The Business Observer 9th March 2017

INTERVIEW

Issue 71

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March 9, 2017

Distributed with Times of Malta

Keith Fenech is single-handedly trying to reverse decades of neglect in Mrieħel, and has already made several inroads, just a year since the Mrieħel Enterprise Zone Foundation was set up. see pages 10 and 11 >

NEWS ere are almost 4,000 places in Malta advertising on AirBnB, exclusive research obtained by CasaRooms has found, but is supply growing faster than demand? see page 3 >

‘Malta could be next Oman’ – Medserv Vanessa Macdonald ‘Malta could become the next Oman’, according to Medserv chairman Anthony Diacono, who was referring to the island’s potential to replicate his company’s recent success in securing a multimillion-dollar deal in Oman.

Medserv’s Middle East subsidiary, METS, was awarded a five-year contract by Japanese Sumitomo Corporation, for the supply chain management of Oil Country Tubular Goods (OCTG) to Petroleum Development Oman, a

joint venture between the government of Oman and Shell. The contract, the largest ever won by the Medserv group to date, has a five-year extension option.

METS will be opening up a new facility of 117,000 sq.m. at the new port of Duqm in Oman in order to cater for the volumes to be handled as a result of this contract.

Mr Diacono said that if the authorities could allocate more space to Medserv in Malta, the island could “become another Oman” – if “Medserv did its homework”.

Medserv acquired METS in the UAE for $45 million a year ago, the result of a strategic decision taken in 2015 to diversify: geographically, in terms of client base, and in terms of product. The Middle East now contributes nearly 50 per cent of Medserv’s turnover reducing its dependence on North Africa from a risk management point of view.

The portfolio of services bought in the Middle East are in demand in other parts of the world – Continued on page 3

FEATURE Female leaders share their insight into what can be done to improve women’s participation in economic activities. see pages 5 and 6 >

OPINION Ahead of today’s meeting in Brussels, Commission president JeanClaude Juncker warns that the EU cannot afford to revert to isolationism and protectionism. see page 17 >

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NEWS

Medserv seeking inroads to Egypt Continued from page 1 particularly because of METS’s so-called VAM licence, a relatively rare certification which allows it to test and do maintenance on oil pipes.

Soon after the acquisition, Medserv secured a contract in Malta which was carried out through the expertise of people brought over from the Middle East. Mr Diacono said this type of work would ideally be carried out in a freetrade zone or customs area to spare clients the red tape associated with normal ports.

He admitted that Medserv had looked into the government’s request for proposals for a logistics hub in Ħal Far – which could have posed a solution – but decided that it “did not fit into the way Medserv want to do business”.

“There is too much baggage,” he said, declining to comment any further. There were no bids for the hub, and a new RFP is currently open.

“It is very important for Malta to build on its reputation for being a good place to do business. If we get that right, then it is easier for me to sell my product to the international market.

If my country’s reputation is not good, then I would not be able to do anything here.

“And by reputation, I mean that the ports actually work, that the rates can be slashed, that we can be competitive so that our prices will beat those of the ports around us.”

Mr Diacono said that the Oman contract was one of the main reasons that Medserv went after METS – apart from its strategic importance in giving a presence in the Middle East and the clients it brought with it.

“We knew about this contract and have been working on this for the past year. It was a calculated gamble. We had the advantage of having bought a company that was well known and well respected. It also had the VAM licence – so we were in a strong position.

“Investors will now realise why we paid what we did for the company,” he smiled.

Medserv’s presence in the Middle East has come at an important time: it is what they call ‘easy oil country’ because it costs much less to bring up fossil fuel. The next big step will be to solidify its position in all the three countries where it is already present: Oman, UAE, and Iraq. The latter had been fairly static but with BP and Lukoil moving back in, Medserv last year started to quote again.

“We are cautiously optimistic that the worst may be over and that Iraq may contribute towards the business.”

It has also been making progress in Iran, although its hands are bound by the difficulty

of ensuring that operations are fully compliant with US sanctions.

“It looks good. A site has been identified and drawings and feasibility studies have been done. I think we are compliant but no final decision has yet been made,” he said.

To reduce compliancy risks, Medserv decided to go it alone, using agents – rather than partners – to help navigate the Iranian system.

“We definitely do not want to expose ourselves to any possible compliance issues as many of the sanctions are down to people; we try to be as careful as we can but you never know in life so we try to minimise the risk.”

The company has not limited its geographical expansion to the Middle East and has also been trying to make inroads in Trinidad and Tobago. It got to the final stages of a tender there and although it was not successful, the experience did raise its profile. In fact, it has submitted another tender and will be participating in another two in the coming months.

“I hasten to add that we have not won any contracts yet but our business takes time. You are dealing with projects which cost billions of dollars and if we are get it wrong, it would have a huge impact. So we are building up our credibility. I am still cautiously optimistic that Trinidad will come through.”

Medserv is also hoping for momentum to build up in Cyprus, where everything was in mothballs since the low-point for the industry in 2015 which saw almost all exploration come to a halt. There was the added political complication of deciding which port should be used to support the offshore industry.

However, Medserv’s client was given acreage in the latest round of bids which made the operation in Cyprus particularly interesting thanks to its proximity to the Zohr field of Egypt – an offshore natural gas field discovered in 2015 by concessionaire Eni, which is estimated to be the largest-ever natural gas find in the Mediterranean Sea. Mr Diacono said that he expected operations to resume in the third or last quarter of this year.

Medserv is also working hard in Egypt, and expects to put in an offer for the first tender within the coming weeks.

“This meant a lot of preparatory work over the past year. We managed to identify a site, not easy in a country where security is so important and everything is controlled by the military.

You have to approach this in a different way.

But we are making progress and hope to break into this market,” he said.

3,824 properties on AirBnB Vanessa Macdonald There were almost 4,000 properties in Malta available at the end of December to host tourists via AirBnb, according to research obtained by CasaRooms.

This marks a dramatic increase over the past five years, when around two dozen were listed on the site when it first went international.

It is also nearly four times what it was just two year earlier.

However, if hosts are listing their property in the hope of raking in guaranteed money, they will be surprised to learn that demand already far outstrips supply, with occupancy in 2016 ranging from 23 per cent in the winter months to a high of only 71 per cent in the peak month of August.

The average for the whole year was only 44.9 per cent occupancy.

The number of properties is far less than the 2,600 licensed with the Malta Tourism Authority last November but, when he had given these figures to The Business Observer, MTA chief executive Paul Bugeja had challenged the assumption that all AirBnB hosts were unlicensed. Under pressure from the Malta Hotels and Restaurants Association which has been complaining for years of unfair competition, the MTA

has increased its enforcement officers from eight to 18.

However, being licensed does not automatically translate into tax compliance, and the MHRA has repeatedly warned the government that it was losing taxes from hosts who did not declare their income, whereas its members paid their due.

CasaRooms research, however, sheds light over the real impact of AirBnB on hotel accommodation.

Managing director Thomas Cremona pointed out that in the best case scenario, with full occupancy throughout August, this represented 39 per cent of the bed nights for that month.

But while hotels traditionally lower their rates in winter and low season, the already-low AirBnB rates do not have much flexibility, meaning the premium for staying in a hotel will be much narrower.

Airbnb currently lists over three million options, in more than 65,000 cities and 191 countries.

CasaRooms is holding a conference entitled Optimising Rental Property Earnings at the Palace Hotel in Sliema on March 22 during which this and other research on the state of the market will be presented. For more information contact info@casarooms.com

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FEATURE

A more balanced workforce From childcare centres and better maternity leave to longer opening hours for grocers, a number of factors have helped to raise the female participation rate to 53.8 per cent in 2015 – but that was still 4.9 percentage points below the EU average. e Business Observer asked female leaders to name one thing that could support this upward trajectory.

President Marie Louise Coleiro-Preca

US Ambassador G. Kathleen Hill

While we are proud there have been beneficial developments in the role of Maltese women in the workforce, there is still much that must be done.

The increase in the number of women in the workforce is encouraging, as a result of focused policies by our authorities including the provision of free childcare, which was a catalyst. This is proof that when there is political will and determination, things do change. We need more political will and determination.

However, Malta’s score in the political and business world is only 28.2 per cent according to data from the EU’s European Gender Equality index. Only five per cent of board members are occupied by women in the large listed companies in Malta, while the EU average is 23.3 per cent. Women in top positions like CEOs, in Malta’s top 20 largest government corporations and agencies, has gone down, from 29 per cent in 2012 to 16 per cent in 2014.

There is a silver lining in the form of education. While the overall female employment rate in Malta is 53 per cent (according to the EU’s Labour Force Survey, 2016) data from this year’s Eurostat tells us that the employment rate of young female graduates, aged between 25-29, is 94 per cent.

We must continue to encourage and support active educational opportunities for our women and our girls. The effect of women’s full participation in the workplace and business sectors means that the country will reach its utmost potential, which will have an impact on the reduction of poverty and the tensions it creates in society while also enhancing the prosperity of Malta.

Women’s perspectives create a more holistic and innovative environment for success, both on a national and international stage. This is another impetus for the sustainability of our competitiveness as a country.

Elena Grech, head of the EC Representation Greater facilities which allow for a better personal life and work balance go a long way to encourage more women to follow studies, professional careers and to work outside the home. With the female population at the University of Malta having surpassed 50 per cent, and in which the country is investing a lot in terms of education, it is definitely not an option to have all these ladies choosing to follow a career and postponing or renouncing to their right to have a family.

It is, however, telling of the predominant cultural mindset that, whenever one talks of familyfriendly measures, it is usually women who come to mind. Happily, this is slowly changing and the Maltese percentage of working women has increased considerably, although there is still a lot more that needs to be done.

To be fair, this mentality is not limited to the stereotypical Southern European countries: I believe that the vast majority of women across the world would naturally like to have the opportunity

to stay at home to look after their kids for more than the period of maternity leave allows. The difference is that in countries further north women have a freer choice and also support to go through with their decision – it is okay if they want to stay at home to be full time mothers until their children go to school if they want to (national social security systems allow them to do so), but it is equally okay if they want to go back to their full-time jobs after three months and leave their children at childcare facilities, which remain open as long as the average working hours require.

Certainly longer school hours, late shopping possibilities, greater flexibility in terms of working conditions, as well as equal pay and career advancement opportunities would make it easier for women to go out to work.

However, the biggest change needs to come from within. Women have the right to feel fully empowered and free to choose their own way in life without feeling judged either way.

Mentoring and portraying positive role models are crucial to increasing female participation at all levels of society.

We have a duty to educate our youth – male and female – about the importance of inclusion, equal opportunities, and equal partnerships between men and women. We owe it to future generations.

Political and economic leaders, educators, and parents must speak with one voice to break down gender stereotypes definitively. Boys should be free to hang out in the kitchen and girls should be free to play with toy cars and trains.

The message we send to our girls and boys will shape their vision of the future. Gender should not define us the way it has historically, and children should not feel pressure to conform to traditional gender roles or behaviours.

Last week, I participated in the mentoring and careers day organised by Business Professional and Women (BPW Malta). I was delighted to interact with the future generation of women – hard-working, intelligent, determined go-getters who will change the dynamics of society in general in the not too distant future.

Pairing girls with successful women who did not allow gender to define them is sure to inspire the girls to achieve their full potential and make the motto “I will succeed because I deserve to” a reality.

continued on page 6

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FEATURE

Better female labour participation continued from page 5

68,298

Amanda Nelson, CEO – Vodafone Malta Flexible working and making part-time opportunities is key – but more than that. Employers need to believe in their female workers and that they can handle responsible, managerial positions while balancing that with their family commitments, especially for ladies returning to work after taking a maternity leave break.

Often these women take smaller, or less responsible roles because they think it will make life easier, or their company doesn’t want to give responsibility to people who are not constantly “in the office”. This is a big shame. It’s a huge sacrifice to return to work after having a child and compromises have to be made – however, I’ve always felt that if you’re going to make that sacrifice, you might as well do it for a role and a career that’s worthwhile.

I had four maternity leaves at Vodafone and was very supported to return to bigger and bigger managerial roles, helped with the option to work flexibly and spend some days working from home. I often hear of employers using a woman working reduced hours as an excuse for not giving responsibility or a promotion. And even the ladies themselves “self-select themselves out” of interesting, developmental roles because they think it’s the right thing. Often they do it without even talking to their employer first to see what support may be available to help them.

We need leaders and line managers in organisations to recognise the hugely valuable contribution women working part-time or flexibly can make. And we need women to step up and ask their employers for those interesting, developmental roles and not take a step back.

If we can get this balance and support women to keep growing their careers at this critical stage, business will have much more balanced and diverse (and female!) leaders in the future. Vodafone is an employer that’s committed to this – I wouldn’t have four children and be a CEO aged 40 if that weren’t the case!

Number of women working, out of a total workforce of 182,052 September 2016

53.8% Female activity rate, up from 44.7% in 2011 December 2015

65.8%

Female activity rate (aged 25-54) December 2015

10.6% Gender pay gap December 2014

Aqubix swamped by requests Aqubix, whose product KYC Portal was featured in The Business Observer on January 26, has been swamped by requests for demonstrations following managing director Kristoff Zammit Ciantar’s presentation to 1,500 delegates at Finovate Europe in London.

Finovate is the largest showcase of innovative technology for the fintech industry, attracting banks and financial service providers.

“We have a visit booked to an international bank based in Brussels in a few weeks’ time and we have demos booked with banks and insurance companies in Germany, the Netherlands, Belgium, Thailand, UK and US. It went fantastically

well!” he told The Business Observer on his return. After his seven-minute demo, Aqubix had people queueing at its booth from noon till 6pm – long after most of the other exhibitors had dismantled their stand.

“We were batching interested parties together as an open discussion to reach as many people as possible... We have some very interesting world-renowned names lined up for demos both over Skype and at their offices,” he said.

The company is already taking measures to upscale to be able to handle the possible orders.

Aqubix developed KYC Portal last year to deal with the ever-increasing compliance demands. It has three unique features

“People were queueing at its booth long after other exhibitors had dismantled their stand”

which makes its approach much more holistic and automates the risk-assessment process. The first is its ability to create organigrams – showing the complex relationships across entities – of, say, 200 links in just 10 seconds.

The second feature is the ability to interview your subjects through the system, recording the interview in real time within the system, and with facial recognition.

The third innovation is that compliance is usually done at jurisdiction level, but companies that operate across borders can use KYCP’s ‘global dashboard’, which enables the head office to monitor activity across these different jurisdictions – in real time.

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INDUSTRY FOCUS

Bringing it all together Choosing a reliable freight and logistics provider makes a considerable difference to the client in terms of costs, reliability, time frames, quality, etc. Leading operators identified some of the key factors when making a choice.

Thomas Smith Group Joe Gerada Managing director

How important is it for a company in the logistics industry to offer a holistic service that covers all type of cargo – be it sea, land or air?

A logistics provider needs to be able to present a full solution to his customer, therefore it follows that it is very important to be able to provide all modes of transport in addition to warehousing and all that goes with it.

While this may not mean that the logistics supplier does this via services which he himself operates, he needs to be able to take responsibility, and ensure a high level of quality for all he provides. That clearly means that it is not simply a matter of “trading in shipping services”, i.e. purchasing and selling whatever is available – as many do. A serious supplier needs to be in full control of what he is providing, and have a proper system of governance of his own subcontractors and suppliers, so that he can deliver to a standard his client associates him with, and expects of him.

Express Trailers

Franco Azzopardi Chairman and CEO What are the current trends in the local market i.e. as the economy continues to evolve have the demands and requirements of the thousands of businesses operating in Malta changed over time?

That Malta is an island and that robust and reliable connections between Malta and mainland Europe will always be needed, is a reality that will never change.

The shift that we as Express Trailers have been seeing is not solely related to the type of commodities that are being transported (from textiles in the 1970s to pharma in more recent years for example), but also in the quality expectations and risk mitigation mindset that more sophisticated importers and exporters expect. This means that today,

most businesses’ concern is no longer just related to how their cargo is going to be transported from A to B but who will be doing it.

This is why we don’t just talk about transport but we look at logistics: this includes all the set-up and work that takes place behind the scenes and which most customers are not always aware of. Is the logistics operator offering a safe environment for my cargo? Can he guarantee a reliable and timely pick-up and delivery?

Is my transportation company equipped with the right quality certified trailers?

Are human resources skilful and apt at effectively managing all the intricacies of customs in various jurisdictions? Is the right packaging being applied? More importantly, can my operator handle all the logistic risk implications in case something goes wrong?

The requirements of our customers may intrinsically have not changed much but the environment in which logistics operators like us operate has become sophisticated trying to match the demands of our customer, be it JIT supply chain or regulated cold chain.

What really changed is that standards need to be high in an increasingly competitive sector. Only companies that keep investing in resources can keep up with this evolution.

Freight Zone John Zerafa Director

Key players operating in the local transhipment and logistics industry in Malta are today offering services not only for Malta inbound trades but also cross trades where Malta will not be the final destination. How important is it to offer such a one-stop and holistic approach for your clients?

In a globalised world, a freight forwarder must be able to move cargo from any point of origin to any destination. It is crucial for a freight logistics company to be backed by global partnerships and agents so as to provide alternatives when asked for practical solutions. This is even more so when services have to be provided in complex and challenging regions in terms of routing, transshipment, warehousing, customs procedures, airfreight, sea and road transport.

An international freight forwarder should therefore specialise in particular regions and get in-depth working knowledge to be able to offer solutions that would support clients with their specific Supply Chain requirements.

In 2010, FreightZone’s global dimension took it to the world’s second largest economy, China. For the last 10 years the company has acquired an in-depth knowledge

“e opportunity to use Malta as an international hub for logistics for goods transitting in and out of Europe and into Africa has been discussed for a while and it is time to pursue this opportunity in earnest. ”

related to the supply chain sector in the region. The contracts varied from monitoring manufacturing processes for renowned European manufacturers to handling of project cargoes, warehousing solutions and transshipment operations for both air and sea shipments.

Our presence in Asia has proved to be an asset and enables us to offer a comprehensive service to clients seeking both professional advice and market knowledge in the region.

BAS Ltd

Mario Debono Deputy general manager Certain industries require a swift and efficient logistical service that goes beyond normal transhipment and freight services.

How do courier services fit in?

We recognise that certain companies need a bespoke solution for their mission critical shipments. A solution that cannot be addressed through the traditional express services being offered by the integrators. To address this, we launched DHL Global Forwarding’s SameDay product.

With SameDay, shipments of virtually any size or weight will be picked up and delivered to destination within hours.

The service utilises a ‘next flight out’ concept to more than 220 countries and territories with a door-to-door service, 24 hours a day, seven days a week, 365 days a year.

Customers benefit from proactive tracking and monitoring from pickup through delivery, web tracking and reporting capabilities combined with proof of delivery confirmation via phone, fax, e-mail or cell phone.

Carmelo Caruana Co. Ltd Davide Biron CEO Hili Logistics

You hear consumers complaining that delivery of orders through local retail agents is taking much longer than promised. This is a chronic problem for a small island like Malta that is not part of the European mainland and it is certainly a serious problem that can lead to serious loss of repeat business for local agents/retailers. How can a strong and reliable partner in the shipping and transshipment industry improve the turnaround of delivery of goods? In other words, can a reliable freight partner improve the client satisfaction of a local business concern?

Increasing the volume of transshipment across product categories can help make goods more readily available for the local market.

The opportunity to use Malta as an international hub for logistics for goods transiting in and out of Europe and into Africa has been discussed for a while and it is time to pursue this opportunity in earnest. Malta could compete well with Middle Eastern ports and some example of this is already evident in some sectors.

Of course, any plan to this end needs to include a more efficient, larger and modern port infrastructure and warehousing able to host various types of products.

Attracting more shipping line routes is key to ensure the appropriate connectivity and this must also be high on the national agenda.

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INDUSTRY FOCUS

Maltapost

Mark Vella Chief commercial officer As the economy evolves so does the need for thousands of businesses operating in Malta to have a reliable strong courier partner.

How can a strong and reliable courier partner make a difference for local businesses?

The local economy is evolving in line with international trends enabled by online technology giving easy access to global market. This along with more convenient and secure methods of payment and delivery approaches is contributing to a significant rise in e-commerce activity. It is vital in today’s economy that local retailers embrace this phenomenon and broaden their high street presence by targeting international audiences.

To achieve this objective, vendors need to invest in their online retail presence and in a logistics partner who can provide tailored and reliable e-fulfilment services such as storage, handling and delivery of items to consumers. Over the past years Maltapost has been investing to provide such comprehensive e-fulfilment services. With the largest delivery team on the island and a local network that boasts four logistics hubs, 40 post offices and various partnering subpost offices, Maltapost provides an unrivalled reach in both local delivery and high street presence. Furthermore the company has recently launched a nationwide network of secure, around the clock automated parcel lockers and provides for online payment and cash-on-delivery arrangements with both B2B and B2C exigencies in mind. Maltapost’s mature and comprehensive international delivery network provides reliable delivery of items at cost-effective rates and efficient transit times to global destinations.

A strong logistics partner like Maltapost enables retailers to overcome their developing logistical challenges, streamline their business and focus on the evolution of their core business.

Express Logigroup Jonathan Vella CEO

In view of the fact that companies requiring freight services are so diverse, each with their own specific requirements, how important is it to offer specialised and customised freight solutions to your clients?

The freight industry can be quite challenging and apart from making sure

that you provide the right solutions, you should also focus on value in order to grow your customer base and expand your reach.

That is why your focus should always be to satisfy your customers’ requirements by offering superior services and support, coupled with affordable, practical freight solutions.

O&S Shipping

Kurt Camilleri Managing director There are different trades and sectors within the logistics and transshipment industry. What is the significance of engaging a strategic and efficient forwarder in your business and what difference can a leading forwarder bring to the table?

The local freight forwarding culture is somewhat different from the overseas one where the overseas freight forwarder

is usually supported with freight agency commissions (FAC) from carriers and operators.

However, this methodology is not applied locally due to the size of the market which contributes to direct competition between both entities; moreover ship agents and operators have built their own in-house forwarding companies over the years putting standalone forwarders even more out of their interest.

Considering this, such local freight forwarding companies have to strive to find new ways and means on how to offer a competitive rates backed up with high end services.

Freight forwarding companies in Malta are usually small organisations with vast knowledge and expertise within the supply chain and can provide peace of mind that your goods will arrive at the correct destination on time and avoids any disruption to your company’s production or services.A freight forwarder can save you a lot of time and allows you to concentrate

on other areas of your business. Many businesses believe that they can save money be making arrangements for international transportation themselves but this is often a false economy.

Logistics arrangements can be very time-consuming to do and may even be more expensive.

Freight forwarders offer unique benefits to businesses that seek a high level of organisation, transparency, and flexibility. Forwarders can offer simplicity in an industry that does have so much variety and volatility.

Rather than deal with all these “moving parts” yourself, hiring an experienced firm takes many of the aggravating administrative decisions out of your hands.

While you’ll still have full control over your shipments, you won’t have to bother with the time-consuming task of vetting carriers, comparing prices, and negotiating services.

You’ll have one vendor, one point of contact, and unlimited flexibility.

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INTERVIEW

One man and Mrieħel Vanessa Macdonald How many men does it take to change a lightbulb? Well, contrary to the old joke, only one – Keith Fenech – and it was actually 45 bulbs.

Mr Fenech was appointed the chief executive officer of the Mrieħel Enterprise Zone Foundation last August, taking over the reins of the organisation set up in March 2016 as a ‘joint venture’ between the government, represented by Projects Malta, and 18 operators from the private sector.

He knew the area well – he had spent some 20 years working for Methode – and was well aware of its shortcomings, shortcomings which had defied various attempts to solve over the decades.

Fixing the faulty street lighting was just one example of what was needed: an empowered individual with the backing of both the government and the weight of businesses like Farsons (which gave the foundation offices for 40 years free of charge), PwC and Gasan.

It took one meeting with Enemalta’s chairman Fredrick Azzopardi to get the lights fixed, but Mr Fenech did not stop there and has identified that another 78 new lamps are needed to complement the ones already there. And looking ahead, the foundation is planning to issue a call for LED lighting for the long term.

The foundation gets its clout not only from its founders but also from good old cash. The government promised to match the endowment ‘fees’ paid by the members into the foundation, up to a maximum of €400,000 a year for three years. The original members paid up €5,000 each, with the government matching that €90,000. However, Mr Fenech refused to let the rest of the government’s money slip through his fingers and managed to persuade it to put €330,000 towards resurfacing of the notoriously treacherous roads.

“It is the first time that we have managed to get something moving in 25 years!” he said, shaking his head. “We spent €8,000 as an emergency measure to fill the worst potholes

and have now identified four roads to be resurfaced over the coming weeks. They need to be completely rebuilt, one day. But one thing at a time. We did also manage to persuade the authorities to bring the Mrieħel Bypass higher up the ranking of Ten-T projects funded by the EU – meaning that it will be tackled before 2025, and not after,” he said.

One of the problems with Mrieħel – as opposed to other industrial estates – is that almost all the land is privately owned (not to mention that it falls under no fewer than three local councils). Only the former Dowty site belongs to the government, currently being developed as a zone for food production.

The zone is enormous – the same size as Valletta – and has been defined for the purpose of the foundation as spanning from the Flamingo offices all the way to the Malta Financial Services Authority, with two small pockets of residential areas excluded.

Within that area are an enormous range of operators, from top financial services firms and banks, to light industry and warehouses.

That was actually one of Mr Fenech’s first questions: who are they? A survey was commissioned from Misco which found that there were no fewer than 255 operators, of which 175 were microenterprises employing fewer than 10 employees.

With only 18 on board at the outset – some of which only had land in Mrieħel and not operations – his challenge was to persuade the rest to pay an endowment to the foundation. His best argument was to show them that this would be worth their while and he set about quick wins even before his actual contract started.

“Fly-tipping and dumping is a serious problem in the area and needed immediate action.

You cannot expect the local councils to pay for this service together with the residential waste, as is happening today,” he insisted.

He decided to first clean up the area of accumulated rubbish and then to find a longterm solution. Over four weekends in July and August, 186 tons of waste were collected – including abandoned boats and even cars – making a significant difference.

“With hardly any space on which to develop permanent car parking, Keith Fenech came up with an interim solution” It is now working with the Cleansing Department on a pilot project over six months to collect waste on Friday afternoons, covering east and west on alternate weeks, part paid by the foundation. The time will be used to identify what the waste is, so that a suitable permanent solution can be found, which will include door to door collections, bulk waste, sweeping and street washing – and how much it will cost.

He also started to look at the problems faced by employees: lack of parking and no alternative as public transport is limited to the outskirts of this vast site.

With hardly any space on which to develop permanent car parking, Mr Fenech came up with an interim solution: he identified four pieces of undeveloped land scattered across Mrieħel whose owners did not intend to touch for at least three years, and is now negotiating with them. Malta Industrial Parks, in the meantime, is working on at least one permanent one.

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INTERVIEW

Public transport might be easier to solve. A survey was carried out which found that over three-quarters used their own transport to get to work – and almost half of the respondents said there was nothing which would entice them to use public transport. However, 19 per cent claimed that direct routes from their hometowns to Mrieħel might encourage them to leave their cars at home – a statistic that has now been fed back to Malta Public Transport for consideration. In the meantime, more bus stops within Mrieħel are being looked at.

The foundation has already outgrown its remit and at the recent annual general meeting it was decided to give it more powers to procure on its own behalf. The board of administrators – chaired by Louis Farrugia – also agreed to establish three different endowment bands for operators to become members, based

on the number of employees as well as the footprint occupied. Discounts are even being offered in the early years to encourage take-up.

Since so many of the tenants are microenterprises, the government is also putting up €50,000 to pay for their endowments, while part of PA fees for applications in the economic zone will also go to the foundation.

That still leaves around 80 tenants who will need to be persuaded, not all of whom have welcomed the intrusion.

Mr Fenech is not deterred. He is working on signage, a stormwater plan, input into a master plan to be driven by the Planning Authority and new branding.

Will it be enough? Only time will tell, but with several highrises and a comprehensive business park planned, the foundation has not come a moment too soon.

“Since so many of the tenants are microenterprises, the government is also putting up €50,000 to pay for their endowments”

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CASE STUDY

Zara outlet to be one of largest in Europe PG Holdings has submitted an application to build up over the footprint of the old Alhambra cinema in Sliema, enlarging its current Zara outlet by a footprint of some 900 square metres, and making it one of the largest in Europe.

The current store is spread over two floors with a few flats overlying them.

However, the air space behind them – the old cinema – belongs to the group.

Chairman John Zarb, who was appointed last November, said that the location was unbeatable and was considered one of the best on the island for retail.

The group did not dive in but first identified what the restrictions would be for the site and then submitted an application to the Planning Authority to add six or seven floors behind the flats – meaning they will not be visible from the Ferries.

The shop will have two floors dedicated to women, one for children, one for men, and one for Zara Home – with the rest to be used as stores.

Assuming that the permit process goes as intended, construction should start by the end of this year. The existing store will be closed for the shortest time possible for renovation, with the two then being linked and opened by the end of 2018.

Zara remains one of the mainstays of the group, with 15,000 customers a week.

“Zara wanted to increase its presence and our discussions were based on whether we should have multiple outlets or one larger one. The overseas model is to go for larger units of up to 5,000 square metres…

“There is an enormous range of Zara products that we cannot currently exhibit due to space, which will change dramatically with the new outlet. We think this will make more sense than to have two or three small shops,” Mr Zarb said.

The man behind PG Holdings is Paul Gauci, who has a soft spot for the Zara

franchise – which he built up on his own.

His story is the stuff of legend. He and his siblings started off with a small outlet in Birkirkara, Big Ben, which has expanded into arguably one of the largest retail operations on the island.

Around nine years ago, the brothers split the businesses and he took over the Alhambra building in Sliema. He was also one of the lead investors and drivers for the investment in the Westin, a shareholder in Banif Bank, as well as building up many other businesses in the meantime.

Over a decade ago, he and his brotherin-law Victor Grech opened Pavi supermarket, at the time a groundbreaking investment. The vision was to have a supermarket unlike anything seen in Malta till then: purpose-designed and built on one floor.

He believed that supermarkets needed to attract visitors and that the business would come from retail outlets associated with the anchor tenant.

“It had to be a destination where someone would come to shop and be able to leave with a large proportion of their day-to-day requirements – instead of hav-

ing to go to separate outlets like a butcher, a greengrocer, a florist, a stationery and so on,” Mr Zarb explained.

This business model led to Pavi, which has 20 outlets apart from the supermarket, as well as specialist sections like the butcher, health food outlet, the bakery and so on which are operated by third parties, which pay rent and have a revenue-share agreement.

“This is all invisible to the client – who only receives one bill – but the employees work for the third parties and Pavi remains responsible for the overall quality and monitors the prices, since a concessionaire which is not profitable would affect the whole supermarket. We want to be sure that they are offering good value for money,” Mr Zarb said.

Mr Gauci eventually bought out Mr Grech in August 2015, and just a few months later opened Pama in Mosta, based on the same business model.

The supermarket is slightly smaller than Pavi, and is also on one floor, but it has a much larger parking area spread over two floors, with twice as many spaces as Pavi’s 500. The concession relationships at Pavi

“In hard times, people spend less and go for cheaper items. But we feel it less than others…

It is much easier to cut down on eating out and on clothes, for example”

“THE SUCCESS OF PAMA HAS EXCEEDED OUR WILDEST EXPECTATIONS.”PG HOLDINGS CHAIRMAN JOHN ZARB

worked so well that most of them followed the group to Pama. In all it has 40 outlets (including a Zara Home) – many in a separate mall opened late last year – as well as the operators within the supermarket.

“The success of Pama has exceeded our wildest expectations – well, perhaps not Paul’s,” he smiled, “but those of other people.”

Pavi handles 35,000 customers a week but Pama has 50,000 – one of every nine people on the island.

“His vision has been vindicated. Rather than focusing on higher margins on our goods, we prefer to focus on volume. We have three advantages: the economies of scale and purchasing power due to our size; cash which allows us to offer firm and regular credit terms to our suppliers, which we adhere to religiously; and Auchan, which we represent in Malta and which gives us a source of costeffective products.

“On most products we believe we can match our cheapest competitors while still offering a wide range. People like to have variety. You would probably be surprised to learn that since Lidl opened in Qormi, Pavi’s sales surged as many customers go to both outlets. Lidl has around 1,000 very price competitive products and good offers – but most customers want to buy more than just that. So they also go to Pavi,” he explained.

He acknowledged that people like the ability to do a megashop once a week, especially since so many women are now working. But where does that leave small shops in village cores?

“The convenience of a one-stop mall with parking is obvious. Having said that, there is still a market for the convenience shop around the corner for your daily needs. We have to accept that their numbers might diminish and that the margins on their prices may be higher than other

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CASE STUDY

places’ – but the convenience justifies that premium. But something has to give and some of them will suffer.”

Mr Zarb, who spent almost 40 years with PwC, explained that food was one of the least susceptible sectors to a downturn in the economy.

“In hard times, people spend less and go for cheaper items. But we feel it less than others… It is much easier to cut down on eating out and on clothes, for example.

“Conversely, prosperity may be good for the economy as a whole but not for us… It means there is more disposable income so people eat out more!” he smiled.

The biggest challenge for Mr Gauci, now 63, is to ensure that the business survives him. His daughter Claire is in her 20s now, and although she is involved in the firm, it is still too early to know what her plans are for the future.

Mr Gauci wants to extricate himself gradually from the business, giving him more time to work on new ideas, but he wanted to ensure that PG Holdings would continue to flourish. Over the past year, he has been building up an executive team, with ex-BOV head Charles Borg as chief executive officer, and Mr Zarb as chairman, with four other non-executive directors on the board.

“But these changes can be reversed and dismantled in a moment unless there is continuity and determination. This is the challenge he now faces. How do you perpetuate this culture so that it can continue without him?” he pondered.

ARTISTS’ IMPRESSION OF THE NEW ZARA OUTLET IN SLIEMA

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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

Taxpayers deserve better Once the political dust about the donations (or otherwise) from the db Group to the PN has settled, perhaps we will be able to take a step back to consider the wider implications of what has been happening in this country, not just under this administration but under the previous ones too.

The entire system of public procurement is so terribly flawed that it is hard to know whether it can ever be repaired. In spite of EU directives and scrutiny by the Auditor General, in spite of attempts to instil governance, the system is clearly not working.

What is the ideal outcome? That the government identifies a need, allows those in the field to come up with the best ideas, assesses their offers in terms of short and long-term impact, ensures sustainability, and negotiates hard.

It is not rocket science. It applies as much to buying a can of tomatoes in a supermarket as it does to a wastewater plant. The perfect market works on the basis of choice as a way to stir up competitive juices which dampen the negative forces of greed and short-term profits.

In theory, that is what the government should do. But the system has failed on a number of occasions. The first failing is when there is only one bidder. In a ‘take it or leave it’ situation, how are taxpayers going to be reassured that they are getting the best technology, at the best price, and for a reasonable period?

This was the case in the contract for an IT system to take over utility billing: only one bidder, and you only have to say ‘tamper proof’ smart meters to raise eyebrows, never mind the other delays and fabulous functionalities that have not yet materialised.

The second failing is when there is no bidder, as happened with the logistics hub. Instead of trying to assess why such a lucrative site should not be appealing enough to justify the €25,000 tender documents, it reissued the same bid. This is akin to advertising a car in The Sunday Times of Malta for weeks without getting any nibbles and putting the next advert in at exactly the same price with exactly the same wording. It is either utterly stupid – or sinister.

The third failing is when the bids are manipulated to fit, whether by pre-tailoring the specifications or by tinkering with the price, as when a wastewater plant contract was chopped up to fit the budget, akin to buying the car chassis and body to be able to afford it, but then having to pay separately for the engine and wheels to be able to use it.

The fourth failing is when the bidder is chosen and the price established – but the credit terms are so favourable that the winner is basically getting it for free, as has happened with the ITS site (which was also compromised in the first place by having only one bid).

Serious companies in Malta – and their overseas partners – have long shrugged and accepted that some contracts are simply not really up for grabs. They just do not bother to bid. It is like a vacancy within your company when someone has already been boasting on their FB page about getting the position and the advert is just going through the motions to comply with the collective agreement.

The implications of this are profound and go well beyond bloggers and politicians and parties trying to score off each other. It means we the taxpayers are paying more than we should and getting shoddier products, while those who managed to manipulate the system to their benefit are laughing all the way to the bank.

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Advertising Enquiries Tel: 21 320713 Email: info@contenthouse.com.mt Advertising Sales: Petra Borg Urso Brand Manager Lindsey Napier Marvic Cutajar Advertising Sales Coordinators

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BUSINESS OPINION

CBM to boost economic analysis and research publications Aaron Grech This year the Central Bank of Malta is making some important changes in its economic publications.

The bank publishes on a regular basis three publications that look at macroeconomic developments, namely the Quarterly Review, the Annual Report and the Economic Update.

The scope of the Quarterly Review, like other such reports prepared by central banks, is mainly focused on analysing in detail recent economic developments particularly in Malta. This year the Quarterly Review will once again start to be published four times annually, but it will no longer be printed. The Quarterly Review will feature a streamlined economic commentary with more space for discussion of economic research. From time to time, it will also reproduce public statements by the Governor.

“e Central Bank of Malta will be holding a research symposium on the topic of sustainability of macroeconomic conditions” On the other hand, the Annual Report gives an account of the bank’s operations during the previous year and presents its annual financial statements. It also contains an analysis of domestic and international economic and financial developments during the previous year. The Annual Report is available from the bank’s website and in printed form.

The Bank also publishes on its website a monthly Economic Update, covering the latest economic and

financial developments. In August 2016, the Bank undertook an overhaul of this publication so that it focuses on a standard set of economic indicators, which are typically not covered in the Quarterly Review, such as official industrial production indicators, retail sales, administrative data on international trade, employment and unemployment and the monthly evolution of the government’s Consolidated Fund.

Starting this January it also includes an indicator of business

conditions computed by Bank staff which will serve as a coincident indicator of economic activity.

While the scope of the Bank’s regular publications, like other such reports prepared by central banks, is focused on analysing in detail recent economic developments, the Bank also publishes on its website research publications that deal with topical issues. Some of these are summarised and included in the Quarterly Review and Annual Report.

The Bank’s Working Papers series refers to technical research papers written by the Bank’s economists.

These are published to further debate on the topic covered. The Policy Notes series refers to short briefs on selected policy issues aimed at a wider audience. Occasionally the Bank commissions or sponsors the publication of working papers by external researchers.

To mention a few examples, last year it published a study on the diversification of the Maltese economy, a review of the reforms that are leading Malta’s female participation rate to rise, an assessment of the impact of the pension age changes on potential output growth, a study of the impact of foreign workers, a detailed analysis of the competitiveness of manufacturing and of services, an assessment of property price misalignment and an in-depth evaluation of the improvement in Malta’s current account.

The Central Bank also organised a research symposium last June at which it launched a publication, Understanding the Maltese economy, that looked in depth at the transformation of the Maltese economy in the first decade since EU accession.

This year the Bank will be holding another research symposium, this time on the topic of sustainability of macroeconomic conditions, and will publish an extensive research report on the subject. This will assess the longterm growth prospects of the Maltese economy, evaluate the sustainability of our external accounts and of public debt, while looking at developments in financial conditions and property markets.

Besides this, the Bank plans to publish research on a number of topics. These include a study that will evaluate the relative size of different economic sectors in Malta taking into account their multiplier effect, and policy notes that will assess trends in the financing of companies in Malta and the country’s process of economic convergence to the EU average.

The Central Bank looks forward to interested stakeholders engaging in these and other discussions on economic issues in Malta.

Aaron Grech is chief officer economics at the Central Bank of Malta.

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OPINION

Empowering European industry to thrive in a changing world

Jean-Claude Juncker As EU leaders gather in Brussels today, they will take stock of Europe’s efforts to create jobs, generate growth and improve competitiveness. European industry has a key role to play, as the largest economic activity representing almost 20 per cent of Europe’s gross value added and more than 15 per cent of our employment.

My father was a proud steelworker. Like in many other places in Europe, the local factory was the glue that held our community together. It was the largest employer and the fuel for the local economy.

The factories of today look different to what my father knew. And yet, Europe’s industry remains just as important. Our industries are strong leaders in global markets. They provide employment for over 50 million workers in Europe. They include brilliant innovators and entrepreneurs who are seizing new opportunities.

Our industry’s strength has always been its ability to adapt and innovate. In a competitive and fast-moving global environment, we must draw on our strengths – our deep pool of talent, our educated workforce, our traditions of innovation and not least 500 million consumers in the Single

Market. It is especially important that our factories are at the cutting edge of clean technologies and energy efficiency so they can reduce costs and be less dependent on third country suppliers. They must embrace the opportunities provided by the blurring of the traditional lines between products, services and the digital economy. We must collectively invest in our people, equipping them with the skills for a changing workplace and empowering them with social rights fit for changing employment models.

Our regions and their old industrial sites should be transformed not just to create expensive riverside apartments but also to create new jobs for local workers.

The European Commission’s industrial strategy is supporting this transition to a modern, clean and fair economy, with a comprehensive and results-oriented approach across different policy areas.

Industry should seize the opportunities and make full use of the EU’s investment solutions – in particular the Investment Plan for Europe, what some call the ‘Juncker Plan’. This plan has provided finance for the Nord Pas-de Calais region to support its move to a low-carbon economy. It has helped Polish steel wholesalers to introduce new services and create new jobs. It has supported the construction of a new bio-product mill in Finland as well as Europe’s first facility

GERMAN CAR MANUFACTURER MERCEDES BENZ FACTORY IN RASTATT, GERMANY. PHOTO: KAI PFAFFENBACH/REUTERS

for recycling and re-melting titanium metal.

Whether it is 3D printing, bio-based plastics for packaging, or new systems to cut water use in the chemical industry, the EU will continue to fund and invest in pioneering innovation and European industry.

We will also continue to need investment from abroad. And that requires us to remain open for business, and keep foreign markets open to European business.

But I am not a naïve free trader. We need to continue to show our teeth, taking measures against unfair trade practices like we did when imposing anti-dumping duties on Chinese steel, sweet corn from Thailand, or biodiesel from the US, Indonesia and Argentina. We will also continue to use the possibilities within State Aid law to support research and green investments. And we will promote our strategic autonomy and industrial strength in the fields of space and defence, rather than relying on the US, China or Russia.

“With more than 50 per cent of EU businesses already part of global value chains, we cannot afford to revert to isolationism and protectionism”

With more than 50 per cent of EU businesses already part of global value chains, we cannot afford to revert to isolationism and protectionism. Our industry and economy depends on free, fair and sustainable international trade. Take the recent trade agreement reached with Canada, one of our most like-minded partners. It is the most progressive trade deal we have ever signed and it will have a transformative effect: exports to Canada already support around 900,000 European jobs and by removing tariffs we will help our businesses save over €500 million a year.

Last week I presented a White Paper on the future of Europe offering avenues for unity at 27 [member states]. I hope that on this basis we can have an honest and open debate on how much the EU can and should do to support industry and to harness globalisation, for example in the areas of fiscal, education or social policy.

One thing is clear to me: I can see no scenario whatsoever in which economic nationalism can be consistent with the idea of Europe or with the prosperity of its people. I believe in a Europe with a common, robust industrial policy, which ensures success even in challenging times. This policy plays a central role in the Europe that I am fighting for.

Jean-Claude Juncker is president of the European Commission

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STOCK MARKET REVIEW

THE WALL STREET BULL IN THE FINANCIAL DISTRICT IN NEW YORK. PHOTO: BRENDAN MCDERMID/REUTERS

8-year anniversary for Wall Street’s bull market “In the EU, there was a relatively slow policy response to tackle the after-effects of the 2008/2009 economic and financial crisis” Josef Cutajar March 9, 2009 marked the start of the current bull market in US equities. Following the well-documented events leading up to the US sub-prime mortgage crisis and the near collapse of the entire global financial system, on March 9, 2009 all three main equity indices in the US – the S&P 500 (S&P), the Dow Jones Industrial Average (DJIA) and the Nasdaq 100 (NASDAQ) – reached their low and since then started an upward trend still active until today.

In financial circles, a bull market is a term used to describe a period when the value of a particular asset class (namely equities, bonds, commodities and property) or the performance of a certain economic sector goes through a cycle of rising value, optimism or expansion.

In particular, a bull market in equities refers to a period during which share prices, in general, rise by 20 per cent or more from their previous low. In contrast, a bear market is a period of widespread investor fear and pessimism during which the value of stock markets decline by 20 per cent or more from their previous peak.

Naturally, it is impossible to determine one single factor which triggers the start of a bull market or the end of a bear market cycle. History suggests that it is the combination of a number of events that normally spark the beginning and end of such cycles.

Looking back, it may be argued that the current bull market has three main distinguishing features. During the past eight years, all three main US equity indices registered double-digit compound annual growth rates (CAGR). The tech-heavy Nasdaq performed best with a CAGR of over 22 per cent per annum followed by the S&P (+17 per cent p.a.) and the DJIA (+15.6 per cent p.a.).

In absolute terms, during this eight-year period, the NASDAQ rose by over 400 per cent as the index surpassed 5,300 points from 1,043.87 points on March 9, 2009 while the S&P and the DJIA advanced by 250 per cent and 220 per cent respectively.

Furthermore, the gains in absolute terms of the S&P (the best index to gauge the wider US economy) ranks as the third highest out of all bull markets since the S&P’s inception in 1923.

The 250 per cent rally over the past eight years is also the second sharpest gain since the index was expanded to 500 components in 1957. The strongest bull market occurred between December 1987 (nearly two months after “Black Monday”) and March 2000 (ahead of the burst of the “dot-com bubble”)

as the S&P advanced by a spectacular 582 per cent during this 12-year period. In this respect, the current bull market is the second longest on record followed by the bull market between June 1949 to August 1956 during which the S&P gained 267 per cent.

The second characteristic that makes the current bull market in US equities particularly remarkable is its resilience to withstand a number of significant hurdles. Within the US, it is worth recalling the 2011 debt-ceiling crisis that steered the world’s foremost credit-rating agency – Standard & Poor’s – to strip America of its “AAA” rating for the first time in history (the current rating of “AA+” is still in force till today).

Eventually, this was followed by a period of intense bipartisan manoeuvring in Congress to avoid an unwanted “fiscal cliff” in 2012 (the term coined by the former head of the Federal Reserve Ben Bernanke to describe a looming situation of notable government spending cuts and tax increases) and a 16-day federal government shutdown in 2013 – the third longest in US history.

Yet, the biggest challenge to Wall Street’s eight-year bull market came from across the Atlantic. In the EU, there was a relatively slow policy response to tackle the after-effects of the 2008/2009 economic and financial crisis.

Moreover, the rigid model on which the monetary union is structured and a

European banking sector which was still undergoing considerable restructuring translated in a European-wide sovereign debt crisis. From late 2009 to 2012, five Eurozone countries (Greece, Portugal, Ireland, Spain and Cyprus) had to seek bailout assistance.

In the meantime, the risk of contagion to other members of the eurozone was so high that, on more than one occasion, the very existence of the single currency and the entire European project were called into question.

In the political arena, Russia’s annexation of Crimea in 2014 and the UK’s vote to leave the EU last year were other major events which could have derailed the progress of the current bull market.

Moreover, equity markets also rallied despite the continuous threat of large-scale organised terrorism which, in the last two years alone, caused chaos in three capital cities right at the heart of Europe – Paris (twice in 2015), Brussels (March 2016) and Berlin (December 2016).

Growing tensions in the Middle East and the surrounding regions (including the serious situation in Syria), the evolution of nuclear proliferation in the Korean peninsula and the outbreak of Ebola across West Africa and beyond in 2014 also contributed to periodic spikes of volatility in equity markets which posed serious challenges to the continuation of the current bull market.

The bull market was also resilient to the substantial decline in the price of oil. Though many economists argue that a lower oil price is beneficial to economic growth as it frees up additional disposable income and strengthens the level of private consumption, on the other hand, it has a considerable impact on inflation while the sector as a whole contributes materially to the general level of macro-economic activity in the US.

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STOCK MARKET REVIEW

Furthermore, several other countries across the world are highly reliant on the oil sector (particularly emerging economies), which in turn impinges greatly on the general state of health of the world economy, the extent of capital flows and trade as well as currency fluctuations.

Against this backdrop, the determining factor that continuously led to a strong upward trend across equity markets was the unprecedented level of ultra-accommodative monetary policies and numerous stimulus programmes adopted by the world’s major central banks (the Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan) to revive economic growth and inflation following the worst economic and financial recession since the Great Depression in 1929. Indeed, not only has this fact shaped the course of the bull market’s trajectory to-date, but also instilled a completely new world economic and financial order based on yet untested concepts. In this respect, it is worth highlighting the substantial drop in yields on income-generating financial instruments all over the world which completely altered the way in which the risk-reward trade-off in investments is evaluated.

Meanwhile, the lifestyle of all those people who, like pensioners, are mostly dependent on income derived from their savings had to change to a new reality which, just a few years back, was simply unimaginable.

The most recent phase of the current bull market has been truly remarkable. Against all previous projections, the surprising victory of Donald Trump over Hillary Clinton

in the US Presidential election held on November 8, 2016 sparked an incredible rally in equities as investors started to speculate on the new administration’s policy of boosting economic growth mainly through fiscal measures like higher spending on infrastructure and the military, looser financial regulations and cuts in corporate taxes.

Indeed, in less than four months, the S&P and the Nasdaq gained 11 per cent while the DJIA climbed by 14 per cent. All three indices recorded new all-time highs.

In particular, the DJIA closed in positive territory for 12 consecutive trading sessions between February 9 and February 27 this

year, matching its longest streak ever set in January 1987.

On March 1, it even breached the 21,000 mark – just five weeks after surpassing the 20,000 level on January 25.

The way in which the current bull market made history and exceeded levels previously regarded as extremely difficult to reach brings to the fore the question of the sustainability of such a strong upward movement.

Many financial analysts argue that a correction is now long overdue.

This is even confirmed by some interesting statistics which show that, on average, a bear market occurs approximately every 3.8 years.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (Rizzo Farrugia) 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. Rizzo Farrugia, its directors, the author of this report, other employees or Rizzo Farrugia 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 Rizzo Farrugia, 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. © 2017 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

Whether the current bull market still has life to live or not is impossible to say. One thing however seems to be for certain – that the new financial and economic environment following the 2008 recession may indeed represent a new era for capital markets.

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BUSINESS UPDATES

New Isuzu D-Max to be launched in Malta GasanZammit is introducing the new and improved Isuzu D-Max to the local market in a special event on Saturday March 11 at the ASM racing circuits at Ta’ Qali.

This launch will be the first to be held for Isuzu D-Max in Europe.

This new and improved model combines energetic sports styling, with a fresh exterior look, an updated interior, and an engineering innovation with a new design. It offers inspired versatility, excellent fuel efficiency, power when it’s needed most and first-rate durability, making it a truly modern vehicle. Moreover, it is lighter, quieter, more economical, and kinder to the environment. Exterior styling changes include a bigger, bolder front grille, redesigned headlights with LED daytime running lights, new bumper bars, and restyled alloy wheels.

With Euro 6 emission standards, the car delivers better fuel economy alongside lower exhaust emissions.

“Isuzu’s aim is to create the new standard for pickup trucks, whose basic function is to carry a maximum load efficiently, economically and reliably,” said Toru

Makinouchi, the CEO of Isuzu Motors International Operations in Europe, who will also be attending the launch.

The new Isuzu D-Max will be available at the GasanZammit showroom in Mrieħel as of Saturday March 11. Visit www.isuzu.com.mt/dmaxlaunch to find out more.

Ganado Advocates’ annual bankTraining Programme ing and finance law seminar in London for BOV representatives

Ganado Advocates, in collaboration with the Malta Bankers’ Association, is organising its 4th Annual Banking and Finance Law seminar, a yearly appointment for leading lawyers and officers working at the forefront of banking and finance law issues.

Conrad Portanier, head of banking at Ganado Advocates, announced the participation of Andreas Witte – principal legal counsel, Directorate-General Legal Services at the European Central Bank – at the seminar.

Mr Witte will be sharing his insights on the new environment of banking supervision, taken from a stakeholder’s perspective.

The seminar will also host other guest speakers synonymous with the banking industry in Malta.

These include among others Bernadette Muscat (director, Legal and International Relations Unit, MFSA), James Bonello (secretary general, Malta Bankers’ Association) and Catherine Formosa (consultant, Ganado Advocates).

DR CONRAD PORTANIER AT THE 3RD ANNUAL BANKING AND FINANCE LAW SEMINAR 2016.

“Acting as a common platform for discussion, the seminar will bring together lawyers and other banking professionals who want to keep abreast of the impact of a changing regulatory environment, bank insolvency and internal

corporate governance,” Dr Portanier added.

The seminar will be held on the March 16 at Le Méridien St Julians Hotel & Spa from 1.30pm to 5.45pm. For further information, visit www.ganadoadvocates.com.

Six Bank of Valletta employees from across the retail network were invited in February by BOV Asset Management Ltd to attend a two-day training programme in London, at Insight Investment Management (Global) Ltd and Waverton Investment Management Ltd. This initiative forms part of BOV Asset Management’s mission to train BOV authorised representatives not just locally but also through direct links with its fund managers for the foreign fixed income as well as equitybased funds.

“These training programmes are now an integral part of the company’s annual events,” said Mark Agius, executive head – BOV Asset Management. “During the past 20 years, a number of

BOV employees had the opportunity to meet top fund managers from both Insight Investments and Waverton Investment Management.

“The experience serves to broaden their perspective, as well as enabling them to share best practices with their overseas.”

Mr Agius also noted that such initiatives definitely resulted in higher level of service offered to local investors opting to invest in the range of Vilhena funds.

Customers interested in learning more about the suite of Vilhena and BOV Investment Funds may enquire at any BOV branch or at one of the bank’s Investment Centres, by calling BOV Asset Management on 2122 7311 or by sending an e-mail to infoassetmanagement@bov.com

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BUSINESS UPDATES

Wide range of eco-friendly construction solutions available locally JMV Building Solutions provides the widest range of construction solutions available on the local market.

JMV does not limit itself to satisfying energy performance requirements, but strives to go beyond and exceed them. Essentially, the green building vision revolves around promoting a low environmental impact while safeguarding the health and wellbeing of people.

JMV’s vast array of retrofitting products and systems include the EVG-30 Construction System, a complete structural system using lightweight modular panels which permits fast construction of a monolithic, insulated seismically- and fire-resistant structure; the Isomat Thermosystem, a ‘cappotto’ thermal cladding using extruded polystyrene and high-quality fibre-reinforced mortars and acrylic

plasters; and the Kelyfos roof tiles, perfect for retrofitting and insulating old roofing without resorting to destructive measures.

When external insulation is not permissible, due to architectural or site constraints, it can be done internally via the Ytong Multipor breathable mineral insulation boards, while Ytong autoclaved aerated concrete building blocks and building elements are suitable for loadbearing construction or partitioning of new-build or retrofit projects. Gutia Drytek plastic formwork permits the realisation of raised ventilated floorings, while the Kerakoll Bio range offers a vast selection of eco-friendly products that focus on materials which avoid the most common illnesses caused by indoor pollution.

MaltaPost – a business partner in e-commerce logistics

Emirates celebrates successful first year on world’s longest A380 non-stop route Emirates has celebrated 12 months on the world’s longest A380 non-stop route, flown firstly with a 266-seat Boeing 777-200LR and then, since October 30 last year, with the A380, providing up to 491 seats. The upper deck on the A380s features 14 first class suites and 76 business class pods, as well as shower spas up front and an onboard lounge at the rear.

The A380’s introduction on the DubaiAuckland non-stop flight last October after only eight months of Boeing 777 operation at very high load factors, was a very successful move for Emirates, especially as it can now offer A380 service all the way between a

number of destinations in Europe and New Zealand with only one stop, at the airline’s Dubai hub, and a simple six- to seven-hour journey beyond.

In addition, from a customer’s point of view Emirates has been able to offer a total consistency of product on its New Zealand routes, with A380s also on its three daily services to Auckland and daily flight to Christchurch via Australia from Dubai and beyond.

Emirates operates daily scheduled flights between Malta and Dubai via Larnaca, Cyprus, on a Boeing 777-300 aircraft.

Since launching SendOn in 2012, MaltaPost’s service has evolved globally to cover the USA, Europe and Asia, and has been used by thousands of Maltese online shoppers. MaltaPost’s ecommerce proposition is now being further strengthened by its comprehensive e-fulfilment service – eSeller – which caters for storage, packing and dispatching services to both local and international destinations.

The company has also recently invested in Easipik, a nationwide network of secure 24/7 parcel lockers within 13 locations around Malta and Gozo, for the convenience of today’s busy consumers. Businesses can have their clients’ purchases delivered to a parcel locker instead of to a home address. Upon delivery to the Easipik locker, the receiving party will receive a code via SMS. Once this is keyed into the Easipik parcel locker’s touch screen, the correct locker will open and the client can collect the item.

Whether you are a seasoned merchant with a high-street presence or are just starting off in the market with an innovative offering, MaltaPost is your ideal logistics partner. The company’s existing nationwide delivery and distribution network can reach any destination or entity across Malta and Gozo, offering unrivalled logistics service at competitive rates.

For more information about these services call the business relations team on 2596 1720 or E: business@maltapost.com