The Malta Business Observer, 25th July 2019

NEWS

Issue 100

Distributed with Times of Malta

| July 25, 2019

Tourism industry stakeholders raise the alarm over “unsustainable” practices impacting the tourism product, with the MHRA President saying there is no “political will” for a capacity carrying exercise. see pages 5, 6 >

BUSINESS OPINION Architect Konrad Buhagiar asks what is next for Malta’s built environment, in the wake of the new construction regulations. see page 11 >

Uncertainty over whether rent reform will bring stability Helena Grech Parliamentary Secretary for Social Housing, Roderick Galdes, who has overseen the rent reform guidelines announced in July, and President of the Estate Agents Section (EAS) within the Malta Developers’ Association (MDA), Douglas Salt, are at odds over the level of stability that these could bring to the rental market.

This year saw the Government finally announce the measures it has been working on to regulate the rental market. These include regulations limiting by how much the rent can increase – at a maximum of 5 per cent per year though they do not prescribe how much a landlord can initially charge a tenant; the new

reform also requires landlords to register all rental contracts, while it provides time restrictions on when tenants and landlords are allowed to opt out of their rental contract.

Earlier this month Parliament unanimously passed the proposed reform on the rental property market in the Second Reading. During the summer months, the reform will be evaluated at Committee stage, with the new rules set to come into force as of January 2020. Moreover, as from January 2021, lease agreements will have to be registered with the Housing Authority.

Criticism has long been levelled at the way the rental market operates in Malta, with tenants complaining that they are on the incorrect water and electricity tariffs; that it is very difficult to get a deposit back; or about the price hikes between one year and the next.

FOCUS Dr Malcolm Mifsud, co-founding Partner at Mifsud & Mifsud Advocates, critiques the proposed changes to the rent law, outlining the implications of the forthcoming regulations. see pages 12, 13 >

In contrast, Finance Minister Edward Scicluna had stressed that there is no crisis in the rental market and that over 80 per cent of Maltese are homeowners, with rent issues affecting a minority of people. Yet, last September, the Malta Employers’ Association sounded the alarm over property and rent costs being the main drivers of wage inflation. The lobby stressed that this is putting too much pressure on companies to raise their wages, as many foreign workers were not able to afford the rent hikes.

“Rent reform is all about stability,” said Mr Galdes when responding to a request for comment about the effects on the labour market brought about by the reform. “Greater continued on page 3

CASE STUDY Car sharing service, GoTo, has seen a steady rise in the number of clients signing up to use the firm’s shared vehicles, with over 8,000 members enlisting since the company was set up in October 2018. see pages 14, 15 >

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“e situation was already correcting itself ” – Real estate lobby President on rental market continued from page 1 housing stability for foreign workers will also result in greater employment stability,” he added. He said that meetings and consultations were held with various industry stakeholders, such as those in the gaming and finance sectors, throughout the formulation of the new guidelines.

When asked about the feedback Government and Mr Galdes’ office has received from landlords in response to the new guidelines, Mr Galdes said that he was informed by the Housing Authority that “it appears the majority of landlords are aware of the need to professionalise the sector and make it more just and fair.”

However, Mr Salt, EAS President within the MDA, and the point of communication between tenants and landlords, cautioned that “pedantic rules” being brought into place through the rent reform will result in people thinking twice about making an investment in a rental property, ultimately limiting supply. “Ironically this could lead to hindering what you depend on,” he argued.

Mr Salt insisted that the rental market had already been “correcting itself” when asked about whether the revised rules will bring stability to the growing job sector.

“There was a sudden rush of people entering the island, pushing demand for rental property, and a lack of supply to meet that demand. Many properties were then bought on plan, with a lack of construction workers in the industry to swiftly develop those properties.

This resulted in longer waiting times.

However, supply has slowly caught up and I believe that prices will stabilise, if not return to their value from a few years ago in certain areas of the island,” Mr Salt explained.

Asked about what landlords had to say in reaction to the reforms, Mr Salt explained that “[the reforms] are not very popular because they’ve gone completely the other way and they exclusively protect the tenant.” Under the proposed reforms, tenants are free to terminate their contract with two months’ notice, should they be under a twoyear contract. For a one-year contract, it is

illegal for tenants to default on their contract in the first two months, while landlords must give three months’ notice on

“Greater housing stability for foreign workers will also result in greater employment stability.” – Roderick Galdes, Parliamentary Secretary for Social Housing

termination of the contract. As a result, Mr Salt cautioned, landlords are unable to “plan ahead”.

Turning to the cap on rent increase of 5 per cent per year for contracts of one year or longer, Mr Salt stated that unless a landlord can get a certain return on their investment, it is simply not worth the cost and effort to rent out their apartment.

Yet, as a bonus for landlords and, as an incentive to register rental income, landlords will be eligible for tax incentives if they have longer-term tenants. For a twoyear contract on a one-bedroom apartment, landlords will receive €200 in tax credits; €300 for three-bedroom apartments; and €400 for units of three bedrooms and more.

Looking back on the many stories which have appeared in the media over the years dealing with the hardships of renting, Mr Salt stated categorically that “these tragic

cases you hear about in the media will not be solved by the proposed rent reform. I’m sorry to say that these are social cases that require a different set of issues to be addressed.”

Adding his thoughts about what he believes should have been done to address such issues, Mr Salt argued that, for one, sanitary regulations and conditions should it be strictly and stringently enforced so that it is not permissible for large numbers of occupants to live in a single dwelling.

Mr Salt also asserted that the rent reform guidelines do not adequately address the short lets market since they specify that, in the latter, contracts must be valid for a minimum of six months which cannot be extended. Moreover, a tenant has to give seven days’ notice before terminating the contract. In the meantime, holiday-home renting is to be addressed in a separate law altogether.

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More tourists in 2019 but industry insiders concerned about unsustainable practices Cassi Camilleri Tourism industry stakeholders have raised the alarm over “unsustainable” practices impacting the sector, which, this year, has seen a rise in the number of visitors to the island.

According to figures recently released by the National Statistics Office, the first five months of 2019 registered a 2.8 per cent increase in inbound tourist numbers – up to 929,979 - when compared to the same period in 2018. However, expenditure per capita, from January to May of this year, stood at €697, thus registering a slight increase of only 0.4 per cent, when compared to 2018, which stood at €694 per person. Moreover, the latter figures of the past two years show a general decrease from 2017, when expenditure per capita stood at €733.

In strongly worded comments to The Malta Business Observer, the Malta Hotels and Restaurants Association (MHRA) President, as well as private entities, have decried the rise of hosting platforms such as Airbnb and Booking.com – claiming they took business away from collective accommodation – as well as environmental practices on the island which are impacting the quality of the product.

“To increase the quality of the tourist, one must first increase the quality of the product,” MHRA President, Tony Zahra said. “In the past three to four years there has been a massive and unsustainable assault by the so-called construction industry on our built heritage.

Indeed, I now say that this is not a construction industry – this has been a destruction industry.”

Mr Zahra emphasised that a change of mentality was needed.

“We need to bring sanity back,” he said. “We need to start looking forward and be proud of what we

shall leave behind. The quick buck comes quickly and goes quickly.

Let’s look at what the Knights left us 300 years ago. Are we leaving anything which people are going to be proud of in 30 years’ time?

We need a change in mindset,” he underlined.

Industry operators echoed his sentiments. Refurbishing hotels will only get you as far as the door, said Jankarl Farrugia, founder of hospitality company Hotelogique.

Outside hotels, ongoing construction, roadworks, and beach overhauls are having an impact on visitors’ experience. “We need to ensure that such works are being carried out within the legal periods and times of day, and that construction sites are well covered up and concealed, and not exposed as an eye sore. Serious reinforcement is needed not just

“I now say that this is not a construction industry – this has been a destruction industry.” – Tony Zahra, MHRA President on these sites but also on the roads,” he stressed.

Eden Leisure Group Chief Executive Officer and Malta Business Bureau President, Simon Decesare, also pointed to the noise pollution prevalent all around the island. “Better building standards and equipment that favours less noise and dust are needed in all areas,” he said.

However, ensuring the product is up to standard is not enough, according to these stakeholders, who resounded the concerns laid out in the Malta Tourism Authority’s (MTA) National Tourism Policy.

Here, the MTA’s vision is one of sustainability and engaging in high-quality tourism which brings in better returns per capita. Malta’s size has its limits and therefore it is

understood that quality – of tourists – should trump quantity.

On this note, the MHRA President is in complete agreement, likening the current circumstances to those of the Hypogeum.

“The Hypogeum used to allow all visitors that arrived at the door entrance to this very unique temple,” Mr Zahra recalled. “Some years back, it was established that unless there is a limited number of people that visit the temple, within a few years there will be no temple to visit! It was established that the number of visitors cannot exceed 10 people per hour. So, the carrying capacity of the Hypogeum was established scientifically and we now have a world-class product which will be here for many generations to come. Regrettably, we seem to have stopped at the Hypogeum in identifying the carrying capacity,” he said.

Mr Zahra said he believed that a carrying capacity exercise is desperately needed, both to promote sustainability in the sector and to correctly identify areas that would benefit from investment. But the MHRA’s repeated plea has fallen on deaf ears, he said. “A carrying capacity exercise has been requested by MHRA for a long time now but there does not seem the political will to proceed with this initiative,” Mr Zahra reiterated.

Unfortunately, repeated attempts at contacting the MTA for comment on this were unsuccessful at the time of writing.

The rise of hosting platforms, and private accommodation, as well as the large number of unregistered rental listings, have become a major concern for many business owners, Mr Zahra said.

Indeed, a hotel performance survey recently conducted by BOV and Deloitte shows that occucontinued on page 6

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No “political will” to implement carrying capacity exercise – MHRA President continued from page 5 pancy levels in hotels went down by 5.5 per cent for the first three months of 2019 compared to last year.

“Much of the private accommodation is competing unfairly with licensed hotels, which means that as they are paying less and implementing lower standards, they can charge less than hotels and make better profit margins,” Mr Decesare stated, going on to highlight the problem with the surge in hotel permit applications.

Moreover, the success of the events supported by the Capital of Culture, the masses that creativity attracted, is proof that Malta can be

more than just sand and sea, according to both the MHRA President and Mr De Cesare. “The strategy of filling up the lower seasons through events and incentives is an excellent strategy and should be continued. We have been talking about this forever but little more than cosmetic improvements have been made,” Mr Decesare said.

This was reiterated by Hotelogique’s Jankarl Farrugia who went one further by saying that “tourists lack attractions on our islands.” His view is that there is a lot of room for improvement when it comes to our environment. “Other than historical sites, museums, an old movie location and an aquarium, there is

no real major attraction that could be considered as a landmark. We need a policy that encourages the development of such attractions, family parks or anything which a tourist can enjoy and remember.”

He also notes that green could be the future. “One must not ignore the fact that modern travellers prefer destinations that integrate sustainability into their holiday experience. They will expect a tangible commitment to the natural environment and will make their travel choices on the basis of demonstrable green credentials,” he added.

“Much of the private accommodation is competing unfairly with licensed hotels.” – Simon Decesare, Eden Leisure Group CEO

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Vintage vehicle stakeholders divided over potential abuse of regulations Helena Grech The issue raised in last month’s edition of The Malta Business Observer on whether vintage car owners were abusing the regulation on lower licence fees for vintage cars, potentially resulting in less fuel-efficient and older cars on the roads, was met with mixed reactions by the local regulator, the Vintage Vehicles Committee, and the main lobby group, Federazzjoni Maltija Vetturi Antiki (FMVA).

Questions have recently been raised about whether the policy, instituted between 2013 and 2015, establishing that all certified classic vehicles are exempt from road tax and are only required to pay an annual €8 administrative fee for the renewal of the licence, is being abused to save vehicle owners hundreds of euro in licence fees, while also disproportionately contributing to pollution coming from the transport sector. Currently, there are 11,457 vehicles registered under the vintage scheme, which was first introduced back in 2003.

The Head of the Vintage Vehicles Committee, tasked with approving registration applications of vintage cars, Judge Michael Mallia, said there was “no doubt” that some drivers were abusing the cheaper licence fees associated with vintage cars, but he did not think vintage cars were disproportionately adding to the vehicle emission increases on the island. “Vintage and classic cars do not disproportionately add to the problem,” he said.

Judge Mallia claimed that, of the total number of registered vintage vehicles, about 8,000 are on the road at one time or another, “mostly on weekends and holidays”. He added that the rest “are either undergoing lengthy restorations or garaged. Genuine vintage vehicle owners take great care of their vehicles and they are always kept in the best of conditions.

Compared to the other thousands of registered vehicles on our roads, the contribution of classic and vintage cars to the emissions problem is negligible,” he said.

At the same time, he added that “there is nothing wrong in using a vintage vehicle as a primary source of transport, so long as it is for private use and the vehicle is kept in as close as possible a condition to its original state as produced by the manufacturer.”

Turning towards the rule stating that vintage vehicle owners may only use their car for private purposes as opposed to commercial purposes, Judge Mallia referred to revised policies which enforced the use of black licence plates on those vehicles certified by the Vintage Vehicles Committee.

As a result, “black plate abusers stand out if performing any commercial activities and, when action is taken, these abusers are brought to the attention of authorities.” Despite this, he said that, “unfortu-

“Black plate abusers stand out if performing any commercial activities and, when action is taken, these abusers are brought to the attention of authorities.”

– Judge Michael Mallia, Vintage Vehicles Committee nately, there are quite a few who are not genuine vintage vehicle owners but who have used the provisions to their own benefit to escape the higher road tax.”

Echoing some of these thoughts, FMVA spokesperson, Stephen Zerafa, stressed that enforcement has tightened enough that unscrupulous vintage vehicle owners are being brought to justice, especially through reports that come in due to the identifiable black licence plate required of registered classic cars.

Yet, when asked whether he believes there is a loophole in the law, Mr Zerafa appeared to be at odds with Judge Michael Mallia, questioning the existence of a loophole in the first place, though attributing its non-existence to the “strict rules that are being applied rigorously by the Vintage Vehicle Committee.”

He added that it is “extremely difficult to certify a vehicle if it is not in very good condition. But problems arise after certification when lessthan-scrupulous owners allow their certified classic cars to deteriorate, because they’re not really interested in classics. These vehicles, because they now bear a black plate, are instantly spotted and reported.” Mr Zerafa, however, conceded that, even with good enforcement, it “may theoretically take up to a year to revoke an offending vehicle’s classic status.”

Further reiterating the comments made by Judge Mallia, he asserted that since the black licence plates stand out, “there are thousands of genuine enthusiasts who are shocked when they see substandard vehicles bearing classic

black plates.” He said this adds another layer of enforcement, with “many of them sending photos to report them [substandard classic cars], resulting in remedial action that eventually leads to the revocation of the classic status.”

Once again reflecting on Judge Mallia’s comments, Mr Zerafa contended that “this by itself is a fine enough sieve that effectively filters out the trash.” In summation, he stressed that the system works but “one must accept that it takes time to weed out offenders”.

Mr Zerafa revealed that due to enforcement tightening, “some owners are voluntarily surrendering their classic licences and reverting back to normal [ones].” Indeed, he added that, on the ground, members of the public have commented that the rules have gotten so stringent that they are discouraged from applying for a classic licence in the first place.

“The underlying, yet overarching, message here is that continued enforcement is the key to success,” Mr Zerafa claimed.

Asked to respond to environmental economist Dr Marie Briguglio’s call to have policy disincentivise the use of cars in general, Mr Zerafa agreed that intelligent policy decreasing car usage would be beneficial.

However, he added, “to target little-used classics as some sort of panacea is both misguided and

VETERAN, VINTAGE AND CLASSIC CARS According to the Policy Guidelines Used for the Classification of Vintage Vehicles, issued by the Land Transport Directorate, Transport Malta, the words Classic, Historic, Vintage, Veteran and Period are understood to mean the same and are interchangeable.

Vintage vehicle means an authentic and genuine vehicle 30 years of age or more (to be reckoned from the date of manufacture), as certified by the Vintage Vehicle Classification Committee, which is kept in a state which is as close as possible to its original state as produced by the manufacturer and which respects the spirit of classic and vintage vehicle preservation.

Source: Policy Guidelines Used for the Classification of Vintage Vehicles, Land Transport Directorate, Transport Malta

short-sighted. We must also keep in mind that the term ‘certified classics’ also includes veteran vehicles dating from the early 1900s, as well as heavy military vehicles that were used to tow anti-aircraft guns, and priceless antiques. It is plainly obvious that such vehicles are hardly ever used.”

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EDITORIAL

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A tug of war?

There can be no doubt that a reform of the rental market was urgently needed. The past few years have seen a dramatic increase in the demand for rental property, with thousands of expats making the island their home, driven by the rise in job opportunities across myriad sectors, including gaming, financial services, healthcare and hospitality.

As a result, prices have shot up, dictated by a market in which supply is constantly playing catch-up, a situation which has also fuelled further construction and infrastructural projects.

This has led to serious concerns about the sustainability and stability of the rental market, with many business leaders claiming the situation – characterised by short supply and the resulting high prices – is having a detrimental effect on the capacity to attract quality employees to the islands and is pushing wages up. Moreover, both Maltese and foreign tenants have decried what they’ve seen as abusive behaviour on the part of certain landlords, while the latter have defended what they stress are their rights under current legislation, and called for action on wrongdoers, who renege on their contracts and obligations.

However, the recently proposed measures – which are set to come into force as of January 2020 – have been met with mixed reactions, as this month’s cover story highlights. While the Government has expressed a commitment to addressing the difficulties being faced in the rental market – by both lessees and lessors – the latter have, according to Douglas Salt, President of the Estate Agents Section (EAS) within the Malta Developers’ Association (MDA), raised red flags. He, in fact, cautioned that these “pedantic rules” will make people think twice about investing in a rental property, ultimately hindering supply, and, thus, exacerbating the current situation.

There are, no doubt, issues with the proposed reforms, on both sides of the equation. For instance, the measure regulating the amount by

which rent can increase – by 5 per cent per year – is a welcome attempt to protect from inflation within a market which has seen an exaggerated hike in prices, without an equivalent surge in the quality of the product. Today, a two-bedroom apartment in Gzira or Swieqi, by way of example, rents out at over €1,200 a month, when that same apartment would have rented at much less just two years ago. But, with the proposed measures, what is stopping lessors from terminating current contracts and increasing their prices now, in preparation for the 5 per cent limit to come into effect in January? Shouldn’t there have been a moratorium on price hikes, to protect tenants from unscrupulous decisions?

On the other hand, and as pointed out by Dr Malcolm Mifsud from Mifsud & Mifsud Advocates in this edition, the registration of all lease contracts with the Housing Authority – a proviso which will come into effect in January 2021 – may prove to be controversial and impinge on property owner’s rights.

Dr Mifsud notes that the measure, effectively, gives the Authority the right to enter a private property – “even with the assistance of police” – to inspect and check whether it has been rented out illegally, or whether the owner is complying with all regulations. But, are such situations subject to ad hoc decisions and will there be specific rules and regulations dictating the circumstances in which such inspections should be carried out?

Ultimately, Government would do well to leave no stone unturned in ensuring the proposed measures balance the needs of people who have made Malta their home – whether they are, indeed, local or foreign – and the necessity to ensure a buoyant rental market. Should amendments to the current proposals be necessary, the authorities should not shy away from taking brave decisions.

Advertising Enquiries Tel: 2132 0713 Email: info@contenthouse.com.mt Advertising Sales Matthew Spiteri Director of Sales and Business Development Jean Mark Meli Senior Brand Sales Executive Lindsey Napier Director of Sales and Operations Sue Ann Pisani Advertising Coordinator Printer Progress Press Ltd.

BUSINESS OPINION

Never too late

Konrad Buhagiar

The construction industry has always been one of the major mainstays of the Maltese economy. The Knights of the Order of St John were forever initiating new plans, often fortification projects, and encouraging private investment, with a view to keeping the island safe and financially sustainable, as well as to keep unemployment down. The situation hasn’t really changed today. The national economy continues to rely heavily on construction which guarantees a high rate of return and provides what, superficially, might seem like long-term assets. But are they really long-term?

The recent collapse of three apartment blocks over a span of a few weeks, where demolition and excavation works were being undertaken on immediately adjacent sites, seems to point at a different future for our built environment on many levels, pun intended. The result of these unfortunate events was a new set of

regulations (LN 136 of 2019) which aims to provide some additional safeguards for third parties in the form of the requirement of increased insurance cover and more stringently regulated site methodologies.

More importantly, this unforeseen twist of fate has introduced a new actor on the construction stage: the Site Technical Officer.

The role of this new figure, who is to be engaged by the contractor, has erased historically established lines of responsibility on construction sites and a lot of teething problems are to be expected.

Perhaps the biggest flaw of the new regulations is that they do not address one of the root causes of lack of safety on construction sites, namely the regulation of the activity of contractors. As things stand today, anyone with access to some capital could acquire construction equipment, engage a couple of unskilled workers and become an excavation or demolition contractor overnight. No training, no minimum requirements, no audit or investigation is required, in spite of the fact

that the Civil Code places responsibility for the structural integrity of buildings jointly on the perit and the contractor. The former has been regulated since July 1919 – that’s a century! – while the latter has never been regulated at all.

This is not to say that there aren’t innumerable examples of

the skill and expertise of some admirable contractors who belong to the time-honoured building tradition based on classical apprenticeship and who guaranteed continuity in the trade, from father to son and from one generation to the next. But, perhaps, the time has come when the fascinating, but often messy, overlap be-

“As things stand today, anyone with access to some capital could acquire construction equipment, engage a couple of unskilled workers and become an excavation or demolition contractor overnight.”

tween Western and Oriental traditions, between modernist and premodern planning and construction methods, between local and international practice, has come to an agonising end.

Thanks to the hard work of the Kamra Tal-Periti in the last weeks, a system for the registration of contractors was brought into force on 10th July 2019, and this will be followed up by the licensing and classification of contractors later this year. The Kamra has already put forward its proposals in this regard, starting off with three registers: Building Construction; Excavation; and Demolition Contractors.

The catalyst for LN 136 of 2019 was, above all, the urgent need to protect public safety. Leon Battista Alberti, the famous Renaissance intellectual, had his portrait cast in the form of a medallion, at the back of which his motto was inscribed: Quid Tum. What Next. Malta now requires a similarly sensational event that will revolutionise our architectural visions and ambitions, and that will motivate us to create a more beautiful and sustainable built environment.

Konrad Buhagiar is a founding member and executive director of the Architecture Project (AP) network.

He was president of the Heritage Advisory Committee of the Malta Environment and Planning Authority, and also of the Valletta Rehabilitation Committee. He has lectured at the University of Malta and at several international institutions.

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A critique of the proposed changes to the rent law Dr Malcolm Mifsud The rent laws have been subject to political controversy for decades. In 1974, the Government of the day amended the Reletting of Urban Property (Regulation) Ordinance, where landlords, in effect, lost control of their property rented to Maltese tenants. With the 1995 and 2009 amendments to the Civil Code, rent was liberalised, and the protection of the tenant was removed, allowing landlords and tenants to agree between themselves, without the intervention of the law.

As a result, the forces of a growing economy have meant that the market dictates the amount of rent that is offered and accepted. This has brought about hardship in certain quarters. These legislative developments have created a rich collection of case law, where the Courts and the Rent Regulation Board have had many opportunities to interpret the law. Such interpretations have, at times, been in favour of the tenant and, at times, in favour of the landlord.

With the recent rental reforms, the Government has presented a Bill aimed at ensuring a high standard of fairness, clarity and predictability in contractual relations between lessors and lessees, and to safeguard and protect the right to

“With the recent rental reforms, the Government has presented a Bill aimed at ensuring a high standard of fairness, clarity and predictability in contractual relations between lessors and lessees, and to safeguard and protect the right to adequate accommodation.�

adequate accommodation. The question is whether this proposed legislation will result in significant changes. To be able to answer, the changes this Bill intends to affect need to be outlined, though it would be pertinent to point out that the Bill targets only residential properties and totally excludes commercial leases, which means that shop owners need not to worry for now.

The most significant change in the Residential Leases Bill is that lease agreements will, from 1 January 2021, have to be registered with the Housing Authority. The law today dictates that the lease agreements are private agreements and limited to the lessor and the lessee. An agreement is drawn up and signed by the two. The agreement is binding as long as a few basic elements are respected. The wiser lessees and lessors engage legal professionals to draft lease agreements, which will include eventualities that do not come to mind immediately.

In contrast, the proposed legislation will bind the lessor to register the lease agreement within 30 days of the commencement of the lease. The Housing Authority may in the future issue a sample lease agreement. The legislation is against a fee, which as of today has not yet been published. One has to see whether this is merely a token administrative fee or else something more. However, everyone knows who will pay for this registration fee, although the same proposed law dictates that the lessor can only charge for rent, insurance and condominium charges, apart from a deposit.

Another issue addressed in the proposed legislation is the lease period. This is left in the hands of the lessor and lessee. However, a lease must not be less than one year, with very few exceptions. This must have been included because it is not uncommon for lease agreements to be renewed on a monthly basis, resulting in uncertainty for those who want to create a home. Despite this, one year is still not a long time. The extension on these leases is also regulated, putting more of an onus on the lessor, who must send a registered letter to the lessee three months before the expiration of the lease, indicating that they will not extend the lease.

If no letter is sent, or if it is sent late, then the lease is automatically renewed for a further period, as mentioned in the registered lease agreement. This is basically a development of current case law in which the Courts allow an extension of the lease agreement in cases when the

DR MALCOLM MIFSUD

lease has elapsed and the lessee remains living in the rented premises, with the lessor allowing the situation to continue. Now, in the proposed legislation, the Government is binding the lessor to give advanced notice of non-renewal. Although well-intentioned, this may provoke property owners to keep the lease agreement to the minimum of one year, in the event that they forget or miscalculate the notice period.

Moreover, the proposed law deals with issues which arise when the lessee wants to terminate the lease agreement before the expiration of the lease period. Article 11 of the new Bill prescribes a period, ranging from two to six months, depending on the length of the lease, within which the lessee cannot terminate. Therefore, the legislator has, in actual fact, stipulated what is the di fermo period. There will be no penalty upon the lessee for termi-

nating the lease before it expires, as long as they keep to these time periods listed in the law. Therefore, the lessor may not seek compensation for an early termination of the lease agreement, apart from holding on to the deposit, which may have been paid at the beginning of the lease.

Can there be an increase in rent?

The proposed law says yes. However, it also stipulates that the increase may take place only once a

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FOCUS

year and it cannot amount to more than the Property Price Index issued every year. Therefore, it would seem that the lease agreement, as from 2021 onwards, would not be regulated by a table format over specific periods of time. Although this is more popular in commercial leases, it is not uncommon to find a schedule of increases in rent in residential leases, especially when they are long-term leases of a decade or more. This puts the lessors’ mind at rest that the rental value, in the long term, will increase. Yet, it is a known fact that the Property Price Index is not a reflection on the reallife rental value of properties and tends to be looked upon as being rather meagre.

This proposed legislation does include its own controversial articles. The main one is the power given to the Housing Authority through the registration of the lease agreements of private property. Indeed, the upcoming legislation will give the Authority new license over private property and leases. Officials from the Housing Authority will have the power to enter the rented property to inspect and check whether it is occupied, or otherwise, and whether the property is covered by a registered lease agreement.

Therefore, the Housing Authority will be allowed to enter private

“is proposed legislation does include its own controversial articles. e main one is the power given to the Housing Authority through the registration of the lease agreements of private property.” property, even with the assistance of the police, to see whether any property is being rented out illegally. I would imagine that human rights lawyers will have something to say about this and the abuse that may arise from this wide range of powers.

I find that the new law will not encourage and incentivise very longterm leases of 10 years and more.

With a little more thought this could be certainly achieved. Furthermore, one would also have to see how the Courts will interpret this piece of legislation.

Dr Malcolm Mifsud is the co-founding Partner at Mifsud & Mifsud Advocates.

Mifsud & Mifsud Advocates is a business law firm, which, among other areas of law, is specialised in property law, including rent law. For more information email: info@mifsudadvocates.com.mt

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CASE STUDY

GoTo’s car sharing service sees increasing uptake in membership LIRAN GOLAN, CEO AT GOTO.

Jo Caruana Car sharing service, GoTo, has seen a steady rise in the number of clients signing up to use the firm’s shared vehicles, with over 8,000 members enlisting since the company was set up in October 2018.

“Car sharing is already a successful part of the sharing economy,” CEO Liran Golan said, “and it is set to grow even further. It has become very effective across a number of countries, including Malta, and, increasingly, it is being seen as a tool for business clients as well as individual consumers.”

Indeed, the car sharing service has given many companies an effective solution that provides complete flexibility to their teams, without the need for major financial investment, the CEO explained, going on to state that more and more companies on the island are becoming concerned about the logistics of getting staff to and from work. This is especially true for global companies with international team members who do not choose to own their own vehicle on the island, Mr Golan said.

As a result, GoTo’s mission is “to improve urban lifestyles by developing shared transport solutions and providing the freedom of mobility.” To achieve this, it has put over 180 shared vehicles onto the roads in Malta and Gozo, along with over 450 exclusive car parking spaces, and made these available by use of its app.

“Each GoTo car potentially replaces 43 private cars on the roads,” explained Mr Golan, who

was also part of the company’s successful roll out in Israel. “That generates over 650 tons in CO2 emission savings, which means that car sharing can also contribute to a company’s environmental and CSR targets.”

GoTo members can make use of either one of its two main services – One-Way and Roundtrips.

One-Way trips are designed for short journeys, like getting to and from work, or heading to the airport. The service is extremely effective because users can book instantly, can use any GoTo parking spot, and will only pay per minute for the time they are driving to their destination. “It provides an effective way of getting from A to B,” Mr Golan said.

“A member can, say, jump in the car in Sliema and drive home to Ta’ Xbiex, where they will be able to park in a designated GoTo spot. It’s all done online, meaning there are no keys to pick up and no money to hand over, so it’s quick and easy, with parking spots and cars located all over the island.”

The Roundtrip service was launched more recently, and designed for longer trips, so users

can make different stops on their journey. “This service is a little different because users pick a car up and then return it to the same location at the end of their time with it; in between, they can go to as many destinations as they need to. In this case, payment is per hour and per kilometre. Bookings can be made up to three months in advance, allowing for longerterm planning.”

Of course, company car ownership does come with a number of perks, but Mr Golan explained that car sharing compares very favourably and actually works out to be cheaper. It is also cheaper than traditional car rental, and using taxis or cabs.

“Our research shows that company car ownership works out to €9.20 per day for a small car, with €80 fuel per month, and yearly insurance and licensing fees. With GoTo, the equivalent works out to €8.80 per day for 40 minutes of driving on the Business Plan rate at €0.22 per minute, and everything is taken care of. There are so many benefits, including the fact that it is more environmentally friendly, has transparent costs, includes free reserved parking, li-

“Companies across the island are making the switch to car sharing and they are feeling the benefits.”

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CASE STUDY

censing and insurance, and is flexible to scale,” he asserted.

And there are a variety of plans to consider for businesses keen to consider GoTo, and these could bring costs down even further.

GoTo offers solutions for businesses that want to provide employees with a transportation solution for business situations, like going to meetings or going shopping, and also for companies that want to offer GoTo as an employee benefit by granting them with minutes covered by the company.

Getting set up on GoTo is as simple for businesses as it is for regular users, and registration only takes a few minutes, Mr Golan explained, going on to encourage interested parties to download the app and create an account or, alternatively, to email the firm.

“We will be able to put them in touch with one of our dedicated B2B sales representatives and meet them in person. This gives us the chance to specifically understand any of their transport needs, and to discuss special offers, plans and trial packages,” the CEO explained.

Concluding, Mr Golan reiterated the positive outlook for the company. “The great news is that we know it is working. Companies

“ere are so many benefits, including the fact that it is more environmentally friendly, has transparent costs, includes free reserved parking, licensing and insurance, and is flexible to scale.” across the island are making the switch and they are feeling the benefits. Now we look forward to working with more and more of them, and to showcasing the many benefits of the car sharing model, and the wider sharing economy, for Malta.”

Visit www.goto.com.mt or email hello@goto.com.mt for more information on GoTo’s car sharing service.

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CASE STUDY

MINISTER MICHAEL FALZON

MFCS on track to spend €1.8 billion on social projects in 2019 Jo Caruana The Ministry for the Family, Children’s Rights and Social Solidarity (MFCS) will once again hit its target of spending €1.8 billion on social projects in 2019 – with that number expected to stay the same or rise even further in 2020.

Speaking to The Malta Business Observer, Minister Michael Falzon said that he believes it is every politician’s duty to provide a better standard of living to the citizens they represent. “The €1.8 billion we spend annually on bettering society is a mammoth figure – and that is in addition to the amount spent on both health and education, which also tie in,” he explained.

Among the many recent success stories achieved by his Ministry, Dr Falzon highlighted the Child Protection Act, which was unveiled in January and which passed through all stages in parliament at the beginning of this month. The “long overdue” Act gives priority to the rights and interests of children, and introduced various reforms that add protection to children, especially those in vulnerable situations.

The reforms include the appointment of special guardians for vulnerable children, making every decision taken appealable, and making it mandatory for professionals working with children to report cases of abuse. The new regulations also grant foster-carers the right to go abroad with a minor after notifying the agency.

“This Act was in the pipeline for a very long time,” the Minister explained, “and we are absolutely thrilled to have finally brought it to fruition. This law now clearly and strongly spells out that all decisions and actions under the Act must be in the minor’s best interests.”

The Minister noted the difficulties faced.

“These changes have been needed since the late ‘80s and it has been very challenging to make them a reality. Our Ministry, in particular, faces an uphill struggle because everything we do is connected to human beings, and that means a lot of very strong emotions must be taken into consideration. At last, after years of consultation, we are there. This Act is a huge step forward and a milestone for our nation and our children,” he stressed.

The Act also aims to improve situations for foster children and their carers. “Under this new law there is specific recognition for foster carers and they are now being afforded more flexibility to enable them to improve the lives of the children in their care.”

Indeed, foster care allowance is going up 40 per cent to €100 per week while “the most significant – and welcome – change,” according to the Minister, is that foster parents can now apply for adoption rights

after five years, down from the 10-year period previously enforced. “We believe this will make a huge difference to the lives of so many families eager to formalise their relationship through adoption and to provide much-needed stability in the lives of these vulnerable children. The Act has certainly favoured the process of adoption and made it easier for foster carers, and that has been a priority for us,” he noted.

On top of that, Dr Falzon also explained that a number of measures have been put into place to aid adoption, including a €10,000 grant for couples or individuals choosing to adopt from overseas. “We believe this will make a difference to the number of people who choose adoption,” he says. “There are currently three countries ‘open’ to adoptions to Malta – namely Slovakia, India and Portugal. We would like to increase that number, and are currently working with Bulgaria and Poland to, hopefully, open adoption proceedings there too.”

“ere have been tangible aspects to the campaign such as an additional two days of leave to encourage parents to spend that time with their children.”

‘Positive parenting’ has been another recent focus of the Ministry’s work, with a campaign having been designed to encourage parents to spend more time with their children, with the aim of improving family relationships. “There have been tangible aspects to the campaign such as an additional two days of leave to encourage parents to spend that time with their children,” said Dr Falzon. “But we have also led an educational campaign that we believe drives parents to communicate better with their children – by questioning how the children are feeling, how parents listen to their children, and how much time they had for them. We are now gathering survey data on the effectiveness of the campaign and what can be done to improve it further next time around,” he explained.

Of course, all of this is already a mammoth task for the Minister and his team, but there is also substantially more in his portfolio that needs to be taken care of – including care of the elderly. “Focusing efforts on this is becoming increasingly important because the population is ageing; we have nearly reached the stage when 25 per cent of the population is over 65,” he said. “This challenges our society because the birth rate is also going down. This is a demographic reality that we all face and something we are working hard on. But, imminently, in the next Budget, pensions will be going up again – for the fourth year in a row. This is a landmark policy of the Labour administration,” he stated.

Dr Falzon also cited numerous other success stories, including the implementation of a manifesto promise for severely disabled children and adults to receive monthly allowances equivalent to a net minimum wage, and the Making Work Pay

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initiative that has incentivised people to go into employment. “The result has been the lowest rate of unemployment ever, and the highest rate of employment ever,” the Minister said.

Dr Falzon then turned his attention to social housing and the work which is also being done there. “A total of €120 million has been assigned to social housing and we are planning to build over 1,000 units in the coming years,” he said. “Beyond that, there is also a drive to encourage people over 40 to buy their own homes as part of an equity sharing programme. Through it, people can buy 50 per cent of a property, while the Government buys the other half.

They are then free to buy the remaining 50 per cent at some stage in the next 20 years at the original price. It is finally giving many people who previously couldn’t even think of owning property the ability to achieve exactly that.”

Finally, Dr Falzon discussed the latest news on the rent law reform, which is due to be discussed at Committee stage in the coming months. “Our focus is on providing stability,” he said. “Leases will be for a minimum of one year, with a notice period on both sides. Equally, it will be clear how much the rent can increase in any given year. Together this should strike a good balance for both the landlord and the tenant. We’re not reinventing the wheel here – this kind of regulation exists across Europe and beyond, but I think we are reflecting the needs of society,” he asserted.

Looking ahead, the Minister stated that much of what the current administration

“e Child Protection Act is a huge step forward and a milestone for our nation and our children.”

has achieved “will be strengthened by the upcoming Budget.” Moreover, with the Child Protection Act coming into force, “we will be shifting focus to the standards that apply to the social services sector, and consultation is currently taking place with regards to care for the elderly. Our goal is to set standards in an organised manner across our portfolio,” he concluded.

MINISTER MICHAEL FALZON

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STOCK MARKET REVIEW

Market information as a driver for visibility, volume and clarity

Vincent E. Rizzo

The domestic capital market, through the Malta Stock Exchange (MSE) company announcement portal, has been inundated with the publication of a number of reports referred to as the Financial Analysis Summary (FAS) in recent weeks, pertaining to issuers of bonds aimed at the retail market and listed on Malta’s regulated main market.

The FAS is in adherence with the Listing Policies issued by the Listing Authority of the Malta Financial Services Authority (MFSA) in March 2013. Simply put, these policies require issuers of bonds targeted at the retail investor market to engage a stockbroker to prepare an FAS on an annual basis.

The FAS seeks to provide an overview of the issuer, its history, structure and business model, as well as a review of three-year historical financial information.

The initial FAS, which is published by the issuer as an appendix to the prospectus, would include a set of projections, which are reassessed the following year through a variance analysis. The variance analysis, as its name implies, provides an overview and an explanation of the variances between those forecasts presented in the prior year’s FAS with the actual figures achieved by the issuer (or guarantor, as applicable) during the period under review. As the issuer is expected to produce forecasts on an annual basis within the FAS, this variance analysis is undertaken throughout the lifetime of the bonds in issue.

Through the FAS, readers of the reports (who, as a minimum, are expected to include bondholders), therefore, have the benefit of following the issuer’s (and guarantor’s, if applicable) progress, or lack thereof, throughout the bond’s term while also using the latest information to assess the issuer’s credibility (in so far as the attainment of financial objectives are concerned), as well as the ongoing appropriateness of the investment from a credit risk perspective compared to market alternatives at the time.

Over the past couple of years, the number of bond issues has increased materially, although an increasing number of these issues have not been admitted to listing on the regulated main market but

were admissible for trading on the alternative Multilateral Trading Facility (MTF), operated by the MSE and branded as ‘Prospects’.

With respect to Prospects, the MSE advises that “securities admitted to the Prospects MTF are issued by small and medium sized enterprises (SMEs). Investment in smaller companies can involve greater risk than is generally associated with investment in larger, more-established companies and can result in significant capital losses. Securities issued by SMEs tend to be illiquid and investors should therefore seek appropriate advice before making any investment.”

By no means should readers assume that I am highlighting this point, in respect of Prospects, because there is no risk with investing in bonds listed on the regulated main market. Far from it. Every investment, irrespective of whether it is listed or otherwise, and irrespective of which market it is listed on, has its own risks, and existing or potential investors should learn how to appreciate this fundamental fact perhaps even more than they already do today.

The requirement for issuers on the regulated main market to publish this report has, to my mind,

“Every investment, irrespective of whether it is listed or otherwise, and irrespective of which market it is listed on, has its own risks, and existing or potential investors should learn how to appreciate this fundamental fact perhaps even more than they already do today.”

provided investors with muchneeded visibility and clarity to enable them to make informed decisions prior to trading in the bonds. The key term here is ‘informed decisions’. While there are regulatory requirements for transparency, information asymmetry can be detrimental in the efficiency of a capital market. The FAS, through its various disclo-

sures, aims to address the issue of information asymmetry by giving its readers an insight into what management aims to achieve during the forthcoming financial year and how it performed against the forecasts which had been disclosed in the prior year. What is unfortunate, however, is why this information, which is so important, is not being made available

by all issuers of securities irrespective of the listing venue or the type of instrument in issue.

Information generally flows to the market in a statutory fashion via earnings announcements either half yearly, in terms of regulatory obligations imposed by Listing Rules, or, in certain instances, quarterly, if voluntarily so adopted by the issuers. Investors use this source of important information to assess the investment (shares or bonds or both) in the context of the information and this, in turn, drives demand and supply and, therefore, creates movement and volume. The overall efficiency of a capital market depends on its operational efficiency but also on its informational efficiency. Operational efficiency focuses on bringing buyers and sellers together to the market and efficiency increases as more and more relevant information about the securities is published to the market periodically.

Readers should now understand the link between the value that the FAS has provided over these years, through the increased activity that we have witnessed in the market, both in terms of new continued on page 22

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STOCK MARKET REVIEW

Aim for quality, not quantity continued from page 21 issues but also in terms of trading activity in corporate bonds. Few appreciate that activity is now rather widespread in bonds, and most bonds listed on the regulated main market do trade almost daily contrary to popular perception.

I firmly believe that the introduction of this policy in 2013 has

been extremely positive, beneficial and much needed. Over time, the market has increasingly warmed up to this policy and I have no doubt that investors and analysts, in particular, look forward to the publication of these reports annually. If we are to aim for quality as opposed to quantity, I believe that it is high time that this policy is also introduced on

all issuers of bonds, the Prospects MTF included. Should this also include shares? Perhaps this is worth debating further. Could this be a first step in bridging the informational gap between local equity issuers and companies whose shares are listed on overseas markets?

Undoubtedly, over time, investors will appreciate the value

of these reports perhaps much more than they do today, as we are living in a particularly unreal situation where an investor, in both the regulated main market as well as the Prospects MTF, does not have access to the same quality and important information in equal measure. Unfortunately, with the way bonds are snapped up, probably irrespec-

tive of a proper assessment of their quality (or lack of), the need to provide more information to the market for better comparability between the various issuers increases drastically and becomes an urgent requirement.

Coupled with this, perhaps the time has also come for the market and the regulator to assess whether any adjustments to the content of the updates provided annually may be necessary to make their preparation and eventual publication more efficient. In this regard, more concise reports may also be something worth considering where the valueadded will increase if the content is restricted to material updates in the business of the issuer, a concise variance analysis and the forecasts including the underlying assumptions. As I mentioned earlier, these are the parts which add most value to investors and the market as most other information provided (such as structure, board composition, history, major assets, etc) would have already been made available nonetheless by the company via the Annual Report.

Let us collectively aim to improve on what has been done so far. Given its sensitivity and importance in view of the increasing numbers of borrowers and investors, we should hopefully all be pulling the same rope and aim for quality as opposed to quantity.

More information of the proper type can only be beneficial as long as the obligation is made on all as opposed to some.

Vincent E. Rizzo is a Director at Rizzo, Farrugia & Co (Stockbrokers) Ltd

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. © 2019 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

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NEWS

FIMBank extends payment cut-off time in drive for higher value service FIMBank’s extension of its international and local payment cut-off time to 4pm CET “underlines the bank’s commitment to provide a quality service to its esteemed clientele”, said Loranne Pace, Head of Banking Operations and Project Management at FIMBank. The bank recently announced that payments effected via its digital banking platform, FIMBank Direct, can now be processed on the day, subject to all criteria being met where applicable.

Ms Pace explained that “The bank is constantly enhancing operational efficiencies so as to deliver a higher value service to its customers. This added convenience and flexibility is a key step forward in maintaining FIMBank’s competitive edge as a bespoke provider of local and international corporate banking products.”

Over the years, the bank has engaged a team of international corporate bankers with experience in identifying customer needs and matching these with system solutions, complemented by dedicated support. The bank has also invested significantly in its offering for efficient international settlements in major currencies such as USD, which is enabled through its global correspondent banking network.

These settlement options are offered for same day and next day, for both normal and high value transactions.

Chris Trapani, Head of Cash Management and Central Customer Services at FIMBank added that “the bank is strongly geared to offer a wide range of corporate products. Our strategy hinges on the commitment to provide added value to our

local and international clients by focusing on specialised customer service and sophisticated systems. FIMBank offers corporate relationship support for all business needs, competitive USD and other currency deposit rates for the short and medium term, together with a strong international settlement reach.” He also explained that the bank provides treasury services supporting international payments in a large list of tradeable currencies at competitive rates.

The service experience is enhanced by the bank’s digital banking platform, FIMBank Direct. This platform is specifically designed to address the needs of corporate customers, providing a framework where accounts can be managed efficiently and securely. Such account holders may execute single and multi-currency funds transfers, as well as competitive Forex transactions, and benefit from other general banking products.

For further information about FIMBank, please visit www.fimbank.com or contact the business development team on cm.businessdev@fimbank.com

“e bank is strongly geared to offer a wide range of corporate products.”

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BUSINESS UPDATES

HSBC Malta launches €250m International Business Fund As part of its growth strategy, HSBC Bank Malta p.l.c. has launched a €250 million HSBC International Business Fund to support ambitious companies looking to steer their business to new horizons.

A launch event was held at The Sheer Bastion reflecting the campaign’s sea-faring theme as well as Malta’s rich maritime trade history. It was led by HSBC Malta CEO, Andrew Beane, together with Executive Director and Head of Business Development, Michel Cordina, and Head of Commercial Banking, Joyce Grech.

HSBC Malta CEO, Andrew Beane, said: “Today’s economy is global and interconnected and at HSBC we are able to connect Maltese businesses to fast-growing markets around the world. With the launch of our quarter of a billion-euro International Business Fund we are ready to support local companies that have the ambition to stretch towards new horizons.”

HSBC’s global reach and expertise help approximately 1.5 million business customers – from small

(FROM LEFT) ANDREW BEANE, JOYCE GRECH, MICHEL CORDINA

businesses to multinationals – unlock their potential. HSBC’s relationship managers are supported by specialists in four fields: Global Trade and Receivables Finance,

Global Liquidity and Cash Management, Global Banking, and Insurance and Investments.

More information is available on www.business.hsbc.com.mt

Malta’s premier international business award back with expanded competition The 2019 Malta International Business Awards (MIBA) offers a unique opportunity for businesses with an overseas venture to share their success story and gain recognition at home too.

Organised by Malta’s export promotion agency, TradeMalta, with the strategic support of HSBC Malta Commercial Banking, MIBA’s second edition is adding an Online Exporters category to the original seven awards: Exporter of the Year in Small, Medium, Large, and Emerging Markets Business; Innovation Exporter of the Year; High Potential Exporter of the Year; Online Exporter; and Overall Exporter of the Year.

This initiative enjoys the endorsement of the Office of the Prime Minister,the Ministry for Foreign Affairs and the Malta Chamber of Commerce, Enterprise and Industry, as well as the sponsorship of audit firm Grant Thornton, and the partnerships of marketing communications agency BPC International Ltd, and Big Exhibits.

“The awards are an opportunity for businesses to showcase their products and services and to celebrate the capabilities and ingenuity of their leaders and teams,” said Stephen Sultana, Chairman of TradeMalta.

The awards were recently open to enterprises with an internationalisation story to tell, be they exporters, providers of services, franchises or international businesses with head office functions in Malta. Applications have now closed with the number of entries being considerable across the seven categories. The finalists in the said categories will be announced at the beginning of September and the subsequent winners will be awarded on the 22nd November, during a gala dinner.

For more information, register now on TradeMalta’s Knowledge Platform, www.trademalta.org. The platform is part-financed by the EU through the European Regional Development Fund.

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BUSINESS UPDATES

e complete ERP solution for a multi-brand distribution business Direct Store Delivery (DSD) refers to an essential distribution method that includes route and truck load planning, route sales and delivery, merchandising, mobile intelligence, inventory control, and route accounting. DSD is essential for companies who distribute Fast Moving Consumer Goods (FMCG) to other businesses.

The key to growth and sustainability for distributors is to provide better customer satisfaction through speedy and effective route management, without increasing costs. They need to optimise resources, improve their invoice-to-cash cycle, and, at the same time, reduce operating costs per route. The optimal Enterprise Resource Planning (ERP) solution can help companies reduce errors, payment disputes, and administrative costs.

Expected benefits include increased revenue, larger orders, faster and more accurate delivery, accelerated cash flow, smarter in-

ventory management, improved customer loyalty, better performing sales and delivery reps, and reduced administrative costs.

MANAGE THE QUOTE-TO-CASH CYCLE WITH A MODERN ERP SYSTEM Distributors of any size face many of the same challenges, including rapidly changing customer demands, complex product inventories, and fluctuations in the supply chain. To overcome these issues, forward looking companies are implementing a single ERP solution that integrates and automates the entire quote-to-cash cycle.

A modern ERP system for distributors provides tools to help manage sales ordering, pricing, shipping, sourcing, and billing – letting you streamline your business processes so all your information is in one secure location. With accurate, real-time information available, situations requiring attention can be identified early and addressed quickly.

DRIVE COMPETITIVE ADVANTAGE WITH A FLEXIBLE FIELD SALES PLATFORM The platform enables you to integrate your field sales, distribution logistics, inventory management, invoicing, and payment collection; give your sales reps access to relevant information quickly and efficiently and eliminate the errors that come with pen-and-paper order entry or legacy software.

It also provides your field staff with mobile access to all customer, product, and sales information while on the road and allows your field reps to use any Android or iOS device – including offline functionality, so that they can access data and information from any location.

Drive even more sales by providing your sales reps with accountspecific pricing for individual customers, based on what you know about customer preferences and order history. You can also give discounts and cross-sell and up-sell promotions for different customers.

Even when making a delivery, your field reps will be prepared to make a sale from anywhere, at any time.

For more information on how Computime Software can help you optimise your distribution opera-

tion, increase customer satisfaction, and unearth new sales opportunities for route staff, visit www.computimesoftware.com/acumatica-erp or email info@computimesoftware.com

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July 25, 2019

BUSINESS UPDATES

GO TV customers to enjoy an enhanced TV experience with new free upgrade Calamatta Cuschieri Group appoints Head of Distribution Calamatta Cuschieri is proud to announce the appointment of Sergio Bellizzi as the Head of Retail Distribution as part of the ongoing strategic growth objective for the firm.

Mr Bellizzi who joined the firm in June 2019, brings with him over 20 years’ experience in financial services predominantly in retail banking and wealth management. Prior to joining Calamatta Cuschieri, he was Head of Distribution at HSBC Bank Malta plc. He started his career at Midland Bank plc and eventually transitioned into HSBC Bank plc during the takeover of Mid-Med Bank. During his time at HSBC, Sergio also had a number of overseas appointments in Ireland, Brazil & the United Kingdom.

Alan Cuschieri, Co-CEO of Calamatta Cuschieri said: “We are proud to welcome Sergio on board and we believe that he is the right person to be entrusted with taking the firm’s financial advisory serv-

ice to the next level. As the firm grows it has become crucial for the Group to recruit high calibre individuals that have the knowledge, drive and experience to head the company and to make a difference. We have made a series of high calibre appointments in 2019 which had a very positive impact both on the firm and our clients.”

Calamatta Cuschieri is one of Malta’s largest financial services firm. It has pioneered the local financial services industry from as early as 1972. The Group currently employs more than 160 people, and offers a wide range of services including Investment Advice, Live Online Trading, Life Insurance, Savings Plans, Pension Plans, Wealth Management, Software Development and Marketing services, amongst others. Calamatta Cuschieri is also the representative and main distributor for UBS Funds in Malta. For more information call on 2568 8688 or visit www.cc.com.mt

Hili Finance Company plc launches €80 million bond issue Hili Finance Company plc, a subsidiary of Hili Ventures Ltd, has launched an €80 million bond issue, maturing in 2029.

The unsecured bonds, at a nominal value of €100 per bond issued at par, bear an annual interest rate of 3.8 per cent. Funds will be predominantly directed to the acquisition of Kemmuna Ltd, the owner and operator of the Comino Hotel & Bungalows. €10 million will be advanced to Cobalt Leasing Ltd to finance the acquisition of new containers to be leased to shipping lines on a long-term basis. The remaining balance will be used to fund group-wide investment opportunities.

More information about Hili Finance Company plc’s bond issue is available from the Prospectus dated 18th July, 2019, which is downloadable at www.hilifinance.com or available from authorised financial intermediaries from 26th July.

Application forms are available from 30th July from authorised financial intermediaries. Subscriptions close on 20th August, or earlier if the bond issue is over-subscribed.

Interest on the bonds commences on 27th August and refunds of unallocated monies will be made by 3rd September. The bonds are expected to be admitted to the Malta Stock Exchange on 4th September.

Trading is expected to commence on 5th September.

Hili Finance Company plc will announce the basis of acceptance of applications and the allocation policy to be adopted by not later than 27th August, 2019.

GO has kicked off the first phase of an important TV migration exercise which will see thousands of TV customers wake up to a totally enhanced TV user experience.

This enhanced experience starts with a fresh new TV home screen featuring a more user-friendly layout. It provides immediate access to clients’ favourite TV content from one simple screen.

“We have been listening to our customers to understand what they want and how best they want our product delivered. Of course, this would never have been possible without GO’s heavy investment in true fibre technology which enables ultra-speeds and reliability, as well as 4G network which adds to the portability aspect,” said Nikhil Patil.

“Now, with the network enablers in place, we can push the next generation applications to our customers, starting from a rich TV experience in terms of choice of content, modern environment and

content quality. Indeed, I can safely say that, when it comes to features and functionality, GO has the edge and remains unrivalled in its service offering,” he added. This upgrade will be undertaken over

the course of a number of weeks and customers will be notified in advance of their respective migration dates.

For further information visit www.go.com.mt/gotv

Turkish Airlines adds world-famous holiday island, Bali, to its flight network Global carrier’s Istanbul-Bali direct flights will be operated seven times per week Flying to more countries and international destinations than any other airline in the world, Turkish Airlines inaugurated its direct flights between its home base, Istanbul, and world-renowned tourist destination, Bali (Indonesia), on July 17, 2019. Having operated with the airlines’ first Boeing 787-9 Dreamliner aircraft, which joined to its ever-expanding fleet a few weeks ago, TK 066 coded first flight took offwith 84 per cent load factor, carrying250 passengers.

Commenting on the newly commenced IstanbulBali flights, Turkish Airlines Senior Vice President Sales (2nd Region), Kerem Sarp said: “While our new generation aircrafts continue to join our fleet, we feel highly encouraged to launch new direct flights to farther destinations in the world. By inaugurating direct

flights to Bali, our second destination in Indonesia, we keep strengthening our mission to reach all corners of the world.”

Bali, Indonesia’s most popular holiday island, is flooded with tourists and explorers from all around the world every year. Welcoming its guests with its exotic nature, historical temples and palaces, the city offers immense cultural richness. Volcanoes and tropical forests, in the inner parts of the city, are the source of unforgettable memories for travellers to the city. The centre of the island also possesses cultural and exotic beauties as well as stunning beaches.

To view the flight schedules, visit www.turkish airlines.com, contact the call center on +90 212 444 0849 or visit any TK sales office.