the future and pursued it against all odds and obstacles: the creation of the welfare state, the

opening up of the markets on all fronts, Europe, the euro, financial services and iGaming, to mention but a few.

To continue to do well, putting vision at the centre of our public and private sector policies must remain a top priority.

With all the above in mind, at this year’s EY Malta attractiveness conference, with the theme ‘The future is today’, to be held on October 7, we plan to take it a notch higher.

“Putting vision at the centre of public and private sector policies must remain a top priority”

For some time now we have been working on a plan, which we will unveil at the conference, to create a number of think tanks with a view to launching concrete proposals to make Malta and its economy even better than they are today.

With the best minds in the public and private sectors on board, these think tanks will become sensitive radars for the best ideas and practices out there and engine rooms for adapting them for our purposes.

The world and its shared economy will not wait for Malta to take its time to update legislation, to respond to the latest trends in technology and ways of doing business.

The future is today. Indeed.

Further information on the EY conference may be obtained at www.eymaltaattractiveness.com.

Ronald Attard is EY country managing partner.

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INDUSTRY FOCUS

e recruitment solution Malta’s low unemployment rate can make finding the right employees extra challenging. But, as these recruitment experts tell e Business Observer, it all comes down to matching industry requirements with the most dynamic and best-qualified talent out there.

Red Executive founder and managing director Martin Collins explains the specific recruitment needs of the IT and commercial sectors.

“Red Executive was formed in April 2009. We started with two people in an office/garage, and have grown to 20 employees with offices located in Sliema and in Glasgow, Scotland. Both offices serve our established client base across the planet.

“Recruitment in Malta, as with all major hubs, has become a candidate driven market. The low unemployment rate has only increased the value of those with sought-after skills, like programmers and engineers, and, in turn, salaries have increased.

“When our clients work with us, it is a partnership. We work closely with them to understand the reason and need behind their business critical hires. We build a solution around their unique requirements by offering executive searches, inhouse solutions, contracting and contingency options.

“Our clients often look for candidates with both commercial- and IT-focused talent, however we are facing difficulties when it comes to finding the right technically-driven talent.

“This is not unique to Malta, though, but is a worldwide issue.

To overcome it, we believe in working with our clients to help them build a positive employer brand, resulting in attracting and hiring the right talent.”

Manpower Malta connects over 600,000 people to work every day, at over 400,000 global companies. Managing director Alexia Balzan Demajo explains how this is achieved.

“Manpower Malta forms part of the Manpower Group – the world’s workforce expert, with nearly

“Opportunities might not always arise at the right moment but, once they do, you shouldn’t hesitate in taking them” 3,500 offices in more than 80 countries worldwide.

“The group offers the full spectrum of workforce solutions needed to address the complex recruitment challenges that exist today.

“Recruitment in Malta is very healthy, with organisations always looking for new talent. It’s fantastic that we have such a low unemployment rate as it clearly indicates that the economy is booming, which in turn creates a scramble by employers to find the resources, and that is where we come in.

“Manpower offers innovative workforce solutions by providing companies of all sizes with a continuum of staffing solutions to enhance business agility and competitiveness.

With our thorough understanding of staffing trends and our deep pool of highly qualified candidates, Manpower can deliver the talent, matching the right individual to

the right job faster and with better business results.

“We design customised solutions and deliver the talent needed to win. Loyalty is one of the most desirable attributes in employees and potential employees. Employers have consistently reported difficulty hiring right-skilled talent, and this trend shows no sign of abating.”

Training organisation Future Focus provides courses at various levels, in different disciplines ranging from management to childcare. As managing director Rosanne Galea explains, the right qualifications can really help employees perform better at work.

“Work experience is no longer enough. Today, individuals need qualifications to help them move into different areas of work, or to advance in careers that require them to perform better.

“Our courses are mainly held on a part-time basis, enabling our

students to combine work with learning. Our centre is located in Floriana, which means it’s convenient and central, and students come from all over Malta and Gozo to attend lessons.

“Our qualifications are accredited and recognised both locally and internationally, and students can begin with a basic qualification and proceed from one level to the next. Programmes offered go up to Level 7 on the Malta Qualifications Framework.

“If you are interested in starting training, then I recommend you start with a meeting with one of our guidance officers – they are trained to give excellent advice and help students apply for the right courses.”

As the association of HR practitioners in Malta, the FHRD provides bespoke accredited courses to those in the industry, in collaboration with the

University of Leicester. CEO Marvin Cuschieri explains the needs of today’s HR market.

“The top jobs of a few years ago do not exist today, and the ones of today exist in a couple of years’ time.

This testament to the fast pace that the workforce faces today and which necessitates continuous lifelong learning.

“My advice to those seeking training would be to take their time but not to postpone indefinitely.

Opportunities might not always arise at the right moment but, once they do, you shouldn’t hesitate in taking them. Quality is also of paramount importance, especially if you’re going to invest a considerable amount of time and money. Today, with the assistance of ICT, the choice of training programmes is almost limitless, however the quality is not. Hence, you should always carefully consider the background and specialisation of the entity offering the training.”

Ceek takes a different approach to recruitment by delivering a highly personal service to their clients and candidates. Company CEO Rachel Pool, who founded the company with Joe Dimech and Beverly Cutajar in 2014, details how the company is guided by its core values of passion, growth, collaboration, quality, integrity and fun.

“We work very specifically to find the right candidate-company fit first time round. In fact, our six specialised recruiters take all the time needed to holistically understand our clients’ specific prerequisites.

“Once we have that understanding, we search through our pool of quality, local and international candidates, and focus on finding the right match. Of course, we’re primarily-focused on skill-set – but we go beyond that. Placing candidates means that we have been entrusted

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INDUSTRY FOCUS

in supporting them with a very personal decision that will affect their future contentment and job-satisfaction levels. We all know money talks; however, personal aspirations, a company’s values and the corporate culture speak even louder – in terms of long-term placement success. Our mantra is to be enthusiastic in our approach, so that we can develop a reliable and open relationship with clients and candidates alike to deliver to their needs. We are focused on the details and always look for ways of how to raise the bar – all while having fun.

“My message for those who want to leave their mark during an interview is to show drive and passion by highlighting and validating your achievements, demonstrating how you can hit the ground running, and asking the right questions to ensure that your aspirations and values are in line with the organisation’s.”

Outsourcing recruitment company Keepmeposted provides a simplified and cost-effective method for sourcing candidates. As managing director Jean Schaak says the company strives to be the link between companies looking to recruit, and candidates searching for new job opportunities.

“In general, we see Malta’s low unemployment rate as a positive thing. With the current growth of companies and new businesses being set up, there is always a large pool of people moving from one company to another. There are sectors that are a little more challenging than others when it comes to sourcing the right candidates, though, as demand for specialised skills is outweighed by market supply, but we are working hard to mitigate this by using different channels and methods to attract a higher skill set. This allows us to continuously target higher-level positions and sectors that we cater for.

“The core service we offer is sourcing potential candidates for our clients in an efficient, cost-effective and simplified manner.

“Having said that what makes people stand out are the finer details – their ability to offer a different edge to the potential employer, while keeping an honest approach.”

As a rebrand of Elite Career Consultants, managing director Francina Moisa explains that Nicholls Moisa now specialises in both finance appointments and legal and business support appointments, as well as executive searches within and outside the financial services sector.

“Malta has attracted a high number of international financial and corporate services companies that require specialist staff, and candidates are thus in the unique position of choosing from more than two potential employers at any given time.

“Within the financial services industry in the months to come, candidate profiling will be primarily focused on technical skills, due to the highly regulated business environment. Employers aren’t just looking for academically astute individuals with qualification from London, Switzerland or Dublin, but individuals who have worked in highly-commercial environments and have added at least one-extra commercial value to bring to their employer in addition to their experience.

“We have a high number of academically- and professionallyskilled individuals locally, but a high proportion lack the international and commercial exposure that many foreign employers require.

It is getting a lot better, though, as local talent is engaging with foreign companies.”

Established in 2007, Konnekt specialises in recruitment for the IT,

iGaming, finance and legal industry recruitments. As head of operations Hazel Refalo details, the company has an excellent track record for growth and delivering exceptional care to employers and candidates, locally and overseas.

“In recent years we noted a gradual shift in the state of Malta’s human resources and, in sectors such as financial services, legal, IT, healthcare and engineering,

demand exceeds supply of skills. By contrast, other sectors’ supply by far exceeds demand. We are also experiencing increased attraction as a country, and many international candidates are looking at Malta as a relocation option. The latter helps to address the lack of technical skill or qualification that exists locally in the industries mentioned above.

“We offer a 360-degree service that connects companies to the best

talent out there. Apart from traditional talent search methods, we support our searches with supplementary services, such as targeted advertising campaigns, psychometric assessments, temporary recruitment and secondments. We also provide onsite support for mass recruitment drives. We are also affiliated with other tools such as payrollmalta.com, salariesinmalta.com and jobsinmalta.com.”

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INTERVIEW

Menu for diversification Economist MARIO VELLA was appointed governor of the Central Bank of Malta after three years as chairman of Malta Enterprise.

He tells Vanessa Macdonald that the Central Bank of Malta’s main concern is to ensure financial stability without slowing down economic growth.

How do you see economic diversification? Are we heading in the right direction or are we leaning too far on services, or particular services?

Diversification is an absolute must. Past assertions about the post-industrial society, whereby vaguely defined ‘knowledge-driven services’ would completely replace industry have thankfully not materialised. That would have been the opposite of diversification.

Luckily for Malta, industrial production and industrial services have not become extinct. They evolved and, although they were overtaken by other economic activities, including financial services in terms of contribution to GDP, they continue to constitute a fundamental element of our economy. Also, and very importantly, they continue to attract export-oriented foreign direct investment.

Had this not been the case, would Malta have withstood the consequences of the 2007-2009 financial crisis as well as it did?

No, hence, at the European level, the importance of being earnest about the re-industrialisation of the EU economies with emphasis on innovation, modernisation and sustainability with industry accounting for as close as possible to 20 per cent of GDP by 2020. This does not mean that we should discourage other economic activities. Diversification itself requires the broadest possible

menu. It means that, if it comes to choices, substance and less volatile economic activities should be prioritised. We appear to be having some success in this area.

The impact of the financial crisis on the banking sector in Malta, unlike in some other euro area member states beginning in late 2009, was very limited because domestic banks, especially the systemically important ones, were prudent in their asset management, preferring to use depositor funds to purchase securities of highly-rated countries, keeping to a minimum their exposure to sovereign paper of high-risk EU peripheral countries while also applying conservative lending policies to domestic borrowers, limiting the increase in non-performing loans.

We are creating a substantial amount of jobs in many sectors. As you very well know from your time at Malta Enterprise, labour is in short supply across the board in all sectors for both low- and highly-skilled jobs.

Is it important from an economic point of view whether jobs are taken up by Maltese or expatriates?

First of all, we need to match supply and demand. Demography is not in our favour. If we are to sustain the current rate of economic growth, we need to ensure that there are enough people capable and willing to go for the jobs coming up on the market. Moreover, they

have to be appropriately educated and trained and must have the skills required for available openings. It is becoming increasingly tight and there is no significant slack left.

We are investing heavily in education and training and we have taken effective measures to boost participation in the labour market and, specifically, to encourage female participation.

It is working but we cannot do without foreign employees. From a purely economic point of view, it does not matter whether you are Maltese or otherwise. What matters is that employers find suitable employees, that those employees pay taxes and social security contributions in Malta, and that they spend at least some of their wages and salaries here.

A recent Central Bank study by Aaron Grech shows that direct taxes collected from foreign workers increased ninefold over the last 15 years and today stand at one-tenth of the total direct tax revenue. But economies do not exist in a social, cultural and political vacuum. And that is another story.

Unit labour costs have been discussed at length with regard to whether productivity is keeping up with them. Others are not so worried as they say that the higher costs merely reflect the higher salaries associated with higher value-added services. What is your stand?

Growth in unit labour costs has been declining steadily over recent years, after peaking in 2012. In the last three quarters, it has been either below or close to zero. That said, competitiveness cannot be measured by a single indicator, especially in a small and fast-changing economy. We need to look at a suite of indicators and refine those trends affecting our economy.

In most sectors, labour costs remain much lower than those in the rest of the EU. The latest Eurostat data indicate that hourly wages in Malta stand at €12.20 as against €21.80 in the euro area.

Since 2004, Malta’s hourly wages have risen from 53 per cent of the euro area average to 56 per cent, hardly justifying the more significant rise in relative unit labour costs. In last June’s Central

Bank Quarterly Review, we published a paper by Noel Rapa that partly explains this paradox.

We are now at a crossroads. The rapid pace of growth of services makes us increasingly dependent on increasingly scarcely trained labour. Against the backdrop of an ageing population, we will increasingly depend on improving labour supply quality. Investment in education and training, together with labour market flexibility, will be key.

The attraction of more investment and a faster uptake of new technologies is increasingly vital for us to remain competitive.

We should also keep our eyes on the prices of whatever impacts the supply of labour. Rents have been on the increase and this will inevitably stimulate higher wage and salary expectations. The increase in the number of foreigners working in Malta raises the expectations of those investing in premises for rental. Steep increases in the cost of renting will make it less interesting for foreigners to seek and keep jobs in Malta and this will exacerbate the labour supply situation.

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INTERVIEW

Is the solution to increase the supply of premises? Are you advocating the development of high-risers? Your predecessor was concerned about property being an ‘asset bubble’?

I do not think I should express myself on the specific issue of the desirability or otherwise of highrisers. Generally speaking, however, demand needs to be matched by supply. This supply needs to be matched in line with what the various market segments can afford.

As regards the possibility of a bubble, the Central Bank is adding more focus in its research functions to monitor developments in our property market. The latest research we have published shows that property prices are not fundamentally misaligned from their-long term averages and are nowhere near the peak of 2007.

It is not the bank’s function to advocate any particular type of development but we will continue to monitor property prices and rentals very closely and will take whatever action necessary within our competence to avoid overheating and unsustainable price bubbles.

Are you happy with the amount of asset buying through the European Central Bank’s asset purchase programme here? Is Malta unique in that a relatively high proportion of Malta Government Stocks (MGS) are held by local banks? How do you see

“e attraction of more investment and a faster uptake of new technologies is increasingly vital for us to remain competitive” this developing if they are expected to reduce their sovereign holding?

The European Central Bank’s asset purchase programme is necessary to support the euro area economy. It aims to create better financing conditions for businesses and to stimulate investment and aggregate demand.

“In Malta, we are at a different stage of the economic cycle. We experienced very high economic growth, driven mostly by booming aggregate demand as a result of rising disposable income. Last year, investment grew by €557 million, or 43 per cent, due to strong capital investment in sectors such as aviation and manufacturing and higher absorption of EU funds.

THE CENTRAL BANK OF MALTA. PHOTOS: MATTHEW MIRABELLI

The European Central Bank’s asset purchase programme in Malta is not as crucial in determining aggregate demand or financing conditions as in the rest of the euro area, therefore, we have not just focused on it. We contributed to set up the development bank and introduced the central credit register to facilitate the granting of credit.

Malta is not unique in having a proportion of government bonds held by local banks. In Luxembourg, for instance, nearly all bonds are held by banks while, in Sweden and the Netherlands, the proportion is similar to ours. What distinguishes us from many other countries is that most of our government debt is held

by Maltese residents, unlike Portugal, Slovenia and Ireland that have close to 70 per cent of their

debt held overseas. We all know what happened to them.

If our banks decide to hold less government bonds, the capital markets are poised to absorb any such developments. Recent government debt issues were fully subscribed and oversubscribed by the private non-bank retail sector.

Former Central Bank governor Josef Bonnici had campaigned for banks to reduce their costs and margins and they were investigated by both the Malta Financial Services Authority and the Malta Competition and Consumer Affairs Authority. Are you content with the outcome?

I must emphasise that bank profitability is important for financial stability. In Europe, one of the main

financial stability risks identified by the European Systemic Risk Board is the absence of bank profitability.

So we must protect the profitability of the banking sector through efficiency gains rather than through dominant positions.

In a market economy, competition is the domain of competition authorities. The Central Bank of Malta’s role in this sense is through moral suasion. My predecessor successfully used moral suasion to achieve better pass through of interest rate cuts by the Central Bank to retail bank rates to borrowers. Further progress was complicated by interest rates nearing zero, whereby banks refrain from passing negative rates on to depositors and, consequently, protect their margins by resisting reductions in lending rates.

The transmission of policy rates to borrowers in the real economy is a complex process and I would recommend readers to go through an excellent analysis of the Maltese case by Brian Micallef, Noel Rapa and Tiziana Gauci in this year’s Central Bank research publication Understanding the Maltese Economy, available online.

Bank charges are best addressed through more competition and we are encouraged to see non-bank actors providing services that, until now, are dominated by banks. This will deliver efficiency gains which should benefit consumers.

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e Business OBSERVER

| September 22, 2016

CASE STUDY

e great exchange Forex trading is responsible for billions of euros of activity every day and attracts millions of investors – including individuals keen to grow their own portfolios. So what’s the secret? FXDD’s REBECCA PORTELLI takes Jo Caruana through the nuances of this dynamic online sector.

The Forex market is the largest, most liquid financial market in the world – with an average € 1,778.8 billion traded every day. This essentially refers to the many currencies that are traded on the foreign exchange market and the fact that much of that activity takes place online.

“All of that activity is fielded through companies like

FXDD, which is a Category Three investment services company licensed by the MFSA,” explains Rebecca Portelli, who heads the company’s finance department.

“FXDD started off as a Forex trading broker in 2002 in New York and, after achieving success there, it was decided the company

should expand its operations into Europe. It was then that Malta was chosen as the ideal hub for this set-up and the local office was launched six years ago. Today, FXDD services clients in over 200 countries.”

Ms Portelli explains that the majority of FXDD’s clients are individual retail clients, as

“e majority of retail traders trade as a hobby”

opposed to companies. Interestingly, this has developed into a thriving market, with statistics showing that retail foreign exchange trading now accounts for 5.5 per cent of the whole foreign exchange market – or a whopping €250 billion every day.

Despite this, the majority of retail traders trade as a hobby,

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September 22, 2016

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CASE STUDY

“even though it can really bolster their income if they are successful”, Ms Portelli says.

Beyond that, the company also works with introducing brokers and money managers, as well as hedge funds and white labels.

“An introducing broker is the customer catering arm for the dealing firm. They drive business to the clearing firm and provide additional customer support for both the client and the dealer,” she explains.

“Introducing brokers are usually compensated as a portion of the spread on each trade their client makes. Meanwhile, a money manager is a person or institution responsible for managing the funds of a third party individual or institutional investor.”

One of FXDD’s key strong points is the fact that its clients – whether retail or institutional – can trade in different currencies in real time. Their trading solutions provide 24-hour Forex trading with competitive pricing, fully automated execution and sales and support in 13 languages.

“Customers can also trade our instruments offered [namely Forex, gold, silver and oil] directly from our FXDD MetaTrader 4 platform,” Ms Portelli says, adding that it is this range of products, coupled with

FXDD’s competitive rates and superior customer care, that really sets it apart.

MetaTrader 4 is FXDD’s core product – a trading platform software for online trading in Forex, contract for differences (CFDs) and futures markets.

“MT4, as it is commonly known, can be downloaded from our website,” says Ms Portelli. “It provides tools and resources that allow traders to analyse price, place and manage trades, while also employing automated trading techniques.”

Reiterating the strength that FXDD has in the market, Ms Portelli notes that much of it comes down to the company’s stringent approach to regulations and requirements.

“It’s my role to ensure we keep up to date and, on top of all, the industry requirements, including capital requirements, competence requirements, our shareholding structure, corporate governance and record keeping. Our department also reports on quarterly returns and any other changes that may be held among the company, as well as on other obligations including tax, VAT, financial reporting and accounting standards. Together, this forms the very backbone of what we do

Successful investing Interested in Forex training? Follow these tips on getting started, from the experts at FXDD: ■ Draw a personal financial roadmap.

■ Evaluate your comfort zone in taking on risk.

■ Create and maintain an emergency fund.

■ Be patient and follow your plan.

“Before you make any investing decision, take an honest look at your entire financial situation, especially if you’ve never made a financial plan before,” Ms Portelli advises.

“The first step to successful investing is figuring out your goals and risk tolerance. You should never invest any funds that you cannot afford to lose. Finally, you should educate yourself on the risks associated with the investment in question. Most importantly, you should always seek advice from an independent financial adviser if you have any questions.”

THE LOBBY OF THE LONDON STOCK EXCHANGE. PHOTO: SUZANNE PLUNKETT/REUTERS

REBECCA PORTELLI, FXDD’S HEAD OF FINANCES.

“Malta was chosen as the ideal hub for FXDD’s European office and, today, the company services clients in over 200 countries”

and enables us to offer the very best to our clients.”

Today, FXDD can be considered one of the leaders in online Forex trading but the company certainly isn’t resting on its laurels.

“Our plans for the future include increasing the number of our personnel and further

expanding our business within the EU. “As we continue to develop, so too will our offerings and technologies, giving traders the opportunity to make the most of the currency market wherever they are in the world,” Ms Portelli concludes.

FXDD Malta Ltd is at K2, First Floor, Forni Complex, Valletta Waterfront, Floriana FRN 1913.

FXDD Malta Ltd is licensed to provide investment services by the Malta Financial Services Authority. Foreign exchange trade carries a high level of risk that may not be suitable for all investors.

e Business OBSERVER

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September 22, 2016

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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

Government’s economic plan A mantra that seems to be adopted by most trade unions is to ‘make hay while the sun shines’. GDP growth figures leave no doubt that the sun is shining on the Maltese economy. So who is to blame unions for trying to reap the fruit of this ideal economic climate for the benefit of their members?

Following the publication of a wish list by the General Workers’ Union, the Union Ħaddiema Magħqudin, the Malta Confederation of Trade Unions, the Malta Police Association and the Malta Chamber of SMEs (GRTU) published their own list of benefits they would like to see the government introducing in a few weeks’ time when it announces its Budget for 2017. There are many similarities in what they are proposing but there also some refreshing new thinking.

The UĦM has once again raised the concept of the living wage, which has been introduced in some US states and in Britain. This measure is not without its risks and it is understandable that employers fear that it could cause more unemployment rather than lift those living on the minimum wage. It is less obvious why the government will not open a debate on this issue now that the economy is going through a good phase.

A more debatable proposal of the UĦM is a wage increase that exceeds the inflation protection provided by the present existing mechanism that the unions are now labelling as ‘outdated’. Wage increases that are not tied to improvement in productivity are the seed of future economic troubles.

No one should be deluded into thinking that economic growth at the present rate is guaranteed for any length of time. Rating agencies in the past appealed to the government to eliminate the inflation protection mechanism as it endangered Malta’s competitiveness. Making this mechanism even more generous could lead to rating agencies changing their outlook on Malta’s future economic prospects.

The proposal by the UĦM for the introduction of the second pillar pension scheme is quite unique because the other unions are not keen on supporting pension schemes that involve a deduction in the take-home pay of their members. Those who see beyond the short term believe that there are strong arguments for the introduction of mandatory savings to build a pension pot.

The more this issue is postponed the more serious will be the problems that future pensioners will have to face on the eve of their retirement from work. The government needs to take the lead and, in consultation with stakeholders, come up with a scheme that guarantees an adequate sustainable pension for today’s workers. Enough time has been lost and saying the matter is now urgent is already an understatement.

CMTU president Martin Balzan was right when he called on the government to table in Parliament every major contract signed. However much the government will try to bury the thorny issue of bad corporate governance in the highest levels of the administration, the more sensible people will demand action on resolving this issue. The bonanza of benefits will be taken for granted a few months after the Budget.

The reputation risk of bad governance will haunt the country for much longer.

The GRTU raises the perennial issue of energy prices and rightly wonders why they are still high. Less expensive power can mean lower production costs for industry and lower prices for consumers.

It is a frustrating reality that most people look at the annual Budget as an annual process that either delivers goodies or belt-tightening measures. Unions will do well to look at the long-term strategic direction that may be announced by the Finance Minister.

The sustainability of the government’s economic plan is one such strategic issue.

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Advertising Enquiries Tel: 21 320713 Email: info@contenthouse.com.mt Advertising Sales: Matthew Spiteri Head of Sales Kurt Cauchi Brand Sales Manager Rose Caruana Advertising Sales Executive Lindsey Napier Marvic Cutajar Advertising Sales Coordinators Printer Progress Press Ltd.

BUSINESS OPINION

New growth path is needed

Philip von Brockdorff The Pre-Budget Document for next year’s Budget outlines the success and challenges of recent years and sets forth the path for further economic growth. The economy is expected to continue growing at rates well above the average of eurozone member states but by a slower rate than in 2016.

This is not surprising considering that the gas-fired power station is nearing completion. In the absence of similar largescale projects, economic growth will continue to rely on the socalled established sectors such as tourism, where results have exceeded all expectations; the retail sector, the financial services sector and remote gaming.

The economy has also been boosted by increased spending by the public sector though the deficit levels have been reigned in. The construction sector’s ‘real’ contribution to the economy is difficult to gauge but there can be no question about the significant cash injection this sector generates.

These sectors remain critical for the economy but the question remains: can the Maltese economy continue to depend so much on them?

The Pre-Budget Document attempts to identify new sectors that could emerge in the years ahead but what the country needs is a new growth path that relies less on tourism and the construction sectors, which have exceeded capacity and make huge demands on our infrastructure.

We all agree that the economy is growing but we are passing by and ignoring a massive amount of so-called externalities. Example of this are the external effects caused by the transport sector. If we measure economic success by the current economic model with its intensive use of resources, high per capita levels of waste generation, high levels of emissions, high dependence on fossil fuels, then this is the price future generations will have to pay for today’s economic growth.

The current economic model lacks effective checks and balances that are needed to avoid undermining our ecology. And, whereas we can claim that the impressive growth rate in our GDP is evidence of a vibrant economy, the current model is simply not distributing wealth justly and equitably. Recognition of this can found in the Pre-Budget Document and we all expect more targeted measures to reduce inequality in the 2017 Budget. Whether this can achieved is another matter.

The dominant paradigm shows no signs of weakening.

The current economic model, fuelled in part by the investment in the new power station and the Individual Investment Programme with its linkages to the property market, remains resilient as ever.

It favours the speculators and property investors often at the expense of sustainability and the ecology.

It is vital, therefore, to consider alternatives to the present economic and business model.

Is this a moral issue? No, it isn’t. It is a survival issue, first and foremost.

Secondly, it’s one of well-being and fairer income distribution.

The dominant economic thinking has taken over our lives. This view is predominantly economic (in the narrow sense of the word) and threatens our own survival as a people with a sense of community and shared values.

As a nation and as community we need to be open to more sustainable ways of doing things fully conscious that every activity or transaction has an economic cost (in the wider sense of the word).

The starting point, to make the transition towards a sustainable economy, is to lay bare the facts.

Second, we need to question the basic assumptions underlying the dominant economic view.

Some way or other, exponentially growing systems eventually

“Time would be better spent if we had to start planning for a more sustainable economy”

always get reduced. Equally, a growing economy will slow down to more realistic levels.

This explains why Malta’s economic growth is projected to be smaller next year.

No matter how much effort and money we throw in to restore what we had and get back to business as usual – we might be able to squeeze out a few more years of growth – time would be better spent if we had to start planning for a more sustainable economy.

The current levels of economic growth may at best persist for a further two or three years but in time will create uneconomic (in the wider sense of the word) growth.

For all the talk of a vibrant Maltese economy this has had a limited impact on poverty and arguably our well-being, if we consider all the negative external effects caused by current economic activity.

This is why we need to explore an alternative economic model, especially one that puts the onus on the government to develop and implement, over the long term, sustainable development strategies that help develop economic activities that stimulate growth without negatively affecting our well-being and with a greater emphasis on social justice.

This is the new economic growth path that would make a real difference in our lives.

Dr Philip von Brockdorff is head, Department of Economics

e Business OBSERVER

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September 22, 2016

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BUSINESS UPDATES

People’s power station The SkyParks Business Centre at Malta International Airport has its own ‘power station’ where visitors can charge their phones while cycling.

The bike station serves the dual purpose of promoting a more active lifestyle and the generation of cleaner energy, mainly among the SkyParks Business Centre and Malta International Airport communities. Developed by the NGO, MOVE, the station incorporates two bikes that allow users to charge electrical devices, such as mobile phones and tablets through the conversion of pedal power into electricity.

By installing the station, SkyParks Business Centre says it is upholding its custom of supporting an environmentally-friendly project each year, in line with its commitment to contribute to a greener and cleaner environment for all.

The first two users were Malta International Airport CEO Alan

Industrial turnover A drop of 3.8 per cent in industrial turnover was registered between April and June this year when compared to the first three months of this year, the National Statistics Office said.

The decline was due to decreases in all the main industrial groupings, with the exception of the energy sector, which rose by 4.1 per cent.

Working-day adjusted industrial turnover dropped by 6.8 per cent when compared to the second quarter of last year.

Meanwhile, figures just published by the EU’s statistics office showed that, in July, Malta had the third largest drop in industrial production among member states with a fall of 3.9 per cent when compared to the same month of 2015.

Customer-first focus in changing environment Almost eight out of every 10 business leaders are concerned with whether their organisation will be able to keep up with technological changes.

Moreover, according to the KPMG Global CEO Outlook, in these turbulent times, businesses are unsure how customer loyalty is or can be affected.

Customer relationship management is the topic of a half-day event themed ‘Customer-first focus in a changing business environment’ to be held at the Corinthia Hotel, St George’s Bay, on September 30.

To register, send an e-mail to eventsmt@crimsonwing.com.

Attendance is complimentary.

Borg and Medical Services Foundation CEO, Carmen Ciantar (picture). Vodafone Malta CEO Amanda Nelson then tried out the station and pedalled her way to a fully-charged mobile phone.

Mr Borg said: “We’re excited to be launching this initiative,

especially considering that it is one of the first of its kind in Malta.

Using human power to generate energy is an innovative concept which is revered globally, with this form of power being hailed as the way forward in the field of alternate energy generation.”

20 years of excellence Sullivan Maritime celebrated 20 years of maritime services by announcing a revamp of their company brand and image.

The aim is to give the globallyreputed company a fresh look as the younger generation is being coached and groomed to take over the family business.

A new company logo was unveiled to business collaborators and customers during the 20th anniversary celebration held at Madliena Lodge. Guests were presented with a glimpse into the new rebranding that will give a fresh and younger look to the company.

Sullivan Maritime CEO and founder Ernest Sullivan announced that his sons, Nigel and Karl (above), are in the process of gaining the required experience before eventually taking over the leadership of the business. Their aim will be to make Sullivan Maritime smarter and more automated as well as to cater for the evolving industry’s needs.

The Sullivans have worked very closely with the prestigious Grimaldi Group based in Naples, with both families enjoying an outstanding business relationship for over 50 years.

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e Business OBSERVER

| September 22, 2016

STOCK MARKET REVIEW

e interim reporting season

Edward Rizzo Most companies that have their equity listed on the Malta Stock Exchange have a December yearend and, in accordance with the Listing Rules, their interim financial statements for the six-month period to June 30 must be published by August 31.

The interim reporting season has therefore come to an end three weeks ago. It is not my intention to review the financial results of all the companies whose equity is listed on the Malta Stock Exchange. Instead, I believe it would be worth looking at some of the most significant share price movements and shifts in investor sentiment towards a number of local companies following the publication of their respective interim results.

Few market followers may have noted that the share price of RS2 Software plc has been the worst performer in recent months and has declined by 21.9 per cent since June 30. The equity is therefore in ‘correction’ territory, having declined by more than 20 per cent since its recent high. Although it is debatable whether a single factor has led to this correction, I believe it is fair to assume that the decline in profits registered during the first half of the year would have negatively impacted sentiment towards the equity.

Although revenue was stable at just over €11 million and includes the licence agreement of €1.5 million signed with a German client in the first half of the year, pre-tax profits declined by 47.9 per cent to €3.4 million. The decline in profits was due to: (i) the unfavourable impact of foreign exchange movements, mainly GBP, as a sizeable part of their income is generated in GBP; and (ii) higher costs arising from the new offices in Philippines and Denver (US) together with a larger staff complement and an increased spend on marketing initiatives as the company is gearing up for its strong business pipeline.

However, the half-year financial report published by RS2 made several references to a “strong business pipeline”, “significant potential for growth” and results

“Following the mixed signals from the interim reporting season, the market’s attention will now turn to ad hoc announcements from various companies especially RS2 and Medserv” “on track for the full year”. The CEO of RS2 held a meeting with financial analysts shortly after the publication of the results and mainly focused on the upcoming business pipeline. Radi El Haj stated that various contract negotiations are at an advanced stage and should be concluded by the end of 2016 in both the licensing area, as well as the processing

business. The CEO also indicated that a number of the new clients being onboarded emanate from the US, as well as Asia Pacific. This would represent a breakthrough for the company in these new geographical markets.

Another equity which ranks among the worst performers during the third quarter of the year is Medserv plc whose share price

has declined by 13.4 per cent since June 30. Shortly before the publication of the June 2016 interim financial statements, Medserv announced that with respect to the contract awarded to its subsidiary company in Portugal earlier this year, due to unforeseen circumstances, ENI has been prevented from carrying out exploration activities as planned.

Medserv had clarified that despite this delay, it continues to operate the base in Portugal and provide related services to ENI. The income that was envisaged to be generated from this exploration activity was an important part of the financial projections for 2016 and was thus a disappointing revelation which must have dented investor sentiment. Moreover, similarly to RS2, the financial performance during the first half

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September 22, 2016

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STOCK MARKET REVIEW

of the year would have disappointed many investors as Ebitda dropped to €3.35 million compared to €6.56 million during the first six months of 2015, while pretax profits amounted to a mere €0.28 million which is substantially lower than the €4.5 million figure registered in the first six months of 2015.

The major delays were due to less rigs available for exploratory drilling offshore Libya, the lack of offshore activity in Cyprus and the delays in Portugal. The financials in the first half of 2016 were also impacted by two significant non-cash items amounting to €860,000 materialising from the METS acquisition.

Medserv also convened a meeting for financial analysts to discuss the factors which impacted the performance during the first half of the year and to provide an update on its business development initiatives.

Among the various areas being targeted, Medserv’s chairman, Anthony Diacono, made specific reference to the imminent adjudication of the tender submitted by Medserv and other service providers for works in Trinidad and Tobago as well as an upcoming tender to service international oil companies in Egypt. While news on the Trinidad tender is imminent, further progress on possible work in Egypt and other territories is expected in the months ahead. The chairman of Medserv also remarked that the business that did not materialise during the first half of 2016 is not lost business but business that is merely postponed until 2017 and future years.

While RS2 and Medserv would have disappointed various investors, leading to a downturn in their share prices, the financial performance of GO plc, on the other hand, was a positive one.

The news of the improved profitability helped GO’s equity recover by more than 10 per cent during the past three months, thereby partially recouping from the setback in the share price following the revelation of the voluntary bid by Tunisie Telecom at a significant discount to the prevailing market price at the time.

The interim financial statements of GO plc included the

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. © 2016 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

MEDSERV RANKS AS ONE OF THE WORST PERFORMERS OF THE THIRD QUARTER OF THE FINANCIAL YEAR.

“e interim reporting season is also an important period for bond issuers” consolidated figures of Cablenet in Cyprus following the increase in GO’s shareholding to a majority stake as from January 1, 2016. In fact, the six-month results of the GO Group were positively impacted by a €6.1 million gain arising from the acquisition of the majority stake in Cablenet. This

pushed up the pre-tax profit figure by 31.3 per cent to €17.1 million.

Meanwhile, the Ebitda of the GO Group including Cablenet (of which GO only owns 51 per cent) improved to €29.9 million during H1 2016 from €25.1 million during the first six months of 2015.

Following the takeover by Tunisie Telecom, which now holds 65 per cent of the share capital of GO plc, it would be beneficial for the market to understand how the new majority shareholder intends to pursue its strategy going forward. In recent press releases, Tunisie Telecom had indicated that the rationale for the acquisition of GO was to create a leading trans-Mediterranean telecoms platform spanning North Africa to Malta, Cyprus and Greece.

Overall, following the mixed signals from the interim reporting season, the market’s attention will now turn to ad hoc announcements from various companies especially RS2 and Medserv as they both prepare to onboard new clients in various new geographical areas and await the adjudication of important international tenders.

While the timing of such announcements will vary depending on contract confirmations, the next important event on the investor calendar would be in mid-November for those companies that have continued to publish updates to the market which under previous Listing Rules were referred to as Interim Directors Statements.

In May 2016, a number of companies had disclosed important

information to the market via such updates including details on some key performance indicators.

This was a welcome initiative which would hopefully repeat itself in the weeks ahead with companies providing information on their financial performance during the third quarter of the year and their expectations for the full-year.

The interim reporting season is an important period in the investor calendar not only for equity issuers but also for bond issuers.

Following the recent article on Hal Mann Vella Group plc, further information on the performance achieved by a number of other bond issuers will be revealed in the weeks ahead in order to assist several investors who may not fully comprehend the details within financial statements.

e Business OBSERVER

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September 22, 2016

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BUSINESS UPDATES

Nicholls Moisa – legal, finance and executive recruitment

His heart stopped!

Will you save him?

Sudden cardiac arrest (SCA) is the most common cause of death from heart disease, accounting for more than 63 per cent of all cardiac deaths. In SCA, the heart suddenly stops beating normally.

Without a blood supply, oxygenstarved organs are irreversibly damaged and will quickly fail... within a few minutes.

The only effective treatment for SCA is defibrillation. External defibrillation provides a brief, effective therapeutic electric shock through the person’s chest to the heart, restoring the heart’s normal rhythm. While people with heart problems are at high risk of death from SCA, it can strike anyone, anywhere, at any time without warning, and in some cases is the victim’s only symptom. Even young people who appear to be healthy, extremely fit athletes and people with no history of heart problems can be victims of this silent killer.

The definitive survival treatment for an SCA victim is a defibrillation shock. Cardio Pulmonary Resuscitation (CPR) or ‘chest compressions’ and ‘mouth-tomouth’ breaths only temporarily

circulate blood to vital organs, and on their own do not restore a patient’s heart into a healthy rhythm – a shock is needed… and fast!

The average national response time for the arrival of emergency personnel equipped with defibrillators is usually greater than 10 – 15 minutes – this is too late! This is why immediate access to defibrillators on-site is extremely important.

Each minute of delay in delivering a defibrillation shock to a cardiac arrest victim reduces the chances of survival by 10 per cent, meaning that, if a casualty is not

shocked within five minutes of collapse, he/she will have less than 50 per cent chance of survival.

■ When a sudden cardiac arrest (SCA) strikes, the first few minutes are critical to survival. In the chaos and confusion surrounding the event, it can be challenging for the average rescuer with only minimal training in CPR and AED use to remember and follow the correct procedures. It’s during these critical minutes that the Powerheart AED G5 becomes priceless. For more details contact Technoline Ltd on 2134 4345.

EY’s Malta Attractiveness Survey and National Conference Over the last few years, EY’s Malta Attractiveness Survey and National Conference has acquired a reputation as Malta’s largest business and investment forum benchmark.

Attracting over 500 delegates, the event provides private and public stakeholders, as well as prospective investors, with up-to-date independent and gamechanging information on Malta’s investment attractiveness on both the national and sectorial levels.

This year’s conference will be held on Friday, October 7, at the Westin Dragonara Resort between 8.30am and 4.30pm. Over 60 speakers will address the conference, including Malta’s top decisionmakers in the public and private sectors, such as Prime Minister Joseph Muscat, Opposition leader Simon Busuttil and various ministers. This

year’s international keynote speaker is Jeremy Paxman, the world-famous BBC journalist and television presenter.

The conference will include both plenary sessions and a range of interactive sectorial breakout sessions.

The event is being accredited with structured CPE qualifying for the attainment of professional development competencies in terms of the MIA CPE Regulations.

The participation fee is €290 (inc. VAT), including conference refreshments, lunch, all administration charges and the complimentary tablet containing all conference material. Complimentary parking will be available at the Merkanti car park.

Early registration is highly recommended by visiting eymaltaattractiveness.com.

Nicholls Moisa is a headhunting and recruitment firm focused on the finance and legal divisions within the financial services sector and executive search in general industry and commerce.

Nicholls Moisa recruits for the following specialist roles: ■ Finance, accounting, auditing, advisory, tax; ■ Legal, including in-house legal counsels, with a particular focus on corporate, commercial and financial services law; ■ Corporate administration, compliance, company secretarial; ■ Risk, investment, treasury, shareholder services, operations, analysis, regulatory; ■ Portfolio management; ■ Fund accounting, administration, management; ■ Custody, trust, fiduciary, depositary; ■ Business support; ■ Executive level roles: stretched across financial services and general industry and commerce sectors.

Nicholls Moisa holds a 95 per cent instruction to completed client assignment ratio and a 96 per cent candidate retention ratio with their

MANAGING DIRECTOR FRANCINA MOISA

clients. In addition to a through selection criteria, Nicholls Moisa is focused on both technical and soft skills and candidate referencing at various levels. The firm has a varied recruitment methodology, which includes both active (database and targeted advertising) and passive searches (headhunting, direct approach, networking and referrals, Boolean string searches), allowing clients to get an objective view of the skillset in the market and to appoint the best person for their business.

Nicholls Moisa is at 53, Dingli Street, Sliema. Call 2778 1381/ 9939 5315 or visit www. nichollsmoisa. com.

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e Business OBSERVER

| September 22, 2016

BUSINESS UPDATE

Strategic recruitment to attract the best talent The skills graduates acquire during University and develop within the first few years of their working life has changed drastically over the last 20 years.

Computer science and digitally-focused industries contribute a greater percentage to the GDP year on year. This has caused a monumental shift in the skills the economy requires, leading to a ‘War for Talent’.

This war is not fought on a battlefield. It’s fought at a more strategic level; you work to position your ‘employer brand’ in such a way that it helps you attract the best talent.

Attracting the best talent requires a business to consider the following questions: Does your business

see beyond the bottom line? Do you want each employee to play an integral part in your businesses success? Can you help each individual you hire to achieve their career aspirations and provide an environment where they can flourish? Most importantly, can you take the values you have built your business on, relay them positively to the market and help your business attract the best talent?

Recruitment has become incredibly strategic in its core value to a business. Does your business have the expertise to be victorious?

Call Red Executive on 2258 3318, e-mail info@redexecutive.com or visit www.redexecutive.com.

JobsInMalta – Malta’s highest-ranked jobs board jobsinmalta.com would like to thank all its clients, jobseekers and partners for making the network Malta’s highest-ranked jobs board according to Alexa.

We are extremely pleased with the results and feedback we have received from our clients and jobseekers over the past few months, and it’s with that motivation that we continue to serve our community by bridging the information gap between employers and jobseekers.

Jobsinmalta.com is a low-cost recruitment solution for agencies and direct employers to create, edit and publish their vacancies on multiple local job boards and social networks, through a single online platform and payment system.

HSBC Malta puts Advance customers a step ahead with new privileges HSBC Bank Malta is offering HSBC Advance for free to eligible customers and is introducing a number of benefits to its proposition.

All HSBC Advance customers will be upgraded to the Visa Platinum credit card while continuing to benefit from free travel insurance, special offers on personal loans and mortgages, financial planning and international services. The Visa Platinum credit card also opens up access to a world of offers within the Visa Luxury Hotel Collection.

Key daily banking benefits include a dedicated 24/7 priority telephone banking service, free access to HSBC Internet Banking and Mobile Banking App, an Advance-branded international debit card with a fee-free first supplementary card, and cash withdrawals from HSBC ATMs anywhere in the world at no charge.

HSBC Advance VISA Platinum card holders will be able to make use of attractive bonus point reward scheme redeemable locally at Marks & Spencer, Scan Malta and as cashback on any airline ticket. The HSBC Home & Away privilege programme also offers a variety of discounts locally and abroad.

Customers who pay in a net income of €25,000 per year into their HSBC account, or €35,000 if applying jointly with partners, benefit from HSBC Advance for free. More details can be found on the dedicated website www.hsbc.com.mt/advance or by phone on 2380 2380.

HSBC HAS MADE ADVANCE MORE ATTRACTIVE TO CUSTOMERS.

We work hard to ensure that all job opportunity information is available to all of those eligible to work in Malta is in the most effective and helpful way.

Our social media network spans over 30,000 members and increases daily. We are also continuously working towards growing our network of advertising partners.

Employers are invited to create an account, and job seekers are encouraged to sign up for e-mail job alerts by logging in to jobsinmalta.com.

We are here to support you throughout your process. Please do not hesitate to get in touch on e-mail hello@jobsinmalta.com or call 2258 8056.