Business Observer February 22nd 2018

ANALYSIS

Issue 83

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Distributed with Times of Malta

February 22, 2018

Discussions underway to establish real estate agent regulator

Do companies in Malta truly understand the value of CSR and what it can offer their business? see page 5 >

Martina Said A White Paper published in 2016

by Dr Jose Herrera, then Parliamentary Secretary for Competitiveness and Economic Growth, which called for the regulation of estate agents through a new authority and the licensing of all agents, is back on the agenda.

Now under the remit of Chris Agius, Parliamentary Secretary for Planning and the Property Market, Mr Agius said that discussions are well underway, and 2018 should provide “a clearer picture” on its implementation.

“We have held discussions with the sector as recently as last month. Incidentally, Government is also looking into the prospect of setting up an authority whose mandate would be to better regulate the building industry within a socio-economic context which has changed drastically in recent years,” said Mr Agius. “The role of the authority would include updating current building regulations, addressing conflicting legal scenarios, and providing solutions to legal lacunae. This would, among other things, entail revisiting the 1968 Building Safety Regulations as well as the more recent Avoidance of Damage to Third Party Property Regulations, so as to better define the responsibilities of those involved in the post-permit process. There is consensus that such efforts would only prove successful if all contributing stakeholders are trained and duly registered. Property negotiators are no exception.”

At the time it was published, the White Paper proposed introducing an Act to regulate estate

CASE STUDY Malta draws one step closer to becoming the first country in the world with a regulatory framework for Distributed Ledger Technology (DLT). see pages 9, 13 >

STOCK MARKET REVIEW e emotional and psychological factors that lead to irrational investment decisions and how to overcome them. see pages 20, 21 >

agencies, agents, property consultants, and property managers to safeguard the interests of consumers and promote public confidence in the performance of estate agency work; a Code of Ethics covering conduct between agencies and clients; an organisation to coordinate the efforts of estate agencies and property consultants that promotes high-qual-

ity estate in Malta; and international training programmes.

In reaction to the White Paper, Mr Agius stated that, as a point of principle, there should be a clear distinction between brokers, who simply introduce a prospective seller to clients and see the deal go through, and agents (or their representatives), who go a step further by providing advice to their

clients on their choice of investment and discuss technical and legal considerations with them.

“Brokers are already regulated by the Civil Code, which essentially provides that, in the absence of an agreement, brokerage shall be regulated at the rate of two per cent in the case of sale of Continued on page 3

NEWS e hidden monetary value in protecting Malta’s intangible heritage. see page 23 >

e Business OBSERVER

| February 22, 2018

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NEWS

Addressing the most pressing issues facing the real estate sector Continued from page 1 immovables,” he asserted. “On the other hand, there seems to be nothing in the law that regulates real estate agents. Providing advice to a client, especially when investment ramifications are concerned, certainly requires regulation on the part of service providers. We want such agents to be well-versed so that they are aware of their responsibilities and obligations, while prospective clients have peace of mind.

Providing such service should be made possible through accreditation – the new authority will make this happen.”

Mr Agius added that industry feedback on the White Paper was constructive overall. “Estate agents appear to be very positive about the idea of the sector being regulated. Government is equally in favour of having the property market sector operating in the most professional of manners to the benefit of prospective buyers.”

Steven Borg, Head of Sales at Belair Property, welcomed the propositions brought forward by the consultation document. “Having been in real estate for over 30 years, I’ve seen a significant increase in the supply of this service, and noticed a discernible shift in ethics within the industry. So yes, I definitely agree with the industry being regulated. As a result of this increase, new recruits will have the knowledge and accountability our clients deserve.”

Mr Borg added that all of the company’s associates are trained in ethics and the various intricacies of working in the real estate industry – from knowledge of AML regulations, Energy Performance Certification (EPC), valuations, purchasing and selling costs, to codes of conduct and adapting to the client who may be local, from the EU or non-EU regions. “Our associates are fully aware of all aspects that drive this industry. All agents being regulated across Malta will only benefit us at

“Providing advice to a client, especially when investment ramifications are concerned, certainly requires regulation on the part of service providers.” – Chris Agius, Parliamentary Secretary for Planning and the Property Market Belair, as this will ensure unprofessional agencies comply within an institutional and legal framework, together with a code of conduct, which will ultimately help safeguard the reputation of our industry in the long term.”

“It is vital that estate agents are recognised as professional people with integrity, whereby contracts, as well as agreed fees are protected by law,” Mr Borg argued. “An educational framework that is consistent amongst all estate agents in Malta will also help achieve this in the future, hence ensuring the same level playing field for both agents and our clients.”

Douglas Salt, Director at Frank Salt Real Estate, was President of the Federation of Estate Agencies at the time that the document was being compiled, and played a significant role in negotiating the contents of the White Paper with Dr Herrera and his team. “Every effort was made and, as far as I know, full consensus was achieved between agents and Government on the contents of the White Paper,” said Mr Salt. “Naturally, the needs of the industry and the market have now changed, and a certain amount of tweaking is required to reflect today’s realities. We are particularly concerned with non-EU nationals opening agencies or referral agencies, which seem to be sprouting up all over the island, with no market knowledge or accountability to various laws, such as anti-money laundering.”

Mr Salt stated that introducing mandatory qualifications for

agents, as stipulated in the draft document, could help attract well-rounded individuals to the industry, aiding the company’s recruitment efforts. “As an agency, we have always trained our consultants to a very high standard and it is a hallmark of our agency. Recruitment in our industry is quite difficult, especially when it comes to finding individuals of a higher education level, as they do not see real estate as justification for their studies. Raising the stakes might be an incentive for them to enter a challenging and extremely interesting industry.”

Indeed, one of the greatest challenges the industry is currently facing is the lack of an educated workforce which is able to provide more accurate information on what is being sold, said Mr Salt, “together with a clear distinction between agent and someone who does it all and gets away with it, as well as a clear reduction of speculation by consultants – something our agency has long forbidden – as it only serves to inflate the market. A much more professional approach is required overall.”

Managing Director at Engel & Völkers Sara Grech, Benjamin Tabone Grech, is largely in agreement with the regulatory propositions put forward by the White Paper, and added that regulation has become a necessity in the industry. “From 2016 to today, two years have passed – it is now time this is tackled. How-

ever, there are a number of points in the White Paper which must be reviewed. I had first read and contributed to the document back in 2011 – it has taken time for Government to understand that our industry, which affects a few thousand people, must have clear and professional guidelines about market practice. The broker always plays an important role and our accountability is perhaps taken lightly by a few.

Regulation, I believe, will iron out the few who take their role in this industry lightly.”

Mr Tabone Grech asserted that two of the biggest challenges he believes the White Paper would present to the industry if it were to be enforced are primarily educating those who operate within it, followed by clearly defining the role of the broker or agent. “A level playing field for all is essential, and this is where new opportunities will arise. With more accountability, professionalism will stand above the rest.”

As for the most pressing issues facing the real estate sector right now which need to be addressed by the regulation, Mr Tabone Grech cited transparency as one, in terms of agent engagement and passing on offers. “Information is something that we need more of – today, we require an EPC, but we should be collecting plans and documents when listing a new property on the market. Also, both buyers and sellers engage agencies to help them sell or find a new home or invest-

ment, and in some cases, find ways to omit the agent after a considerable amount of investment has been put in – this must stop. In favour of our clients, the agent needs to understand their role much more clearly; knowledge about the property you are selling and about the entire sales process are both essential. Giving feedback and a courtesy call should be common practice and not a rare exchange between agents and clients. Property valuation standards are a hot topic too; however, a framework and guidelines which set a standard about this can be easily formulated.”

On behalf of RE/MAX Malta, Chief Operating Officer Jeff Buttigieg stated that the company is on board with the proposals made by the White Paper, which should help shape the way real estate is sold on the island. “As pioneers in bringing real estate-specific training to Malta, we believe that training is what will make a difference to the service provided to the public,” said Mr Buttigieg.

“The opportunities it may present are extremely positive.

We feel that all agencies should be in line with a level of service that will improve the reputation of real estate agencies in general,” he added. “There may be some agents who leave the industry due to the strenuous vetting that it may entail; however, this may also be a positive.”

Mr Buttigieg asserted that the roll-out of training will need to be addressed industry-wide, as well as who will be regulating the level of training and who will be organising and delivering the training.

“While we believe that the curriculum should be set by the regulator, we believe that since RE/MAX Malta has three real estate academies, the company should be able to teach the curriculum, whereas the regulating body should invigilate the exams accordingly.”

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February 22, 2018

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ANALYSIS

“e practice of CSR in Malta is still in its infancy” Marie-Claire Grima When most people think of Corporate Social Responsibility (CSR), the first things that spring to mind are usually sporadic charity or philanthropic ventures undertaken under the banner of their company.

However, CSR expert Roberta Lepre believes that while such activities are all well and good, CSR goes far beyond that. “A company that is serious about CSR would seek to integrate social and environmental responsibility into the various aspects of its business,” said Dr Lepre, Managing Consultant of Weave Consulting, a boutique firm specialising in CSR. “CSR ranges from the company’s governance mechanisms, to the way it manages its workforce, onto the way it impacts the wider community and the environment.”

Dr Lepre said that while there seem to be a handful of companies that regularly support good causes by providing financial or material support, the real practice of CSR in Malta is still in its infancy.

“There are only very few companies that really understand what CSR entails and look at it as a strategic way through which to enhance their operations and gain advantage over the competition. On the positive side, there seems to be a growing number of forward-thinking business leaders who understand the benefit of ‘doing good’ and who are willing to be proactive in this regard.”

But what are these CSR strategies that can give companies the edge over their competition? Well, a quick glance at the challenges businesses face in 2018 include the need to safeguard their brand equity, which can be negatively affected through social media if not managed carefully; the challenge of attracting, engaging and retaining suitable and competent employees; the need to be compliant with a variety of regulations; and the need to constantly evolve and innovate in order to stay ahead. Dr Lepre stated that all of these challenges can be effectively addressed through a well-planned and resourced CSR programme. “In the medium to long-term, companies which invest in CSR will become sustainable whilst the ones that don’t will fade away,” she said.

While multinational companies are admittedly somewhat better acquainted with the concept of true CSR and have therefore advanced a little bit more in this regard, Dr Lepre dismissed the idea that only major firms can undertake CSR initiatives, stating that it is crucial for companies of any size to implement it if they are to thrive in the market. “It is a myth that only very large companies can afford to engage in CSR, when the reality is that a company cannot afford not to engage in CSR if it wants to survive. There are also many activities already being carried out in companies of different sizes and in different industries, which could be construed as CSR initiatives, but due to lack of knowledge about the subject matter are not even acknowledged as such – in turn resulting in a missed opportunity for such companies. All business operators, be they large or small, have an impact on the wider community, and therefore they can all be more proactive in terms of CSR, albeit in different ways. When it comes to CSR, there is no one-size-fits-all solution.”

So what can a company do if it decides to tackle its CSR seriously? “First of all, top management needs to take a decision to become proactive in relation to CSR. Secondly, it needs to create internal engagement and make sure that all key players within the organisation are on board,” said Dr Lepre. “Last but not least, a CSR audit can help a company identify those areas in which it needs to implement actions in order to address shortcomings which might be hindering its overall business goals, whilst highlighting those areas which can be leveraged further in order to increase return on the ‘social investment’.”

Weave Consulting is one such company that conducts CSR audits on the basis of ISO 26000, which provides guidance on the seven key underlying principles of social responsibility: accountability, transparency, ethical behaviour, respect for stakeholder interests, respect for the rule of law, respect for international norms of behaviour, and respect for human rights.

“Our current main goal is that of increasing awareness and providing education in relation to CSR – and in fact, we will shortly be conducting a short course for

ROBERTA LEPRE, MANAGING CONSULTANT, WEAVE CONSULTING

“ere are only very few companies that really understand what CSR entails and look at it as a strategic way through which to enhance their operations and gain advantage over the competition.” business leaders in order to further help them understand this concept and how they can gain from it on a personal and an organisational level,” Dr Lepre said.

“We will also be working with a select few companies to build a local business

case for CSR – highlighting measurable benefits that such companies would have gained as a result of a well-managed CSR programme. Finally, we are looking at how to better leverage ICT in order to achieve these goals.”

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e Business OBSERVER

| February 22, 2018

NEWS

Malta developing energy and climate plan beyond 2020 Rebecca Anastasi Malta is developing an Energy and Climate Plan which looks beyond 2020 and covers the next 10 years, the Energy and Water Agency (EWA) confirmed to this newspaper.

As 2020 and its associated energy targets draw ever closer, sights are now fixed on the decade that will follow, with MEPs in Brussels preparing to negotiate ambitious targets for cleaner, more efficient energy use, binding countries with the aim of boosting energy efficiency by 35 per cent and the share of renewables in the total energy mix by 35 per cent, by 2030. To compensate for the vast differences between the countries that form part of the bloc, EU member states have been asked to set their own national targets, to be monitored and achieved in line with a draft law on the governance of the Energy Union.

“Looking beyond 2020, Malta is developing a holistic, integrated

Energy and Climate Plan which covers 2021-2030 and will be subject to an impact assessment and determine cost effective ways to decarbonise our economy,” said Daniel Azzopardi, CEO of the EWA. “Through the plan, Malta will be able to commit to specific goals in the areas of renewable energy, energy efficiency and greenhouse gas emissions, taking into account Malta’s specificities. The development of the plan is being led by the Ministry for Energy and Water Management via the EWA; however, it will also include important contributions from various stakeholders, in particular the Ministry responsible for Climate Change, Transport Malta, MTIP, as well as civic society in general. Stakeholder meetings are already underway.”

On the international level, Mr Azzopardi said that Malta’s position remains aligned with that of the Council of the EU and in favour of the bottom-up approach adopted so far. “This does not mean that the EU as a whole should not set itself

ambitious decarbonisation targets, but underlines the diversity and specificities across the 28 member states,” Mr Azzopardi said.

According to Eurostat figures, as of 2016, Malta was just four points away from hitting its 2020 renewable energy targets. The improvement that has been made since 2004, the year Malta joined the European Union, is remarkable; back then, just 0.1 per cent of energy in Malta came from renewable sources. “Malta has a clear plan documented in the National Renewable Energy Action Plan to further increase its renewable energy share to meet its 2020 target,” Mr Azzopardi said. “The plan is on track and contains clear trajectories and deliverables on how to get to the 10 per cent target. However, Malta has onerous targets for energy efficiency and further efforts are required by all stakeholders to reduce the final energy consumption.”

Malta’s business community has been very responsive, Mr Azzopardi said, having so far mainly relied on

Government support to invest in renewable energy. “The return on investment typically expected by investors in renewable energy means that indigenous renewable energy sources (RES) such as photovoltaics are unlikely to be developed unless the electricity tariff is topped by Government aid.” Separate industries in Malta do not have individual targets for renewable energy, Mr Azzopardi confirmed; however, he stated that the EWA works closely with industry representatives to develop support mechanisms to encourage both renewable energy as well as energy efficiency measures. “It is important to underline that the cheapest and cleanest energy is the one which is not consumed. In this regard, most industries also stand to benefit to a larger extent by implementing energy efficiency measures which may have payback periods which are shorter than those applicable to photovoltaic installations.”

Renewables can yield both monetary returns as well as non-tangi-

ble benefits. “Monetary returns still depend on Government support, which from a business point of view provides a guarantee that all electricity generated from the renewable generator can be sold to the grid at a fixed tariff,” Mr Azzopardi said. “Renewable energy contributes towards cleaner energy, lower greenhouse and noxious gas emissions, lower fuel imports and a higher level of security of supply.”

However, Mr Azzopardi added that clean energy should also be considered for its intrinsic value.

“Larger global businesses have already taken this opportunity to boost their brand through their green credentials. Renewable sources also provide an opportunity for businesses as well as households to offset their own consumption. This is particularly important for those who are deemed as ‘heavy’ consumers. Ultimately, businesses should consider their investment in RES as a contribution towards society at large to ensure a cleaner environment.”

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February 22, 2018

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CASE STUDY

Public consultation brings Malta closer to leading global DLT sector A public consultation launched last week by Parliamentary Secretary for Financial Services, Digital Economy, and Innovation Silvio Schembri on the regulation of Distributed Ledger Technology (DLT) has put Malta one step closer to becoming the first country in the world to come up with a regulatory framework for this emerging sector. The sector has enormous potential, which the Ministry believes will match the contribution that iGaming makes to the local economy – more than 12 per cent – within a five to 10-year period.

A distributed ledger is a consensus of replicated, shared, and synchronised digital data geographically spread across multiple sites, countries, or institutions, without a central administrator or centralised data storage. “Through this regulatory framework we are implementing Malta’s long-term vision of being a world leader in innovative economies, while making the Maltese economy more diverse and resilient. We want Malta to become a natural destination for investors, which pays operators to operate from here,” said Mr Schembri.

The lack of regulation is something that Malta is actively trying to address. Besides the public consultation launched last week, proposing a legal framework which will eventually be expanded to include the sectors of artificial intelligence and Internet of Things (IoT) devices, last November, the Malta Financial Services Authority (MFSA) issued a consultation document proposing a policy to the industry on the regulation of virtual currencies and Initial Coin Offerings (ICOs).

“What we are proposing is that, in order to achieve the objectives of financial regulation, certain virtual currencies (VCs) and activities per-

taining to them would be licenced and regulated under a new legislative regime,” said Mr Schembri.

“The new Bill, which will be issued by the MFSA, and any relevant subsidiary legislation, would regulate the carrying out of business associated with virtual currencies falling outside the scope of the existing EU and national financial services legislation. It is important to highlight that the Act will apply a principles-based approach to regulation rather than detailed rules which would possibly stifle technological innovation.”

The consultation document is proposing a three-step approach.

The first involves the setting up of a new regulatory body – the Malta Digital Innovation Authority. The role of the new Authority would be that of promoting governmental policies that favour Malta’s development as a hub for new and innovative technologies, to promote innovation in the design, implementation and utilisation of new technologies, to foster innovation through the creation of a successful ecosystem, to protect the reputation of Malta and to act as a consultative body on this area for other national competent authorities.

The second step involves a Bill that will set out the regime for the registration of technology service providers and the certification of technology arrangements. Third, the document proposes another Bill that will set out the framework for ICOs and the regulatory regime on to the provision of certain services in relation to VCs. The intermediaries subject to the VC Bill include brokers, exchanges, wallet providers, asset managers, investment advisors and market makers dealing in VCs, which would be issued by the MFSA. Three main principles are at the forefront of

PARLIAMENTARY SECRETARY FOR FINANCIAL SERVICES, DIGITAL ECONOMY, AND INNOVATION SILVIO SCHEMBRI. PHOTO – DOI/JASON BORG

the proposed new Act – consumer protection, market stability and market integrity.

“When we say that Malta will be the first country to regulate the outcomes of blockchain, we mean that we intend to create a transparent and robust legislative framework that will facilitate innovation, while at the same time ticking all the boxes in terms of compliance, such as consumer protection, anti-money laundering and Know Your Customer (KYC),” Mr Schembri continued.

“The MFSA will deal with the regulation of cryptocurrency and other related services under a new Act. However, we will also be setting up a national regulator to oversee the technological side of

“ree main principles are at the forefront of the proposed new Act – consumer protection, market stability and market integrity.” things, and will cover the registration on a voluntary basis of System Auditors and Administrators of DLT platforms. These entities will be subject to initial and ongoing supervision by the new Authority.”

The private sector has already started to recognise the full benefits that blockchain can offer, and in the last few months, several pri-

vate initiatives have been put forward in order to make full use of this technology. “The opportunity to lead in this area will result in benefits that will be enjoyed by many. Of course, there are risks.

Some aspects of blockchain, such as immutability, may represent Continued on page 13

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February 22, 2018

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

Editorial Coordinator Marie-Claire Grima

EDITORIAL

Is there a long-term strategy in place for Malta’s financial services industry?

The success that Malta has had within the iGaming industry is old news by now, and Government is clearly hoping that the success that was achieved in this sector – by seizing on a nascent industry and doing everything in its power to nurture it in Malta – can be replicated when it comes to the financial technology (FinTech) and regulatory technology (RegTech) industries. At the end of last week, the Malta Digital Innovation Authority policy document was launched, purportedly bringing Malta one step closer to becoming the first country in the world to provide legislation and certainty in the sphere of blockchain technology, and by extension, cryptocurrencies.

The role of a Malta Digital Innovation Authority appears to be multifaceted; however one of the key functions would be to certify Distributed Ledger Technology (DLT) platforms, verifying that the information being logged on the platform – such as a financial transaction – is genuine. Companies will enjoy the peace of mind that the DLT platform they have engaged provides legal certainty and trust, while also making its operations more efficient by cutting out middle-men such as banks.

The aim of the new Authority is to promote Government policies that encourage the development of Malta as a hub for new and innovative technologies – including their adoption in public administration – and to promote innovation in the design, implementation and utilisation of new technologies.

There’s no doubt that new industries are exciting, and it’s worth striving to be at the head of the pack. However, the core financial services sector, where Malta had managed to foster an excellent reputation for its flexible but thorough regulation must not be left behind either. The EY Malta Attractiveness Survey carried out last year warned that Malta’s ability to keep pace with global regulatory changes, while still ranked positively, was losing some of its momentum (with the happy exception of iGaming), while the stability and transparency of Malta’s political, legal and regulatory environments, once among our flagships, now rank towards the lower end of the scale. This sector is facing difficulties to fill in specific vacancies, both at top and lower levels, mainly due to professional, technical and practical skills gaps.

Despite this, there are certainly promising signs of willingness to change.

Last week, Government announced that action is being taken to protect Malta’s financial services sector and its reputation as a serious and competitive jurisdiction by implementing a number of changes. While addressing a conference organised by the Institute of Financial Services Practitioners (IFSP), Finance Minister Edward Scicluna said that the actions will focus, amongst other things, on the threat that money laundering poses to the industry locally.

While the specific details of such actions are yet to be revealed – the Government statement said that they would be announced soon – the recommended changes follow an “independent, international analysis” of Malta’s legal, fiscal and regulatory structures over the last few months. Around 50 recommendations for changes have been made, one of which suggests that there should be more coordination between the Maltese and international entities involved in the field of financial services, especially before EU laws even begin to be drafted. This, Prof. Scicluna said, could potentially benefit the competitiveness of Malta in this field.

But is this enough? Will this be enough to ensure Malta maintains its reputation and the quality of its service? Juanita Bencini, President of the IFSP, warned at the same conference where these changes were announced, that the financial services sector, which was going through an exciting period, with potential for more growth, needed a long-term strategy. The relevant structures which are supposed to support such practitioners have to offer efficient and effective support. Ms Bencini said point-blank that she and other operators within the sector feared that with all the fuss being made about FinTech, the Maltese financial services industry’s innovation and competitiveness – arguably its two key selling points – could be left to fall by the wayside.

Malta ranks 25th in the world for its availability of financial services, 23rd for affordability of financial services and 33rd for financing through the local equity market. Despite being the smallest EU member state, Malta has truly distinguished itself in this sector. While seeking to be at the forefront of new industries is always commendable, a certain idiom springs to mind – a bird in the hand is worth two in the bush.

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BUSINESS OPINION

Going green makes smart business sense “Companies need to focus on ensuring that their products are not only safe and efficient to use, but that once they become waste, it is then easy for consumers to recycle them.”

Ing. Mario Schembri For years, environmental issues barely made the headlines. Green wasn’t sexy and it certainly failed to compare with the profits raked in by more polluting ventures.

But things are shifting – literally shifting. As we speak, scientists are studying the depths and dangers of Antarctica’s melting sea ice, and the impact of climate change.

One study after another also reveals shocking statistics on the impact that plastic, which takes 500 to 1,000 years to degrade, has on marine life. Consumers are waking up to the impact that their waste is having and they are increasingly demanding that businesses go green and provide eco-friendly products.

Businesses may not have been so agile in adapting to meet these demands, but we are wit-

nessing a marked improvement in their desire to do their bit for the environment. However, the main challenge remains that, although there are many businesses that want to improve their green credentials, they are sometimes uncertain of how to go about it and whether they are doing the right thing or not.

Sharing ideas and creating the right discussion platforms will be the first step towards changing the situation.

But in the meantime, laws have been instrumental in stimulating change, and through the Extended Producer Responsibility (EPR), companies are now responsible for the waste resulting from their business activity; that is, collecting and recycling the products sold after consumer use.

Malta officially adopted the EPR concept some 10 years ago and then reconfirmed it and extended this concept in the 2014 edition of

the waste strategy. Today, EPR is what actually finances and runs the collection of recyclable waste from households and localities.

This is where GreenPak comes in. As the biggest collector of recycled waste on the island – covering close to 70 per cent of all local councils across Malta and Gozo – the cooperative is responsible for emptying the colourcoded bins at bring-in sites, as well as collecting recycled waste from households.

So far we’re on the right track. In 2017, GreenPak successfully collected 59 per cent of the plastic packaging its business partners put on the market, surpassing the minimum targets of 22.5 per cent laid down by the EU. But we’re constantly seeking to do more and our goals this year are to recover an even higher percentage of plastic packaging as recycling becomes an integral part of today’s business culture.

Businesses are also looking into ways of extracting fewer raw materials and focusing on making products from renewable or recycled materials, saving energy and costs in the process.

Just imagine, recycling 33 aluminium cans saves about seven kilowatt-hours (kWh) of electricity, according to studies. And, with the energy it takes to make just one new aluminium can from bauxite ore, you can make 20 recycled aluminium cans. In essence, this means that the energy saved by recycling a single aluminium can is enough to power a television set for three hours.

Companies need to focus on ensuring that their products are not only safe and efficient to use, but that once they become waste, it is then easy for consumers to recycle them.

Try this exercise the next time you happen to be at the supermarket. Take a minute to stop

and look at fabric conditioner bottles. Some companies are using clear PET bottles – the same material used for soft drink bottles, which is recyclable. But then, the effect is ruined by using a label which is shrink-wrapped PVC, which makes it incompatible with recycling.

Similarly, products made from multiple materials make it difficult to dissemble and extract the materials for reuse or recycling. To make environmental matters worse, electronic consumer products are also becoming too readily disposable: difficult to repair and impossible to upgrade.

All these are design issues that can be resolved. It’s a designer’s choice – or really, more of a business decision – to reverse these environmentallycompatible practices.

With too few eco-designed products out there, there are numerous business opportunities waiting to be realised, but the biggest change needs to be in consumers’ realisation that their demands will drive the necessary companies to change.

Ing. Mario Schembri is CEO of GreenPak and a Director on the Board of the Extended Producer Responsibility Alliance (EXPRA), the international umbrella promoting not-for-profit national waste recovery systems.

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February 22, 2018

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CASE STUDY

Making Malta a natural destination for investors Continued from page 9 challenges with regards to certain data protection aspects, in particular the upcoming General Data Protection Regulation (GDPR).

However, the technology may also arguably facilitate the protection of personal data in that it is embedded with characteristics which inherently increase the protection of data, such as encryption.”

Within the public sector, Government has a number of key duties that could be impacted by blockchain technology, particularly in the areas of privacy and data portability. Its applications to Government services include the use of smart contracts and registry of ‘assets’. “By registering assets on a distributed ledger, all property could effectively become ‘smart assets’, providing a robust and trustworthy proof of record for a broad variety of services that currently cost time and

money. Examples include registering IP and patents, wills, notary services, health data and social security benefits,” Mr Schembri said.

The rapid expansion of the Fintech (financial technology) and Regtech (regulatory technology) sectors, which are closely linked to blockchain, has also led to the imminent setting up of a task force with the aim of attracting companies within these sectors to Malta.

“The function of such task forces is to assist in enticing investment, exploring new markets, as well as obliging financial institutions to make the required amendments to compliance,” Mr Schembri said. “If we look around us, we can see that funding for Fintech companies is on the rise, support for the industry from governments is increasing and an abundance of both incubators and accelerators are offering start-ups the means and assistance to grow within the industry. We

aim to be at the forefront of this new wave of innovation.”

With the adoption of such specialised technology, however, often comes a sheer shortage of human resources equipped with the right skills for the job. This shortage is more pronounced in Malta, which, besides having a comparatively small pool of workers, is going through a record-low period of unemployment, and has to import much of its workforce in order to sustain growth. However, Mr Schembri claimed that the pool of people with profound expertise in this area is limited, not only for Malta but also worldwide. “Let’s not forget that this is a new technology and has entered the mainstream only in the last two or three years.

But this also presents an opportunity for Malta, which can offer leadership in this space.”

“Just as other industries locally have benefitted from overseas

“is is a new technology and has entered the mainstream only in the last two or three years. But this also presents an opportunity for Malta, which can offer leadership in this space.” human resources which helped contribute to Malta’s economic success, so too will this specialised industry, which can gain from specific expertise while continuing to diversify the country’s workforce,” asserted Mr Schembri. “The new regulatory Authority will serve as a centre of excellence in this regard. Part of its remit will be to serve as a consultative body for all other entities in Malta in the application of this technology, thus helping to

avoid duplication of work and optimise the use of expertise.”

“Government is being proactive in this regard. Later this year, a blockchain hub will be launched. This will help attract expertise to Malta as well as foster local expertise. We are also actively exploring the possibility of collaborating with the University of Malta in order to start offering specialised courses in blockchain, both at degree and master levels.”

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| February 22, 2018

CASE STUDY

Jesmond Mizzi aiming to hit €100m asset management mark in Merill Funds within next 18 months Marie-Claire Grima Jesmond Mizzi Financial Advisors (JMFA) is aiming to hit the €100 million mark within its Merill SICAV, for which the company acts as investment advisor and promoter, within the next 18 months.

The company, which is one of Malta’s most well-known and recognisable financial service providers, has raised over €63 million worth of assets under management in a very short time since the launch of the Merill Funds, and is hoping to achieve its target of €100 million in order to expand its service offering and be able to market its products internationally.

The company was set up by Jesmond Mizzi – who is both the name and the face of his company, thanks to his visibility in the local media – 15 years ago, along with two partners, John Catania and Dr Mark Azzopardi.

“We applied for a license and Jesmond Mizzi Financial Services, as it was then known, was licensed by the Malta Financial Service Authority (MFSA) in 2002,” said Mr Mizzi. “A few years later, we acquired the client base of a very well-established stock broker, Paul Azzopardi, which meant that within three years, our client base increased substantially. Later on, Atlas Investments expressed their interest in merging their investment arm with our company. Set up in 1996, Atlas Investments was managed by Jean Gaffiero, who still forms part of the team today.

For a time after the merger, the

company was called Atlas JMFS, which linked our brand with a more well-known household name. They had an investment arm and wanted to grow it – we saw it as a progression to gain a bigger client base, allowing us to provide a more holistic service to our clients. We felt that with Atlas, the brand could give us more exposure in the market and exposure with their insurance client base.”

“We were always great believers in the fund business – we set up strong relationships with respectable fund houses such as Janus Henderson, Legg Mason, and Pictet, which allowed us to provide clients with the best possible products. We sought out relationships where we felt we could add something to that partnership, rather than just buy funds from them. We did not stop there – we’ve worked with Invesco and Kames; we have investments with Fidelity, with Schroders, with Franklin Templeton, Lloyds and more. At one point, 80 per cent of our revenue came from the fund business. Then, the market changed. For a time, people did not want to buy funds, owing to the conditions of the market during that period; therefore, we had to change the business model. We came up with more direct investments, creating discretionary portfolios, and introducing more active management of the client business, but always trying to convince clients that it’s in their best interest to invest in funds. We have always believed – and still do – that funds reduce the risk that

investors take. Investors can find the fund that best fits their needs, and even if you have small amounts to invest, you can easily diversify via the fund structure.”

In keeping with the company’s own confidence in the efficiency and safety of funds, JMFA decided that one of the best ways to further the business would be to create its own SICAV – investment funds with variable capital. “The first fund was created in 2016, where it was more of a total return fund, which I believe is a good core holding that every client should have – a mix of investment grade bonds, local bonds and equities,” explained Mr Mizzi. “That was set up with seed capital from Atlas. We kicked off at €14 million – today it’s worth more than €30 million. Last April, we launched two new sub-funds, a high-income fund and an equity fund. All three funds pay income, which is something that Maltese investors seek. Whereas the first fund produced a lower income, because it was total return, through the high-income fund we widened the exposure we can have to thirdparty funds. With the total return, the maximum we can invest in third parties is 35 per cent – in the latest, we can invest up to 60 per cent. We are always seeking to diversify the products we can offer our clients.”

“Our latest development has been strengthening the asset management team – we recently employed a chief investment officer who has more than 18 years’ international experience. The company is now looking to go to

“We have always believed – and still do – that funds reduce the risk that investors take. Investors can find the fund that best fits their needs, and even if you have small amounts to invest, you can easily diversify via the fund structure.” new places; our client base has always been predominantly local, and with the development of our new SICAV, we feel that we will be better placed to try and internationalise the company by joining forces with overseas companies, to offer our services and products abroad. Pensions are also in our sight in the near future – our funds will be part of a pension product that will be boosted by the incentives on offer for both the employee and employer, which we hope to offer to companies.”

The company has also made major headway in acting as a stockbroker for other institutions and taking companies to market.

“We are the sponsoring stockbroker of Bank of Valletta and have been jointly involved with BOV in their recent rights issue, and their more recent bond issues. We have also acted as stockbrokers for Mediterranean Bank’s (now MeDirect) bond issues for the last number of years. We were involved in PG plc’s IPO, which was a very big success for the local market – we hadn’t had an equity issue for a number of years. We have also taken an active role in the Prospects MTF business; although we are not corporate advisors, we have been assisting them in effectively selling or advising clients to buy the bonds which are

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CASE STUDY

JESMOND MIZZI, MANAGING DIRECTOR, JESMOND MIZZI FINANCIAL ADVISORS (JMFA). PHOTO: ALAN CARVILLE

being issued under Prospects. We are seeing huge demand both locally and internationally for Prospects.”

JMFA’s investors are very diverse, ranging from institutional and corporate clients, to high-networth and wealth management clients, to retail clients. Mr Mizzi voiced his concern that the changes in regulations that will come as a result of the new MiFID II rules, and their accompanying regulation (MiFIR) will make it challenging for companies to service retail clients at the lowest cost for them while ensuring that the service is feasible for the company. “What MiFID will offer is

better client protection, such as more visibility on fees and ongoing assessment of their risk profile.

However, measures such as providing more regular information, implementing anti-money laundering directives, enforcing data protection – all this comes at a cost. If a big client is generating more income for the company, the firm will have to decide how much time it can afford to spend on its smaller clients. What the European authorities have set out to do with MiFID may backfire, ending up with smaller clients not being serviced as well as they could be. That is a big challenge for the industry.”

However, Mr Mizzi added that thanks to MiFID II’s emphasis on constant updates and information, no investor will ever be able to claim ignorance when the market takes a tumble. “‘I didn’t know’ is something that you only ever hear when the markets are doing badly. The industry always wants people to thrive, and that is why some aspects of MiFID are so strong. People have to understand what they want from their investment, what risk they want to take, and that the return needs to be adjusted according to those risks.

You can’t have very low risk and very high income – the two don’t match. If someone promises you that, it just won’t happen.”

Honesty and the personal touch are two elements that are very important to JMFA. “Our staff has a very low turnover rate, so there’s a lot of stability for our clients in terms of who they communicate with. Although today I don’t meet as many clients as I used to, they still get the peace of mind that the strategy of how they should be investing is being planned out at a higher level,” Mr Mizzi said. “Our philosophy is that we’re here for the long-term –we’ve been here for 15 years and we plan to be here for much longer. We won’t advise our clients to do anything if we don’t believe in it. If we can’t cater to you – in the instance of shortterm investments, for example – we won’t do it. This honesty and integrity have served us well as a strategy to grow and maintain our client base.”

“I think crucially, investment is about the long-term. We are not into speculation – we look at advice in the long-term. We provide clients with the comfort that there is someone looking after their money, and with our own funds we can do this better. We do not promise things which are unlikely. There will be years when you do better, and years when you do less well, and that’s why you need to be there for the long-term. It’s a cycle.”

“We also keep close contact with our clients, especially through the

“With the development of our new SICAV, we feel that we will be better placed to try and internationalise the company by joining forces with overseas companies, to offer our services and products overseas.” media. Over the past 15 years, most of our marketing budget has been spent on educating the public through media appearances.

I’m on TV at least four times a month, and clients can get a view of what’s happening by tuning in and listening to me talk about what happened during the previous week or by reading my weekly articles in The Sunday Times. I can’t meet all our clients so I try to reach out to them through the media. We have tried to make something which is complicated and inaccessible to many people more accessible, by bringing it down to the nitty-gritty of layman’s terms. We want to let people know that everyone can invest, and I think the public appreciates that.

We also want to revive the culture of regular savings. The Maltese used to be a nation of savers, but there’s been a cultural change – our parents were better savers than us, because nowadays we spend far too much money to have the best of everything. Making regular savings payments is something that needs to be ingrained into people’s minds as a good habit. ” Mr Mizzi revealed that prospects for the global financial market appear to be good for 2018, despite the recent correction in the US equity indices which had a global impact. “The US continues to grow steadily, and markets have had a good year in 2017, despite the Trump effect. The European economy is expected to continue to grow too – hopefully, Germany will have a stable coalition government soon; Italy has elections coming up too. We’re also hoping

that there will be a good conclusion to Brexit, which will benefit both sides.” On the other hand, Mr Mizzi questioned how quickly interest rates will go up as a key factor which will have a major impact on the market. “It’s kicked off already in the US with the new chairman of the Federal Reserve, Jerome Powell. Inflation has gone up and higher interest rates should follow soon. The monetary policy in Europe is very loose at the moment – how quickly will that change, and how will it impact the economy? I’m wary of the fact that we’ve had several good years in a row – now people have to be more realistic when it comes to expectations of double-digit returns.” The recent volatility in the markets could be a sample of what we can expect in 2018.

Mr Mizzi also remained sceptical of cryptocurrencies as an investment. “It’s early days for cryptocurrencies, but as we go along, people have to be aware of what they’re getting into. Some people have made quick bucks, others have lost a lot of money.

Every day you hear about banks losing their counterparties because they’ve been warned not to trade in Bitcoin. At some point, I believe cryptocurrencies will become much-more widely accepted, and when that happens, I hope that they are well-regulated.

Today, the word investment is being used very loosely, and when you have unregulated investments being placed on the same level as the regulated ones, it skews the playing field. It makes it very difficult for those who play by the rules.”

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e Business OBSERVER

| February 22, 2018

CASE STUDY

RE/MAX Malta announces 14th consecutive year of growth Master franchise to grow internationally

“We anticipate that 2018 is going to be another recordbreaking year for the company, just like 2016.”

Jo Caruana 2017 proved to be yet another year of progress for RE/MAX Malta, as the company announced its 14th consecutive year of growth last Friday during the RE/MAX Malta Annual Convention, which was held in the Ballroom at the Radisson Blu, St Julian’s.

RE/MAX Malta’s Annual Convention looked back on the calendar year of 2017 and was organised to celebrate the successes across that 12-month period. The company invited guest speakers to provide motivational talks on the theme ‘Unleash Your Potential’.

Nathan Farrugia, philanthropist, and Founder and CEO of Ultimate Performance, was one of the keynote speakers, together with Paul Vincenti, International Real Estate Trainer and Coach.

“It was our largest AGM ever,” said RE/MAX Malta CEO Kevin Buttigieg. “Over 450 RE/MAX affiliates attended and a record 160 awards were given out to our top people, honouring their outstanding achievements within the region.

Of course it’s never easy to be the leaders in an industry but we believe that by keeping our foundations strong and building an excellent team, we will stay where we are – at the top.”

Mr Buttigieg and his team certainly had a lot to be proud of in 2017, as there were a number of unparalleled moments to look back on, including winning RE/MAX Global Region of the Year at the most prestigious award event, the RE/MAX R4 International Conven-

RE/MAX MALTA CEO KEVIN BUTTIGIEG ADDRESSING THE CROWD AT THE RECENT AGM.

tion in Las Vegas. “It was a super achievement,” Mr Buttigieg continued. “We feel it was well-deserved because the company performed on all cylinders throughout the year, while we ticked all the criteria – from speaking at international events and providing ideas to the global franchise, to working on CSR initiatives through our foundations and, of course, reaching our goals for sales and lettings. It is an authentic award because it is voted for by the directors of RE/MAX International, which means there is genuine global competition to beat. We are certainly going to try to win it again in 2018. In fact, we anticipate that 2018 is going to be another record-breaking year for the company, just like 2016 was.”

Other notable international achievements during 2017 include letting agent Cherton Caruana winning the global honour of most transactions by an individual. Beyond that, Etienne Vassallo, a local RE/MAX sales associate working in the RE/MAX Alliance Tigné branch, was announced as the top real estate agent in the world for sales volume between January and June.

Across the real estate industry in Malta, prices have continued to rise. “Whether it’s a one-bedroom flat in Msida or a villa in Marsascala, everything is selling and it’s all going up in price,” Mr Buttigieg asserted. “I believe that trend is going to continue well into 2018, especially in very in-demand areas where supply is quite low. I would

say that villas and land will be especially popular in the year to come, while condominium lifestyle living is also growing in attractiveness. Valletta, of course, will be the star of the year, while, commercially, Mrieħel will receive a new lease of life when a number of projects are finished there. Special Designated Areas across the island are also expected to excel.”

For RE/MAX, 2017 provided the opportunity to widen the net and the company opened five new offices, in Pieta Marina, Marsascala, Swieqi, Msida and Mgarr, Gozo, while also recruiting more and more people to boost its growing team. The company also saw a surge in interest in its Exclusive and Auction packages, two new con-

cepts that it brought to the market recently and which are proving to be very successful.

“Both of these options give our clients a very clear view of what is happening with their property, as they receive constant feedback throughout the process,” Mr Buttigieg explained. “We don’t just put any property onto our Exclusive or Auction books, but vet them and ensure they are valued properly to sell. We are sure that both of these areas will grow in 2018, while we are also confident about our marketing strategy for the year, as well as our plans to make our internal workings even stronger than they currently are.”

There’s also big news for the local master franchise company, as it will be opening its first international office, in Montenegro. “We are obviously growing in Malta and know that we have a bit more room to mature here, but we also wanted to look at options for our next step.

This led us to look around a variety of regions in Europe and we found Montenegro, which we have been lucky to acquire the franchise for.”

Mr Buttigieg says the RE/MAX board of directors find Montenegro very appealing because it reminds

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CASE STUDY

KEVIN BUTTIGIEG, CEO OF RE/MAX MALTA, TOGETHER WITH THE MALTESE FRANCHISE OWNERS AT THE HILTON MALTA.

CHERTON CARUANA, WINNER OF THE GLOBAL HONOUR OF MOST TRANSACTIONS

BY AN INDIVIDUAL.

them of Malta in the 1990s, although slightly more advanced. “We believe we can replicate the success of RE/MAX Malta in Montenegro and have already located strategic partners in the region,” Mr Buttigieg said. “We think our growth there will be even more exponential than it has been here, because the market there is crying out for good agents.

All the stakeholders there are looking at us as a much-needed breath of

tions we have chosen and the opportunities that will be created.”

Looking back on 2017, Mr Buttigieg believes he and his team achieved everything that they set out to, and, looking ahead, this year will be no different. “We have actually exceeded expectations and plan to keep doing that into our future. We are so pleased and gratified by the hard work put in by our local franchise owners,

fresh air that will help them take their industry to the next level.”

With that in mind, they will open their first Montenegro office on 4th April this year, which is, incidentally, the anniversary of the opening of their first office in Malta 14 years ago. “We are planning to have six offices there by the end of the year,” Mr Buttigieg said.

Back in Malta, 2018 will see the local arm focus ever more on ex-

pansion and consolidation. “We have a number of exciting announcements to make here too.

For instance, we will be opening a new concept RE/MAX coffee shop and wine bar in Balluta, and in one of the leading shopping malls on the island. We will also be opening three new offices, in Santa Venera, Qormi and at the Dolmen Hotel in Qawra. We’re pleased with the strategic loca-

managers and agents, without whom none of this success would be possible.”

“Combined with the amazing things achieved by our RE/MAX and Friends Foundation, which distributed over €85,000 to worthy causes last year and plans to surpass that this year, all this makes me very proud of what has already been achieved and excited by what is to come,” he concluded.

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e Business OBSERVER

| February 22, 2018

CASE STUDY

Equiom Malta wins again at Citywealth IFC Awards Rebecca Anastasi International professional services provider Equiom has once again received recognition from one of the most respected awarding bodies in its sector. Its Malta business has been awarded Trust Company of the Year for the second year in a row, in the Citywealth International Financial Centre (IFC) Awards, which reward excellence in the private wealth sector.

Equiom (Malta) Ltd is the local branch of a global business, which boasts a strong presence across Europe, Asia, the Middle East and the Americas. Equiom Malta has grown exponentially; starting out with just six employees, it has now grown to 14 people, principally through the acquisition of Malta-based fiduciary business, DF Corporate Services Ltd, in September 2017. In that same week, Equiom also acquired trust and fiduciary business Carey S.A.M. in Monaco.

Equiom’s Malta business, which began as a start-up in 2012, has grown the value of the assets it manages significantly, according to Managing Director Colin Gregory. He explained that Equiom applies a “twin-track growth strategy” which is “focused on growing the business through organic and acquisitive growth.” This enables it to enter new markets or build on its presence in existing jurisdictions, together with the ability to offer additional service lines.

The local office specialises in various services, particularly in the yachting, aviation, and corporate services sectors. It also provides services related to the establishment and administration of trusts, asset protection through appropriate structuring, as well as guidance on Malta citizenship, eBusiness, Maltese payroll, and shipping. Its clients are international businesses and high-net-worth individuals from all around the world, seeking corporate services as well as onshore EU opportunities, benefitting from Equiom’s network which spans across 15 jurisdictions. “Together, our highly-qualified, specialist team provides clients with optimal solutions, drawing on our in-depth

EQUIOM MALTA MANAGING DIRECTOR COLIN GREGORY. PHOTOS BY ALAN CARVILLE

knowledge of local and international regulations,” Mr Gregory said.

The company is a regular at key international industry exhibitions and conferences, including the Monaco Yacht Show, Superyacht Investor (London) and Quaynote in Malta, which enables the team to keep up-to-date with important industry changes which affect their clients, helping them to build relationships with key intermediaries. They also keep a high profile by attending local events, writing articles for local and industry publications, and supporting relevant professional bodies.

“e vision of Equiom is for us to become a top professional service firm in each jurisdiction we work in. We always wanted to find the right partner and we finally found it – we’ve found an excellent fit here.”

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Over the years, Equiom Malta had been actively looking for the right partner to complement the business by way of the services offered but also in relation to culture and technology. Indeed, the recent acquisition of DF Corporate will enable the company to continue building its portfolio and suite of services, especially since it has enhanced it with further expertise of the local regulatory landscape, as well as in the area of back office services such as tax, VAT and payroll.

“This has helped to strengthen our corporate offering and provide a more complete service to our global client base,” Mr Gregory explained. “The vision of Equiom is for us to become a top professional service provider in each jurisdiction we operate in.

We always wanted to find the right partner and we finally found it – we’ve found an excellent fit here,” he said.

They have since moved into new offices in Mrieħel. “The time was right to move,” Mr Gregory said, going on to explain the reasons for the choice of location. “Mrieħel seems to be changing from an industrial zone to a financial centre and the new office made sense to us, both from a geographical perspective – due to its central location – and in terms of its size, which allows for further growth within the office.”

Moreover, the recent acquisition has enabled Equiom Malta to grow into new geographical markets, and to cross-sell the specialism of the combined companies to the client base of the now larger company.

“There were obvious synergies. DF Corporate’s client base can benefit from a company like Equiom with its client base

“With a truly international client base we are now able to provide a local partner in more and more jurisdictions where our clients do business.”

spanning Dubai, Japan, Hong Kong, Singapore and BVI, among others. We have a strong business development team which looks at organic growth from that perspective,” Mr Gregory explained. This strategy has strengthened the cross-jurisdictional expertise on offer, with the combined knowledge of over 700 professionals – the entire Equiom global team – available to

each and every client, wherever in the world they are based.

A few weeks ago, the company also expanded into Luxembourg, and added fund administration to its suite of services with the acquisition of Carey S.A. All of these acquisitions, according to Mr Gregory, have strengthened Equiom’s position in Europe, enhancing its ability to seek sustainable

growth across the EU market. “Having a presence in Malta, Luxembourg and Monaco offers clients comfort, continuity and a sharper focus on the EU market in the midst of uncertain times. With a truly international client base we are now able to provide a local partner in more and more jurisdictions where our clients do business.”

Equiom’s core services in Malta will benefit from this greater presence in Europe, especially in the wake of Brexit. “Now that Brexit is around the corner, there’s a lot of focus on building expertise in Malta. With all the uncertainty surrounding Brexit, the only certainty is that one cannot stand idle and must plan for the future and have a ‘Plan B’. I believe that Malta is well-positioned to be that contender for increased business post-Brexit,” Mr Gregory said. “The future looks bright for the company – it’s an exciting time for Equiom as the local business, and the international group, to continue going from strength to strength.”

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e Business OBSERVER

| February 22, 2018

STOCK MARKET REVIEW

Psychology in investing

Adrian Gafà When Warren Buffet’s right-hand man, Charlie Munger, was asked for a single word to account for his remarkable success in investment, he simply replied that he was rational. Traditional financial theory assumes that all investors are rational and apply all the information that is available at the time when undertaking an economic decision. However, this notion has been challenged

by Behavioural Finance Theory which attempts to explain the emotional and psychological factors that lead to irrational investment decisions.

In practice, investors constantly exhibit irrational behaviour which may lead to sub-optimal investment decisions. Behavioural Finance attempts to identify different, but highly correlated, behavioural biases, as well as aiding investors in overcoming such limitations in financial decisionmaking. Understanding and possibly overcoming these biases is therefore imperative to improving the effectiveness of your investment decisions and in attaining the desired financial objective.

Behavioural biases are defined under two broad categories, ‘cognitive errors’ and ‘emotional biases’. Cognitive errors are related to the limitations of the human brain in processing all of the information available. These types of behavioural biases can be recog-

nised and their effects can be reduced or even eliminated in some instances. On the other hand, emotional biases relate to an individual’s temperament, spontaneity or moods as they play a part in deviating decisions from their logical alternative. These type of biases are often very difficult to keep under constant control.

The following paragraphs will outline some of the most common psychological biases, their consequences and what can be done to overcome them.

One category of cognitive bias is called ‘belief perseverance’ and includes biases such as conservatism, confirmation, and hindsight. Such biases indicate investors’ unwillingness to incorporate new information and continue to hold their previously-held views irrespective of any developments. This is especially true when the information is contradictory to their existing beliefs. In such instances, investors, at least as a first reaction, tend to downplay contradictory information as noise. Furthermore, people tend to hold on to past outcomes, and as time progresses, tend to believe that they had accurately forecasted those outcomes.

For example, one might logically conclude that General Electric is a great company because it was established more than 120 years ago and has stood the test of time, becoming the international conglomerate we know today.

Unfortunately, GE has recently been experiencing rather severe disruptions in its business model as it was subject to an investigation on its accounting practices, suffered losses on certain lines of business and also faced cash flow challenges, amongst other issues.

Nonetheless, given the group’s heritage, an investor may shrug off such disruptive news and continue to simply reiterate that GE is a great company and will overcome such challenges without carrying out an appropriate analysis.

“Investors tend to exhibit the status-quo bias, whereby they tend to hold on to their existing holdings and avoid the responsibility of taking a decision.”

The other category of cognitive biases is referred to as ‘information-processing’ biases, including anchoring, mental accounting and framing. These relate to how investors process information that is used to form an investment decision. Various studies have concluded that the human brain has a number of limitations in processing information, which more often than not lead to illogical or irrational decisions.

Meanwhile, one type of emotional bias is loss aversion,

whereby the effect (financial pain) of a loss is greater than the satisfaction brought about by a profit. In turn, this leads to the disposition effect, whereby investors tend to hold on to a lossmaking investment in the hope that someday the investment will be recovered in full without giving undue importance to the underlying fundamentals of that same investment. Loss aversion may also lead an investor to sell profitable investments (forgoing further growth potential) to simply

avoid facing losses that may materialise in the future.

Change is difficult to embrace for humans in every aspect of life. This is also the case in investments. In fact, investors tend to exhibit the status-quo bias, whereby they tend to hold on to their existing holdings and avoid the responsibility of taking a decision. This bias is also highly linked to the regret aversion bias which further explains investors’ wish to avoid future regrets in the event that their investment decision does not go as planned.

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Another type of emotional bias is the endowment bias. In this respect, investors tend to attribute a value to owned investments which is much higher than the price they would be willing to pay to acquire the same security, at the same point in time and under the same circumstances. This bias is especially evident when dealing with inherited assets as investors tend to attach a sentimental value to that particular security, thereby raising its value without any economic rationale.

The consequences of behavioural biases can vary but the most common outcome is likely to be inappropriate diversification across asset classes, sectors, regions and currencies, amongst others. Furthermore, investors might expose themselves to excessive risk as they take irrational decisions. For example, the loss aversion bias may limit an investor’s upside potential (by cashing in any profitable positions) but remain exposed to downside risk by holding on to loss-making positions in the hope they rebound and at least break-even.

Biases may also lead an investor to have a false sense of confidence in the portfolio of investments held as this may be based on outdated information. Additionally, when reviewing or appraising the performance of such a portfolio, the conclusion might also be inaccurate given these behavioural biases including hindsight.

Although not all investments will be successful – hence the need for optimal diversification – investment decisions flawed by behavioural biases could easily preclude an investor from reaching his or her investment objectives. Such failure could lead the investor to either abandon investments completely or to exhibit herding. In the latter case, an investor would start following what others are doing, which is a very risky stance since investment portfolios should be tailored to match the financial situation and objectives of each and every investor.

Being aware of the various behavioural biases and their respective consequences is the first step to overcoming these same biases.

In general, investors should keep themselves informed about any new developments whilst giving due consideration to unfolding developments. Furthermore, at the outset, investors must set rules (including investment objectives and risk parameters) for their portfolios as well as individual investments that will guide them in undertaking investment decisions whilst reducing the amount of emotional influence on such decisions.

Finally, investors should seek ongoing professional assistance with their trusted financial intermediary. The advisory or discretionary portfolio management services offered by financial services practitioners should enable an investor to appropriately construct and maintain a diversified portfolio in line with the investor’s objectives and risk parameters.

Adrian Gafà is a Research Analyst at Rizzo, Farrugia & Co (Stockbrokers) Limited.

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. © 2018 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

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Culture Directorate gets the ball rolling on protecting Malta’s intangible heritage Rebecca Anastasi What do Malta’s religious festi, traditional għana singing and the voluntary teaching of music at band clubs have in common? They are all examples of Malta’s intangible cultural heritage – an umbrella term that includes the practices, knowledge, and skills that communities recognise as part of their cultural heritage.

Other examples of Malta’s intangible cultural heritage range from crafts and artisan works which are becoming extinct due to technology, such as tinsmithing and church gold embroidery, to the making of salt using salt pans, and falconry.

Malta’s Culture Directorate has recognised the value of these essential elements of Maltese identity, and is currently working on setting up a website through which it will encourage the Maltese community to nominate aspects of local heritage for acceptance onto UNESCO’s growing intangible heritage master list. “This will be the first time Malta presents elements for submission onto the prestigious list, which attempts to raise awareness of cultural traditions which need safeguarding, such as language, the performing arts, social practices, rituals and festive events, as well as traditional craftsmanship,” said Mario Azzopardi, the Director of the Culture Directorate.

The public will be invited to nominate aspects of cultural heritage under three main categories: those requiring urgent safeguarding; those to be added onto the longer ‘representative’ list which includes more general elements demonstrating the diversity of Maltese heritage; and those to be included on the register of good safeguarding practices, which allows, according to the UNESCO website, “governments, communi-

– ANA IN Z.EJTUN. PHOTO: VIEWINGMALTA TRADITIONAL GH

ties and other stakeholders to share successful safeguarding experiences and examples of how they surmounted challenges faced in the transmission of their living heritage, its practice and knowledge to the future generation.”

The Directorate will also be nominating a Committee for the National Safeguarding of the Intangible Cultural Heritage (CNSICH) which will establish the policy and the criteria, and evaluate the nominations so that they are first recognised at a national level and inserted on the national inventory.

“It is the community, with the support of the Culture Directorate which needs to propose how the safeguarding can take place. Depending on the plan of action proposed, the Culture Directorate shall establish the necessary commitment,” Mr Azzopardi said.

Once an element has been accepted for placement on the local level, and a successful plan for safeguarding it is implemented, it will be passed on to UNESCO for evalu-

“ere’s no denying the fact that culture and heritage tourism tend to attract high-yield tourists.” ation. There are several criteria of acceptance onto the international list. The element needs to be recognised by the community and rooted within the group. It has to provide the community involved with a sense of identity and continuity, based on shared experience and collective memory. It must also reflect cultural diversity worldwide and testify to human creativity.

“If the element submitted is not recognised by UNESCO, the Culture Directorate and the CNSICH will review and evaluate the ration-

ale by UNESCO for its non-recognition. One hopes that the rigorous process adopted at national level will not lead to a futile nomination to UNESCO,” Mr Azzopardi said.

UNESCO representative Marina Calvo Perez paid a visit to Malta recently to give advice on how to set up the infrastructure in Malta to facilitate the evaluation and submission process. During her trip, she held several sessions with members of the Cultural Directorate, met relevant stakeholders and conducted a public information session. A report on the way forward will be presented by Ms Calvo at the end of February. Once the national inventory of national intangible cultural heritage starts to be compiled, the Directorate will explore all possible avenues of funding, including EU funding. “One has to keep in mind that intangible cultural heritage is different from tangible cultural heritage, such as monuments and palaces. In such cases, we shall need to explore different initiatives in order to find out how to safeguard

these elements from one generation to the next,” Mr Azzopardi said.

Besides the obvious cultural value of protecting such heritage, there is also real monetary value in protecting Malta’s intangible heritage.

“There’s no denying the fact that culture and heritage tourism tend to attract high-yield tourists. In fact, one study shows that a culture and heritage tourist spends as much as 38 per cent higher per day and stays 22 per cent longer overall compared to other kinds of travellers,” Mr Azzopardi said. “Moreover, there are indicators that show that the level of repeat visitation amongst this group of travellers is higher than that of traditional tourists.”

“In the case of intangible cultural heritage tourists, studies have shown that these trips are more memorable than conventional holiday trips, since they allow the travellers to learn something new. This focus on learning skills and gaining enrichment has been identified as a core global trend in travel, linking to broader macro trends in consumer needs,” he said.

“Protecting Malta’s intangible cultural heritage promotes the preservation of local traditions, customs and culture,” he asserted.

“It is a clear signal of our strong commitment to the conservation and nourishment of collective memory and national identity. A market for experiences and traditional projects provides the economic support for keeping these skills and traditions alive. This helps in building opportunities for healthy and useful community relationships and partnerships. Furthermore, it creates enjoyable opportunities for both local residents and visitors attracted to the cultural arts, history and preservation, and boosts local investment in heritage resources and amenities that support tourism services.”

24

e Business OBSERVER

| February 22, 2018

NEWS

HSBC Bank Malta announces lower profits but increases dividends HSBC Bank Malta p.l.c. reported a profit before tax of €49.8m for the year ended 31st December 2017. This represents a decrease of €12.4m or 19.9 per cent on the previous year.

The bank confirmed that its business model and risk management change programme was substantially completed in 2017, leading to a short-term reduction in profitability.

HSBC has announced €20m extraordinary dividend to reward shareholders given the strong progress made with implementation of its strategic plan.

The reported profit before tax incorporates three notable items which are excluded from the adjusted results as this is considered a better reflection of management’s performance.

In 2016, the bank recognised the gain on disposal of the bank’s membership interest in Visa Europe amounting to €10.8m and raised a provision totalling €8m in relation to a remediation of the legacy operational failure in the bank’s brokerage business. During 2017, the remediation programme was largely completed and it was assessed that a partial reversal of the conservatively-estimated provision was warranted. In this regard, a reversal of €1.8m was effected in 2017.

During the year, the bank re-examined its approach to the provision for the collective

agreement clauses related to future employee benefits. A longer-term view was assumed in the application of the current clauses which resulted in an additional charge of €7.6m in 2017 as compared with the charge of €2m in 2016. While the movements in this provision will periodically occur depending on the changes in the composition of the bank’s employee base, the provision adjustment in 2017 was not related to the business performance of the year.

Profit attributable to shareholders amounted to €30.9m, resulting in earnings per share of 8.6 cents compared with 11.2 cents in 2016. The Board recommended maintaining a current dividend payout ratio of 65 per cent of net profit. The Board also made a decision to return part of retained earnings to the shareholders and recommended an extraordinary dividend of €20m in addition to the regular dividend paid out of the net profit for the year.

The final gross dividend will be 12.4 cents per share (8.1 cents per share net of tax). Together with the interim dividend paid in September 2017, the total gross dividend for 2017 will be 17.1 cents per share (11.1 cents per share net of tax) or €61.6m (€40.2m net of tax) representing a 54 per cent increase on the dividends paid for 2016. The final dividend will be paid

Reported profit before tax Notable items: Gain on VISA transaction Movement in the brokerage remediation provision Costs of the provision for collective agreement benefits Adjusted profit before tax

on 19th April 2018 to shareholders who are on the bank’s register of shareholders at 13th March 2018.

“In 2017 we largely completed changes to our business model in order to meet the highest global standards for compliance and risk management,” said Andrew Beane, Chief Executive Officer at HSBC Bank Malta.

“While these actions reduced profitability during the year due to lower revenues and higher costs, they have materially strengthened the bank’s risk profile and position it well for the future.”

“Our changed business model is creating value for our shareholders, notably by generating dividends. Indeed, given the strate-

2017 €000 49,823

2016 €000 62,221

(1,800) 7,600 55,623

(10,787) 8,000 2,000 61,434

gic progress the bank has made, the Board was pleased to declare an exceptional dividend of €20m which reflects HSBC’s capacity to generate more capital than is required by our risk profile.”

“In 2018, within our changed business model, HSBC will increase investment in customer service and innovation to support growth over the medium term while sustaining the bank’s signature conservative credit discipline that supports strong performance through the full economic cycle. I would like to thank my colleagues for their outstanding commitment to HSBC in 2017 and our customers and shareholders for their continued trust,” Mr Beane said.

26

e Business OBSERVER

| February 22, 2018

BUSINESS UPDATES

THE TOOLS ON BUSINESS.HSBC.COM.MT ARE INVALUABLE TO HSBC’S BUSINESS CUSTOMERS

HSBC Malta provides new tools for businesses looking to grow HSBC Malta has launched the Guide to Business Borrowing section within its website, www.business.hsbc.com.mt offering essential information for business customers looking to grow their business.

Whether it’s a start-up or an already established business venture, getting access to the right type of finance can be crucial if one wants to grow, invest and create jobs. To help businesses make an informed decision, the Guide to Business Borrowing outlines some of the different types of solutions on offer, along with how to apply and what other support is available.

The Guide is complete with a step by step guide on how to write a Business Plan and build a Cash Flow Forecast as well as a comprehensive FAQ section in Maltese and English.

The business Loan Calculator provides a representative example of monthly payments once the loan amount and credit term are entered.

“For business owners, time is money. Their banking experience needs to be simple and convenient,” said Gordon Scicluna, Country Head of Business Banking, HSBC Malta. “With these new features, business owners can obtain first-hand information on what banks require to start a relationship. The online information provides the necessary tools and tips for customers who require finance to grow their business.”

The HSBC Malta business banking service is ideal for companies with sales turnover greater than €1 million per annum. More information can be found by visiting www.business.hsbc.com.mt or by calling 2380 8000.

“With these new features, business owners can obtain first-hand information on what banks require to start a relationship.” – Gordon Scicluna, Country Head of Business Banking, HSBC Malta

e Business OBSERVER

|

February 22, 2018

27

BUSINESS UPDATES

Delivering projects on time and within budget Business software projects are often complex and require a high degree of commitment from both the customer and supplier – commitment to effort and commitment to change.

This area of information technology is full of projects that fail or fall short of meeting customer objectives. In fact, a recent CIO survey placed the level of customer satisfaction with enterprise resource planning (ERP) and customer relationship management (CRM) projects at the very lowest levels of all IT projects.

At Computime Software, we understand these challenges, and implement strict best practices to circumvent potential project pitfalls. In doing so, we enjoy a consistently high customer satisfaction rating. 96 per cent of our clients say that Computime exceeds their expectations, while 99 per cent would recommend Computime to their peers.

PROVEN TRACK RECORD Computime have a positive track record of more than 35 years in business software implementations. Our philosophy is to be completely transparent with our clients from day one to completion – ensuring they understand the amount of time, effort, and cost required to implement a successful software project.

CLEAR AND CONSISTENT COMMUNICATION The client engagement process that we adopt starts with our first meeting and builds one layer at a time. The main objective is always delivering the maximum benefit at the minimum risk and cost to the client.

CUTTING EDGE TECHNOLOGIES We utilise cutting edge technologies from leading suppliers, along with our own IP, to optimise the use of the various technologies available nowadays. We provide our clients with choices, as we understand they each have unique technical requirements.

FIRST-CLASS PROJECT MANAGEMENT We firmly believe that most software projects should deliver value in stages. Expecting a project to meet all objectives in one single ‘big bang’ is often a recipe for failure, putting a massive burden on both the client and the implementation team.

As a result, we recommend initially focusing on delivering a few small, but measurable objectives. Together with the client, we ensure these are met, and then move

on to subsequent phases, always at the client’s pace.

EXPERIENCED CONSULTANTS AND DEVELOPERS We employ an experienced and multi-disciplinary team of business and technology consultants who ensure that the solution is built using technology that is fit for purpose, performs well, and integrates into the client’s environment. Our usability experts

certify that the software is easy-to-use by non-technical users. Our industry consultants interface with the client’s business users to ensure that their objectives are met. Our project managers oversee the entire implementation process and work with our account managers to keep the project on time and within budget.

For more information call 2149 0700, visit www.computimesoftware.com or email info@computimesoftware.com

Landmark Mrieħel project e Quad launched The Quad Ltd, a landmark Mrieħel project, has been launched to market. A joint project between the Tumas and Gasan Groups of Companies, the project includes four towers, ranging from 13 to 19 floors. The vision for this site includes a unique combination of location,

design, facilities, sustainability, and designation Covering 44,000sqm of mixed Grade-A office and commercial space with five underground levels for parking, The Quad will set the bar for the central business district concept in Mrieħel by providing a unique address, further cementing

the area into a recognised business centre. With a site area of 11,200sqm that includes 6,000sqm of piazzas and open landscaped areas, the project will deliver a modern, tranquil working environment to key local and global tenants.

Additionally, The Quad is on the road to achieving Platinum

LEED certification, making it the only development in Malta to achieve this status. LEED certification is a globally recognised symbol of sustainability. Achieving platinum status is no easy feat; copious numbers of studies are mandated into areas ranging from thermal studies, access,

sustainability, energy and much more. The Quad has also been granted Special Designated Area (SDA) status, as has previously been awarded to another 12 existing developments in Malta and Gozo.

Call 2778 8124 or visit www.thequad.com.mt to find out more.

e Business OBSERVER

|

February 22, 2018

29

BUSINESS UPDATES

Tracing the origins of money laundering and funding of terrorism John Scicluna, money laundering reporting officer within Bank of Valletta’s anti-financial crime function

Two new ro-ro ships to join Onorato fleet The Onorato Armatori family offers its customers in the cargo sector the newest and most avant-garde fleet available in the Mediterranean, with the arrival of two new German-built ships. The two ships will be the biggest ro-ro vessels in the Mediterranean, able to each carry up to 310 semitrailers with a capacity of 4,100 linear metres.

The first ship will be launched in May, providing services from the beginning of autumn, whilst the second ship will be operational towards the end of 2018.

They have been commissioned in line with the latest industry standards to ensure a low environmental impact through a reduction in emissions.

The Group is focusing its resources on modern ships which can attain higher speeds, reduce timeframes and ensure consistent punctuality, with a cargo capacity three times greater than the one currently offered; all key success factors in the logistics industry.

The objective of the Group is to completely replace the ‘Classe Espresso’ ships with newly-built, latest-generation type vessels in order to further consolidate its presence within the cargo market.

“Our policy of commercial expansion is continuing, and these two new ships further confirm our desire to invest in the cargo sector for our islands,” said Alessandro Onorato, the company’s CEO. “We offer a complete network, guaranteeing great capacity and fast delivery times. Haulage contractors can be increasingly competitive, continuing to develop and grow together with their markets of reference.”

Just a few days ago, the Group’s ro-ro vessel Giuseppe Lucchesi was presented in Catania. It will extend services offered to all haulage contractors which operate on the increasingly successful GenoaLivorno-Catania route, inaugurated a little more than a year ago.

With a 30 per cent growth rate obtained from cargo-based traffic in Sicily alone and a four per cent growth rate obtained in the highly competitive Sardinian markets, the prospects for the Onorato family in 2018 remain positive, ensuring that any challenges posed are overcome.

Moby, Tirrenia-CIN and Toremar are companies in the Onorato Armatori Group, a world-leader in maritime passenger and cargo transport for five generations.

JOHN SCICLUNA

As economic disruption continues to have a chilling effect on cash economies, digital currencies, which enable secure, peer-to-peer payments without the in-terference of central governments or banks, are gaining increased attention.

Payment methods have evolved through the ages from barter, to leather-made notes to the present day paper currency. Mankind is always seeking to hasten the process of concluding legitimate transactions, be they financial or business-related. Concurrently, individuals of ill-intent are also on the look-out for methods to transmit funds between peers in a faster and anonymous manner.

Are these new systems, which facilitate money laundering and the financing of terrorism, part of the reason for the fourth, fifth and now possibly even the sixth Ezropean Union anti-money laundering directives? e replies to the above will be derived with the cooperation of all regulatory bodies, professional bodies, estate agents, financial and credit institutions in recognising the pros and cons of digitalisation and in finding ways and means to be able to detect and stop their use for illicit and unrelated business activity.

Preparing your business for a new era in privacy regulation Curt Gauci e countdown has begun. Less than four months remain until the General Data Protection Regulation (GDPR) takes effect. Have you started your journey towards GDPR compliance? e extended EU data protection laws come into effect on 25th May 2018 and will affect all businesses one way or other. If you want to be certain your business is going to comply and avoid the potentially hefty financial penalties that failure to comply brings with it, the time to start preparing is now.

If your business collects, manages or handles personal data in any way, it’s highly likely that you’ll have to comply with the new GDPR. e definition of what constitutes per-sonal data has also widened, which means internal IT

security systems and policies will require change. e systems used by businesses to create, store, analyse, share and manage data can be spread across a wide array of IT environments – personal devices, on-premises servers, cloud services, even the Internet of ings. Cybersecurity, data privacy and data breaches will need to be

top-of-mind. e overriding question is whether data is at risk and which practices and technologies will effectively reduce that risk.

Curt Gauci is a director and co-founder of Kinetix IT Solutions, a local leading IT systems integrator. Kinetix are HP, Cisco, Microsoft, Kerio, Trend Micro and Symantec-certified partners.

30

e Business OBSERVER

| February 22, 2018

BUSINESS UPDATES

Increasing the prestige of Malta’s real estate industry David Dingli, Human Resources Manager, Dhalia Real Estate Services The White Paper published in 2016 was the first concrete step towards regulating the real estate industry and making estate agents more professional and accountable. A number of meetings with the relevant government authorities have been held, as the original version requires a number of amendments. Meetings have been cordial and in good spirit, with debate on the detail, rather than the principles.

The main challenge to the industry would be conformance to a new set of regulations. Some internal changes will need to take place in all companies to ensure compliance in daily proceedings and the capability to detect a lack of compliance, if or when it occurs. Another challenge could be related to recruitment. Indeed, we want qualified people to work in the industry but we cannot forget that the business model for the industry is that sales agents work on commission and do not earn salaries. If the requirements to obtain a licence to operate are too tough to obtain, then it could have a damaging effect on the number of new recruits. The questions that still need to be sorted out in this area relate to the level of training one needs to undergo before being able

Couturiers Charles & Ron showcase gown at Buckingham Palace Eminent couturiers Charles & Ron were welcomed to Buckingham Palace in London to present one of their gowns as part of the Commonwealth Fashion Exchange. The event showcased a wealth of design and artisan fashion talent from across the Commonwealth’s 53 countries.

“We are absolutely reeling from this incredible experience,” Charles & Ron said. “It was wonderful to be inside Buckingham Palace and to see our dress exhibited among such beautiful fashion from all over the world.

The highlight was our meeting with the Countess of Wessex, Sophie Wessex, who hosted the evening, as well as being praised for our design by Vogue editor-

in-chief Anna Wintour and American Vogue editor-at-large Hamish Bowles.”

While in London, Charles & Ron chose to stay at the Corinthia Hotel London, which supported their visit. The designers’ relationship with Corinthia is underlined by the fact that the duo runs an exclusive boutique from the Corinthia Palace Hotel in Attard. “The Corinthia Palace has actually been our base for a number of years now and we share a wonderful synergy with the whole Corinthia brand and its ethos.

We are very grateful for the constant support shown to us by Corinthia, both in Malta and internationally.”

to actually start working with clients – keeping in mind that during this time, the agent will not be earning money. So, this could challenge the present business model which will have an impact on the complete financial structure of the industry. The biggest opportunities for the industry would be the weeding out of the unprofessional players. Ethics and professionalism will take on a new meaning, information and advice given to clients as well as marketing techniques will have to be truthful, and agents will be held accountable for their actions.

Regulation will also attract new customers who will gain trust in the industry, resulting in industry growth.

At Dhalia we believe it is important for the client as well as the profession, to have the industry regulated. We are well-prepared for it as we have long since introduced the concept of structured induction training, as well as continued professional training for our consultants.

Through the implementation of regulation, the level of professionalism among real estate agents will increase, the appropriate service will be provided, and we will be able to build an image and prestige of the profession in a way that has never been seen before in Malta.

Harvest launches technology academy with the University of Malta Harvest, the technology division of Hili Ventures, has launched a technology academy in partnership with the University of Malta and the Faculty of Economics, Management and Accountancy (FEMA), in a bid to bridge the gap between the professional and academic spheres. By imparting applied knowledge to students, the Harvest Technology Academy also aims to attract talent to the group through a collection of career opportunities.

The Academy’s first initiative is a course in Contemporary Technology Management led by Harvest Chief Technology Officer Godwin Caruana for first- and second-year students at FEMA. The course began in early February and runs to the end of May, delivering a generalist view on technology.

“The Faculty recognises and strongly encourages such academia-industry relationships that forge lasting learning experiences and transfer of knowledge at all levels, spanning from teaching to

HARVEST CHIEF EXECUTIVE RUDOLPH MIFSUD SAYDON (LEFT) AND CHIEF TECHNOLOGY OFFICER GODWIN CARUANA (RIGHT) WITH PROFESSOR FRANK BEZZINA, DEAN OF THE FACULTY OF ECONOMICS, MANAGEMENT AND ACCOUNTANCY, AT THE UNIVERSITY OF MALTA.

research initiatives,” said the Dean of FEMA, Professor Frank Bezzina.

The Academy plans to co-sponsor the FEMA Dean’s Awards, further strengthen its internship programme in technical and business fields, and provide support through technical expertise and

equipment to students as they write their dissertations in liaison with academic supervisors. In the next few months, the Academy will offer a wider spectrum of accredited courses which will be more specialised and technical in nature and aimed at advanced students.