The Business Observer 23rd October - Issue 12

INTERVIEW

Issue 12

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October 23, 2014

Distributed with Times of Malta

After years away from Malta, Tony Mahoney is back in Malta and is impressed by the changes in banking. see pages 10 and 11>

NEWS e maker of an autism breakthrough, AAT, is to be the first tenant at the Life Sciences Park. see page 5 >

Preferred bidder for Marsa Shipbuilding by next week Vanessa Macdonald At least two bidders have been called in for talks with the Privatisation Unit, which is expected to recommend the preferred bidder as early as next week, according to sources.

In March, 28 consortiums showed interest in the site but only six went on to submit bids.

The Business Observer has learned that one of those – Ablecare Oilfield Services Group – was for the whole of the 175,000 sq.m. site, with a proposal to use it for the oil and gas industry. The other five were for parts of the site and it is understood that the only one of

them called in for further talks was Melita Marine Maritime Hub Consortium.

The unit is keeping everything under wraps and the Economics Ministry said that as the final selection process was being concluded, it was not able to give any information.

But experts familiar with the site – who only spoke on condition of anonymity as the talks are covered by a confidentiality clause – said that Melita Marine would be interested in using the site for superyacht repair, a sector in which the company is already well established.

“The dock there was not designed for repairs. It was designed for the construction of hulls over a long period, so it takes a considerable amount of time to fill and empty. One way that it would be of interest for superyacht repair would be for Melita Marine to bring its floating dock into the huge dock, which could then be left filled with water to create more quay space. There is enough space for other vessels to use the dock.

That could work.

“But it would not make sense to split the area up between Ablecare and another bidder. The request for proposals actually said that if the site were to be dedicated

to oil and gas that only one bid for the whole area would be considered,” the expert said.

The Privatisation Unit identified four categories for bids: the oil and gas industry and logistics; ship repair, heavy industry, yachting and logistics; superyacht refit and repair facility and an offshore energy regional support base; and servicing of yachts, supply of hard-standing facilities and other services.

In the case of the first three categories, the projects had to make full use of the site.

Continued on page 3

NEWS To master-brand or not to masterbrand? And is that really the question? We asked stakeholders what they think. see pages 6 and 7 >

INDUSTRY FOCUS e Asset Quality Review out on Sunday will reveal the skeletons of European banks, but Maltese banks are still upbeat. see pages 12 and 13 >

e Business OBSERVER

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October 23, 2014

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NEWS

Mcast sets up entrepreneurship centre

Imminent decision on the future of shipbuilding site Continued from page 1 Projects submitted under the fourth category could make use of plots within the area.

The oil and gas industry category was identified by the Privatisation Unit as one with the biggest potential for effective use of the site.

This category would see the setting up of a rig-servicing centre and an academic institution for teaching and training.

“The government will ultimately have to decide whether it wants the site to be dedicated to just one activity – oil and gas – or whether it would prefer to hedge its bets on just a single sector and have a part of the site for other activities,” another source said.

“One thing is clear. Whichever route the government chooses, Malta stands to benefit. It is a very good site which will generate a considerable amount of valueadded.”

Another interested party who is also familiar with the site and the

industries being considered said there were many examples overseas of sites which had successfully adopted diverse sectors to create a maritime hub.

“The oil and gas industry always looks for a clean, coordinated facility with clear lines of responsibility in which to operate, due to their strict codes of conduct, corporate social responsibility and healthy and safety rules. This does not mean other companies cannot operate on the site, but they would need to operate under similar policies.

“Equally it does not mean that the site has to be closed to companies which require access to facilities such as the dock or fabrication shed. “ The site will be a showcase for the capability of the workforce, and will encourage skills transfer and increased training opportunities from committed long-term customers.

“Overall a clear holistic vision would deliver a better result than a disjointed, uncoordinated facility,” the source said.

Mcast has taken over four rooms at the Corradino Business Incubation Centre (Kbic), to be used as an incubation centre for students with entrepreneurial ambitions.

Mcast has been planning to instil entrepreneurship into students for some time and has already introduced it as a core subject to students from the various institutes who are following Level 4 courses. The intention is to eventually spread this to other levels.

Work on the centre started last December, with the launch held yesterday.

The tenants at the Mcast Entrepreneurship Centre will be mentored by Louis Naudi, who will also be lecturing at Mcast.

The four tenants chosen by the selection board are all involved with crafts although there is no reason why future tenants might not be service industries.

“The board looked at the business plan, but we are not just looking at viability.

“We are also looking for innovation and sustainability,” consultant Michelle Gialanze said.

The incubation centre will offer much more than a base. Seed capital will be provided through Malta Enterprise as a grant – with onerous reporting requirements. Other entities are also helping with evaluation, support and mentoring, such as EY, Microsoft and Vodafone.

“We hear a lot about the problems that start-ups face getting access to finance. But we believe that one of the most crucial aspects for entrepreneurs is mentoring as that helps them to avoid the common pitfalls,” Mr Naudi said.

“And the most common pitfall is that they lack selfconfidence and get disillusioned, giving up before

ROBERTO TWERASER, WHO MAKES LAMPS OUT OF SALT, WILL BE ONE OF THE FIRST TENANTS.

they even get to the selling stage. You cannot even begin to put a monetary value on the impact of having someone to hold your hand as this crossroads.”

He referred to a recent report carried out in the UK by the Royal Bank of Scotland, which showed that while many young people who want to set up a business give up their dream within 12 months, slightly older people tend to stick to it for longer – and a higher percentage actually get going.

The Mcast Entrepreneurship Centre is the latest in a string of incubation centres opened by organisations like the university and private enterprises like Microsoft. But Ms Gialanze believes that there will never be too many.

“Each incubation centre is different. Each has a different flavour. Mcast has strong art and design and engineering institutes so the projects submitted tend to have a more practical flavour, for example,” she said.

One of the four tenants is a prime example: Roberto Tweraser is a former Mcast art and design student whose thesis was on lamps made out of salt and resin. When he graduated he took up a full-time job but dreamed of starting his own company to make the lamps, which took years to develop as a feasible product.

“It is early days and although they are selling, so far I do not generate enough income to justify giving up my job. Unless you sell a reasonable amount, you find it hard to make it worth the packaging and marketing. However, if I can carry out more research and develop new lines in other materials like concrete, then I hope to have enough of a turnover to justify taking things to the next step.”

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October 23, 2014

NEWS

First tenants confirmed for Life Sciences Park The first tenant has been confirmed for the Life Sciences Park at San Ġwann: a local company will be taking up 800sq.m. in the coming months to focus on research which could lead to commercially-viable products.

The company, AAT, has grown phenomenally in just three years.

The founder, Adrian Attard Trevisan, combined the expertise gleaned from his degrees in audiology and engineering, as well as his doctorate in neurosciences and soon human physiology, to come up with a treatment for autism.

“While I was working at the European Space Agency on a braininterfacing project, I used to spend the weekend with a friend whose six-year-old son was autistic and would just cycle and cycle around the house. I wanted to find a way to help him get better,” Dr Attard Trevisan said.

After seven years of research, the solution was a headband with earphones, which is worn for just 40 minutes a day.

The easiest way to explain how the Mente headband works is to compare it to noise-cancelling headphones. The headband has EEG (electroencephalography) sensors which reads the brain waves of the autistic child – it is most effective when its use starts before the age of 12 – and creates sounds which dampen the errant Delta waves that cause some of the problems associated with autism.

Results are uploaded, with patient consent, to the cloud so that patients can be monitored from Malta, as well as by the patient and his or her medical team.

The headband has been a tremendous success in just 18 months and Dr Attard Trevisan said that the improvements seen in its users have been “dramatic”.

However, it is easy to forget the challenges of starting up some-

thing so innovative. He actually financed the company by selling his house, which he admits was a “very tough choice”, eventually bringing on board a few enthusiastic shareholders who believed in his quest – and who brought in more pragmatic skills that he happily admits he does not have.

Since then, he has turned down numerous full-time jobs, and although he lectures in both Milan and Malta, AAT is clearly a vocation and not a job.

“I preferred to be on my own.

It is so frustrating when you get heavily involved in a project but then have to watch everything grind to a halt because funding runs out!” he said.

He started with just two people and the group has already grown to nearly 20 full-timers, with a company producing the autism device, a research arm, a service

provider for clients seeking insight into neural responses and a company dealing with patents.

Production is already running at 200 units in the past eight months and demand is growing exponentially thanks to the appointment of distributors in 13 countries and exposure from conferences and peer reviews.

The research arm found a lot of closed doors in Malta, but its success has since managed to prise some of them open. It was, however, recognised in Milan as a research centre – the Institute of Human Physiology and Cognition.

“We do research and sponsor PhDs and any products coming on to the market from this remain our intellectual property,” he explained.

Dr Attard Trevisan’s researchers must, as part of their

employment contract, publish regularly in international journals and attend conferences to present clinical results.

“Sometimes I have to remind myself how far we have come.

Even large companies have problems getting FDA approval in the US so it amazing that we managed,” he said.

Clinical trials are now being run at Inspire on a larger scale, making the findings more statistically significant.

The AAT group will be moving its research arm to the new park, which is being driven by Malta Enterprise.

“We will have four state-of-theart laboratories, representing a heavy investment, which we are funding through retained profits.

However, a new round of investors is being sought,” he said.

ADRIAN ATTARD TREVISAN, FOUNDER OF AAT

“e research arm found a lot of closed doors in Malta, but its success has since managed to prise some of them open”

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October 23, 2014

NEWS

Branding debate goes on Politicians may disagree between themselves about whether there should be a single “Brand Malta” – but the chairmen of various entities affected also have different views.

The issue arose at the recent EY conference when Economy Minister Chris Cardona said that Malta should have a “master brand” while Malta Enterprise chairman Mario Vella felt that the messages should be tailored to the specific sectors that Malta wanted to target.

Later Tourism Minister Edward Zammit Lewis called for more coordination between different government agencies, but said he preferred a multi-faceted approach to branding.

Sometimes hindsight can be a great thing so the Business Observer asked a few former chairmen for their opinions – and found that there were different viewpoints as well as other aspects to be considered.

Philip Micallef, a former Malta Enterprise chairman, was hesitant about putting too much emphasis on the brand.

“Having one master brand for Malta is definitely not the one and only solution that will bring investment into Malta and cannot be seen as the panacea to Malta’s challenges.

“My humble opinion on this is that some top level branding such as ‘Malta is a quality location for business, culture, sports, cuisine, holidaying etc.’ must be coupled with sector specific branding in areas such as ICT, high-value added manufacturing, tourism, i-gaming, financial services etc.

Continued on page 6

“The promise is to deliver whatever the provider is stating they will deliver in its promotional material. A brand gathers credibility and weight if the provider meets those targets and expectations of the consumer”

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October 23, 2014

NEWS

‘If we don’t deliver what we promise our brand suffers’ Continued from page 5 Each sector has its unique selling points,” he concluded.

Kenneth Farrugia, the chairman of Finance Malta, sees the optimal approach to be a hybrid of a ‘masterbrand’ approach that would be linked to sectoral ones.

“When you look at promotional bodies such as the Malta Tourism Authority, Malta Enterprise and Finance Malta, what they have done is bring stakeholders together,

which has channelled their efforts and made them more organised.

“I understand that the intention is to have new promotional bodies for even more sectors. This is always a welcome development,” he said.

“However, there is no holistic approach across the sectors, which means that no one actually owns the brand. Shouldn’t we have a coordinated approach? There should be one centralised point of reference – which would then dovetail with the sectoral bodies.”

Mr Farrugia referred to the range of collateral available from the different bodies: “Do we need all these brochures? What if we had one which promotes where we excel – in my opinion having a stable and safe environment, and being effective, being able to react much faster than other places,” he said.

Louis Farrugia has seen the issue from the point of view of both the Malta Tourism Authority and Air Malta – as well as from his personal experience through Farsons.

“To my mind, having been involved and responsible for the promotion of two major Maltese brands over the last 30 years or so, I define a brand as a promise or a form of contract between a provider of a good or service and a consumer of that good or service. The promise is to deliver whatever the provider is stating they will deliver in its promotional material. A brand gathers credibility and weight if the provider meets those targets and expectations of the consumer.

“If one applies this reasoning to Brand Malta, we can build our brand by articulating what we believe we can promise in all spheres of promoting Malta, be it our tourist product, our jurisdiction to FDIs, our market to foreign suppliers etc., etc.

“One thing is clear: if we don’t deliver what we promise our brand suffers. If we do, however, we add value to our country’s brand every time we deliver. Any logo illustrating Malta’s offering merely identifies our product but the strength of our brand is not determined by how attractive it is but what our record of delivery is.” The issue of the logo’s role was also brought up by Joseph Zammit Tabona, a former chairman of both Finance Malta and Malta Enterprise, who said he agreed that we should ‘brand’ Malta.

“The question of branding is what comes to your mind when you mention a country – for instance the first things that come to my mind with Switzerland are banks, chocolates and clean climate. In my opinion we already have a ‘brand’ which most Maltese simply take for granted and that is the eight-pointed Maltese cross and possibly the Knights of Malta.

“I would suggest that we focus more on the eight-pointed Malta cross and identify eight pointers that should describe the Maltese people and its economy. I am listing them in no order of preference – and I have no doubt that others can possibly add or amend some of my suggestions: great history and tracing our origins some 7,000 years; Maltese people’s friendliness and safety on the island; good manufacturing base some of which have been here since the 1960s; excellent tourist attractions which has been on the increase year on year; for financial services we have a stable, political, legal and regulatory climate; a very ICT literate young community – hence being No. 1 for e-government services and gaming industry; being in the middle of the Mediterranean Malta is a strategic trading post; having the largest shipping register within the EU and the 6th in the world,” he said.

Economist Gordon Cordina was more dismissive about the impact a logo could have.

“You would have to invest millions in a branding exercise for people to recognise that logo. What we need is something that tells them who you are. We do not need to be recognised by millions but by the select few. We need a clean and clear image of what this country can offer select clientele,” he said.

“We need a clean and clear image of what this country can offer”

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e Business OBSERVER

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October 23, 2014

INTERVIEW

Rental income rising by up to 15% The rental charged by landlords has gone up by as much as 15 per cent in the past year in areas such as Sliema and St Julian’s, according to Frank Salt property consultants.

Demand has been building up to the point where a tenant can be found within a week, senior property consultant Bertille Lungaro Mifsud said.

“There are simply not enough properties available for us to keep up with requests,” she added, saying that this was encouraging more and more people to invest in properties as buy-to-rent.

“Tenants are looking for good properties, so you have to be prepared to pay €150,000 for a onebedroom flat,” she explained.

The rental scene has taken on a life of its own, shaped primarily by the gaming industry which has resulted in an influx of young, often single Scandinavians, who want to be in the hub of social life, with restaurants and bars just outside their door.

“There are also other nationalities and also families who might opt for somewhere quieter, like Balzan, but Scandinavians want the Mediterranean lifestyle,” property consultant Nadya Muscat said.

“In fact, very often a few of them get together to rent an apartment for anything from €2,000 to €3,000 a month. They want to enjoy the upmarket life...”

However, the economy has attracted other nationalities from member states with high unemployment, who come here in the hope of finding a job.

“This is good news for landlords as it means that even flats at the lower end of the scale – or outside the core areas – are also in demand,” Ms Muscat said.

The trend is for tenants to take up rentals for six months, giving them enough time to get used to

the island, sort out transport and settle into the job. Although some of them opt to buy, the majority tend to extend their leases.

For landlords, the game has also changed as online sites like AirBnB have made finding shortlets much more feasible. With some 800 properties in Malta now listed on one site alone, landlords are now weighing up whether they prefer a steady income of €700800 a month or to charge as much as €200 a day for a flat with a view – especially since there are now reputable property management companies, like Frank Salt Real Estate, which can take care of pretty much every aspect of the rental for very competitive fees.

“Even if you take into account the risk that you will not fill the property every day, and that it is seasonal, there is clearly the potential for a considerable income,” Ms Lungaro Mifsud said.

Another aspect of the rental market that has changed is

“Tenants are looking for good properties, so you have to be prepared to pay €150,000 for a one-bedroom flat”

whether flats are furnished or not. In the past, when the market was predominantly Maltese, the demand was for unfurnished, which is clearly no longer the case.

“We often advise tenants who make enquiries from abroad that they should not bring their own furniture down: that they should either put it into storage or sell it,” Ms Muscat said.

“But renting out furnished properties requires a bit of effort on the part of the landlords. Properties need to be clean and tidy and uncluttered. We are always there to help them with advice on how to ‘stage’ the property to make it more attractive.”

NADYA MUSCAT

BERTILLE LUNGARO MIFSUD

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October 23, 2014

INTERVIEW

Looking back on a decade of banking TONY MAHONEY left HSBC Bank Malta over a decade ago. When he completed his contract at Bank Dhofar in Oman, he had to decide between the UK and Malta. He told VANESSA MACDONALD that the lifestyle and friendship in Malta won, and he accepted a role as non-executive director of FCM Bank.

You went from a bank with thousands of employees under your responsibility to a bank with a dozen staff... What was the attraction?

My role at FCM is a non-executive one. I wear a number of other hats, including fundraising for companies around the world, for everything from the latest vaccine for cancer therapy (which I am dealing with right now in the US; we got FDA approval a few weeks ago) all the way through to shipping companies in Greece and property companies in Italy.

I deal with all of these from Malta, which is a great place from which to operate. These contacts bring a lot of business to Malta – such as the cancer vaccine, which could bring some activity here in the second phase aimed at Europe, the Middle East and Asia.

I associate your time in Malta with a turnaround in banking as the HSBC brand shook up the status quo and resulted in considerable investment and upgrading by its rivals. After 15 years, how do you see banking in Malta?

When I arrived some 17 years ago, there were literally four banks

– but we were the first real foreign bank. At that stage there was a small market and not much competition. It is now much greater.

People still moan that HSBC got Mid-Med for a song. But they also wonder whether the leap in quality in other banks and their investment would have happened if HSBC had not come along...

HSBC did not get it for a song.

The negotiations were very tough and that was the price that the bank was prepared to pay. I was in Cyprus recently and they said they wished they had kept HSBC because had they done so, they would not have had the problems they had. It could well have been a factor.

Banks do three things. They place money, they take money and they move money. As long as they stick to their principles, they will always do well. The capital ratios of the banks in Malta have remained high throughout the crisis. It is one of the very few countries I know that has hardly been impacted by the global financial crisis, which is incredible.

TONY MAHONEY

“One of the great things about Malta is its people’s skills and they are perfectly capable of handling the demands of a family office”

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October 23, 2014

It is down to prudent banking, and strong but robust regulation.

The presence of HSBC helped, in my opinion, but the real issues are those...

You mentioned that competition is much higher. Have we reached saturation?

Overall, Malta is very well banked. There are 26 banks in total here, five of which are core banks. Then there are banks such as FCM whose job is to keep the big banks’ pencils sharp, so to speak. They cannot afford to become complacent because they know that banks such as FCM are willing to differentiate in certain niches — for FCM, deposit taking at good interest rates, and its service.

There is always scope for more competition in a market but over the past few years competition has grown so much that I cannot envisage that a big new banking presence would arrive here.

Given the liquidity, it might attract deposit takers but in terms of lending, there is enough liquidity for Malta to achieve all its goals.

There is still scope for some consolidation, though.

You’ve had a lot of experience in the Middle East. One area we have not tapped is Islamic banking. Do you see a role for Malta to play there?

It is always possible but with core banking it is always best to stick to what you know and that is traditional and international banking.

I introduced Islamic financing at the bank I worked for in Oman, and it has done quite well.

Is there a conceivable demand here? Yes. Is there enough scale to make it worthwhile? That is what I would question.

Is Malta a natural place to have an Islamic banking window? In many ways it is the most natural place within Europe – but it is not a natural place given the complexities, skills and competences in the Middle East.

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You were also involved in family offices, an area that FinanceMalta has been promoting. Is there scope for these services in Malta?

Definitely. Family offices have tended to be based around Switzerland, which is a remarkable country but one which has lost some of its shine. I am speaking right now to a number of family offices who are looking to invest into Malta and if they do, I think it would be good for the Maltese economy.

Do we have the skills required?

One of the great things about Malta is its people’s skills and they are perfectly capable of handling the demands of a family office. The Maltese work hard and study to get better qualifications.

The message is clear: international companies like doing business here because it is easy to find a pool of intelligent, numerate and well spoken people.

Is there anything we should be doing as a jurisdiction that we have overlooked or not yet looked at?

The golden rule – which Malta has followed – is to take things step by step, which it has done.

Banking and rushing do not go well together. Malta is good at taking its time and doing things in the right way.

There are always areas where things could be done better. But I think Malta is actually already doing quite well... As a jurisdiction it has loads of ambition, it takes advantage of its EU membership very competently, and it has been able to achieve a status which is quite special within Europe.

It affords companies from the US, Switzerland, Africa, the Middle East and China a very good stepping stone into the EU without having to go through all the rigours of having to set up in other member states or stepping outside into Luxembourg or Jersey.

Malta has managed to keep a very clean image and all it needs to do is to keep that image,

“Malta has managed to keep a very clean image and all it needs to do is keep that image, working with the companies that want to do businesss here – but in a very smart way”

working with the companies that want to do business here – but in a very smart way. For example, I was very impressed by the way that Malta handled the Cypriot crisis. I give credit for this to both the regulator and the CEOs of the banks.

But if I can go back to why I came to FCM, I came to take a role here because it is a very interesting bank and it reminds me a great deal of the Midland Bank team I had here originally. One of them is actually here at FCM.

I get the same positive, energised team, who are not mired in bureaucracy. I opened an account here for myself – and it was a pleasant experience.

You are not the typical foreign customer. In the recent EY Malta Attractiveness Survey, it was one of the gripes: that it takes too long to open an account.

I know that it can take a long time. One of the challenges that Malta has to deal with is balanc-

ing ‘know your customer with offering a fast service. Here at FCM, we open accounts for people who already have other accounts in Malta so it is a bit different for us.

Wearing one of my other hats I was able to help a wealthy Chinese person last week who is looking to bring business to Malta as well as to open his personal accounts. It was tricky and we had to help him quite a bit. But of course, this investment could be very good news for Malta.

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October 23, 2014

INDUSTRY FOCUS

Banking sector still buoyant At least 11 banks from six European countries are set to fail the Asset Quality Review carried out on 130 banks by the European Central Bank, the results of which are due to be unveiled on Sunday.

Maltese banks are not expected to be among them – but does this mean that the sector has escaped the recession unscathed? With 26 banks and an EU bank branch licensed in Malta as at the end of 2013 (2008:23), the sector has remained fairly stable.

Compare this to the eurozone experience as a whole: there were 2,609 banks in 2013, down from 2,920 in 2008.

And total assets also took a huge knock, down 19 per cent from 2008 to €26.8 trillion at the end of 2013 – while Malta saw an increase of 13 per cent, according to the ECB’s Banking Structures Report.

The banking sector in the eurozone has also been hit by a

trebling in non-performing and doubtful loans, and operating profits also declined. The average decline in operating profits was

due to drop in Austria, Greece, Malta, Portugal and Slovenia, But this notwithstanding, banks in Malta seem fairly – if

pragmatically – optimistic. This may be due in part to the fact that many of them are finding their own niche and going for innovation, long a buzzword for the local regulator, the Malta Financial Services Authority.

For example, Sparkasse Bank Malta has become very strong in the provision of custodian services.

“A service provided by a few specialist credit institutions – not known to many but increasingly discussed in Malta – is the provision of custody and depositary services as defined by the Undertakings for Collective Investment in Transferable Securities Directives (UCITs) and Alternative Fund Manager Directives (AIFMD),” managing director Paul Mifsud said.

“This is a highly specialised service provided by banks specifically licensed by MFSA to safekeep financial and other assets for funds and to provide monitoring and oversight functions over the fund’s manager and portfolio. As the fund industry in Malta develops, it is inevitable that this service within banks will grow too,” he said.

Another bank which has a fairly unique offering is Fimbank, which uses Malta as the hub for operations in trade finance, factoring and forfeiting which is spreading slowly but surely across the globe.

But apart from international opportunities, Fimbank president Margrith Lütschg-Emmenegger also sees exciting developments locally. “Malta’s geographic location at the centre of the Mediter-

ranean has conditioned the island’s past and will continue to influence the future.

Malta has the potential to become a main hub as a logistics, warehousing and distribution centre from where international companies can service target markets.

“As a member state at the southern frontier of the EU, Malta can continue to play a significant role as a crossroad between the EU on the one hand, and North Africa on the other.

“One key competitive advantage is the fact that the Malta Freeport is just seven kilometres away from Malta International Airport, so sea and air links can be combined in order to provide efficient and costeffective solutions ideal for companies trading in time-sensitive cargo.

“What is needed is a long-term vision that inspires stakeholders to make Malta a trading hub for the rest of Europe and the Mediterranean,” she said.

However, new opportunities bring new challenges and one of those is the sourcing of appropriately qualified and experienced personnel. The recent EY Attractiveness Survey of Maltese foreign direct investors found that 11 per cent of banking respondents could not source local talent for their needs.

Ms Lütschg-Emmenegger had words of caution: “Malta’s financial services sector continues to rank as one of the world’s top financial jurisdictions and is positioned in the top 10 of the WEF Global Competitiveness Report.

“This position must be maintained and if possible also improved.

“Malta’s geographic location at the centre of the Mediterranean has conditioned the island’s past and will continue to influence the future”

e Business OBSERVER

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October 23, 2014

“The financial services sector is one of the most important employers of trained professional staff and it is therefore essential for central government to continue its investment in the University of Malta and to drive its transformation into a 3rd generation University. At the same time, it should broaden accessibility to, and to augment the percentage of, students pursuing tertiary education.”

The banking sector in Malta is dominated by HSBC Bank Malta and Bank of Valletta. This means they have an important role to play in the economy. Bank of Valletta, which has government shareholding, considers itself to be the ‘local bank’ and as such has long recognised the value of the SME sector as a driver of the economy.

“This led us to accentuate our efforts to assist SMEs in gaining access to affordable financing, whilst injecting more funds into the economy,” chief executive officer Charles Borg explained.

Its first success was Jeremie, the first risk-sharing instrument of its kind, through which 650 SMEs benefited. The bank has now launched the BOV 4 SME Financing product, which provides financing to SMEs at highly attractive interest rates.

“The BOV Start Plus program complements our solution by facilitating access to financing to micro-enterprises and start-ups, primarily by reducing the collateral requirement which constitutes the main hurdle for this sector. BOV is truly the bank of choice for SMEs.” In a market with such heavyweights, there is still, however, place for other banks seeking growth. Over the seven years that Banif Bank (Malta) has been in operation, it has established a strong market share comparable to that of a number of its peers.

A characteristic of Banif has been to approach the local market with new and innovative products. One of the latest examples is the bank’s lifestyle personal loan proposition, designed to allow customers to realise projects knowing their debts will not come to haunt them should things go wrong.

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“Malta’s financial services sector continues to rank as one of the world’s top financial jurisdictions and is positioned in the top 10 of the WEF Global Competitiveness Report”

“The take-up of this new product has been high as clients have realised they can purchase cars, consumer goods and other products or services at a very reasonable interest rate and with the comfort of cover for payments in case of instances such as

accidental death, disability or redundancy,”CEO Joaquim Silva Pinto said.

“At this point in time, Banif Bank has consolidated its business model that includes a network of 12 branches across Malta and Gozo, most of which

are owned, and seven business teams in its three corporate business centres.

“We now look forward to concluding our next investment phase which will see the bank strenghten its position further, and come to the market with an

even wider portolio of products and services.”

On Sunday, Bank of Valletta, HSBC Bank Malta and Deutsche Bank will find out the results of the Banking Book Audit and, where relevant, an appraisal of the real estate collateral held.

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CASE STUDY

Portfolio showcases top properties Malta Sotheby’s International Realty may only be a year old but its database of luxury properties is growing fast, with a selection of some of the most jaw-dropping put together in the first edition of a 100-page publication, Portfolio.

“Earlier this month, we beat other agencies who have been around for considerably longer and were given sole agency for a pair of joined apartments in Portomaso,” managing director Michael Zammit said.

“We are aspiring to become the recognised experts for this segment. We have already carved out our niche in the luxury property market – which does not only mean very expensive ones but also ones which are top quality. We cater for people who are looking for a lifestyle.”

The real estate agency, part of the CSB Group he co-owns, was the latest one in Malta to sign up with an international entity, Sotheby’s International, which has 700 offices in more than 50

countries. Its media partners include The New York Times, the Financial Times and the South China Morning Post, to name but a few.

“The network generates over 7,500 referrals a year, and in fact, one recently resulted in a €12,000 a month rental at Tigné Point,” he said.

It has been an exciting – and busy – year for the franchise. It sent representatives to an event in Taiwan last month, to the south of France a few weeks ago,

FROM LEFT: DIANE BORG BASCETTA, ALAN CINI AND MICHAEL ZAMMIT WITH THE NEW PORTFOLIO PUBLICATION.

“e real estate agency, part of the CSB Group, was the latest one in Malta to sign up with an international entity, Sotheby’s International, which has 700 offices in more than 50 countries”

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Affluent consumers more likely to purchase lifestyle property Affluent consumers in the UK, US, Brazil and China are more likely to buy a lifestyle property now than they were five years ago – and they are more likely to make a lifestyle property their primary residence.

Sotheby’s International Realty’s report on luxury lifestyles also found that a waterfront property was the most sought-after, accounting for 42 per cent of all searches – and 48 per cent of search in Europe – followed by 21 per cent for mountain. The report also looked at the factors ONE OF THE PROPERTIES EXCLUSIVELY REPRESENTED BY MALTA SOTHEBY’S INTERNATIONAL REALTY.

to Jersey last week and to Moscow soon. Of course, the network – and events like conferences – are a very effective way to market properties overseas. But the glossy publication, supported by several high-end brands, is a great way to complement this approach.

The first edition was put together by marketing executive Diane Borg Bascetta and creative design executive Alan Cini. The intention is to publish it twice a year. It will be distributed through key channels such as the La Valette Club, the yacht club and golf club, the diplomatic corps, and even operators of private jets.

“There are many lifestyle offerings in Malta and we are targeting the publication through them,” Ms Borg Bascetta said.

An online, flip-through, interactive version is also available to ensure effective worldwide dissemination.

The next step will be to create video walk-throughs of the properties.

“e glossy publication, supported by several high-end brands, is a great way to complement this approach” “Sotheby’s International has found videos to be much more effective than just photos. And of course, the video will not just feature the property itself,” Mr Cini explained.

“We will use drones to take footage of the entire area to give the whole lifestyle context. For example, if you are considering an apartment at Portomaso, imagine how much more impact it would have if you could show the marina, hotel facilities and so on.”

Just as Malta Sotheby’s International Realty benefits from its international principle, it also benefits from its links to owner CSB Group.

“The CSB Group has built up a solid reputation over the last 27

years, catering to a predominantly international client base. We are an approved agent for the Individual Investor Programme – better known as the citizenship scheme – and are able to offer complementary services like relocation and tax advice,” Mr Zammit said.

There is a buzz about the luxury property market at the moment, with Malta raising its profile on the international horizon, attracting the attention of a whole new cohort of high net worth individuals for the first time.

“The group is seeing a conversion rate of around 20 per cent, which is very encouraging,” Mr Zammit said.

Email info@maltasothebysrealty.com to receive an electronic or printed copy of the publication.

influencing a real estate purchase and found that 39 per cent consider family needs, 36 per cent look at location, 34 per cent take into account the return on investment and 32 per cent lifestyle. In fact, between 89 per cent and 99 per cent of them said that yielding a return on investment was a key factor.

The respondents chose ‘investor’ as they best way to describe themselves and had purchased an average of two properties in the past three years.

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e Business Observer is a new business newspaper distributed with Times of Malta every fortnight.

EDITORIAL

Do we really need Electrogas?

The ongoing media coverage about delays at Delimara and the possible impact these will have on government finances are masking a much bigger issue. Do we actually need the Electrogas plant?

We have gone from a situation where we were perilously close to not having enough generating capacity, with the clock ticking, to one where we will have too much.

Malta needs 430MW of generating capacity – even though it only needs that amount for a few weeks a year. However, when that demand is there, Enemalta has to provide it. This is hugely expensive for utility companies as they must invest in infrastructure which will basically remain idle for much of the time.

Marsa power station, which generates between 60 and 120MW has to be shut own, the sooner the better. The original 1990s Delimara plant, which generates about 120MW, will need to be phased out within four to five years.

The second Delimara plant generates around 90-100MW, and because it is run on hugely expensive gasoil, it is only kept for emergencies.

So we basically need to replace about 180MW. We have three options on the table at the moment: the existing BWSC/Shanghai Electric plant which generates 150MW; the so-far phantom €370 million Electrogas plant which would generate 200MW; and the €200 million interconnector to Sicily and mainland Europe, which will give us 200MW. Simple maths shows that we do not need all three for our daily needs. In theory, we could use Electrogas and the interconnector, only using the Shanghai plant to top-up when there is peak demand, or we could use Shanghai and Electrogas, using the interconnector for top-up.

The interconnector allows us to buy electricity at the most competitive prices, through access to the European grid. If we buy only what and when we need, we will clearly pay much higher rates than if we are contracted for long-term uptake. So it makes most sense for us to first use the full capacity of the interconnector – and only use Shanghai and Electrogas to complement them. Except we cannot do that. We are committed to buying all the electricity that Electrogas would provide for the next 18 years.

This explains the Chinese panic over their plant. They do not want to find themselves in a situation where Malta only buys 30MW from them and only for a few weeks of the year. What would they do? Sell the other 120MW to mainland Europe via the interconnector?

We know nearly nothing about the Electrogas contract but we do know that removing it from the equation would mean the BWSC plant would lose its source of gas.

The BWSC plant would either have to keep using expensive and polluting heavy fuel oil, or it would have to get it via a pipe from Sicily – for which we would have got EU funding, but for some reason, forgot all about since 2011.

There is another point that has been overlooked. When we laid the foundations in Sicily for the interconnector cable, they were sufficient for two cables and the second one would only cost €140-150 million, much less than the €200 million of the first. The ‘only’ comes with a caveat. While Electrogas was going to absorb the capital expenditure, who would pay for the second interconnector?

The government needs to balance security of supply against environmental concerns, capital expenditure against long-term cost, political promises against diplomatic commitments. Are taxpayers really getting the optimum solution?

Editorial Vanessa Macdonald, Head of Content (Business), Times of Malta.

Publishers Allied Newspapers Ltd. Content House Group Ltd.

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BUSINESS OPINION

Can Malta profit from eurozone’s slow recovery?

Philip von Brockdorff Last week’s fall in shares within the eurozone and UK is evidence of weak economic growth knocking investor confidence. The same can be said about the US, with the Dow Jones also falling.

Oil prices also continued to slide, with Brent crude falling to $83.78. It has actually fallen by over 20 per cent since the summer amid concerns about oversupply with output exceeding forecasts for future demand. The signs of economic recovery are still not visible.

Yet for Malta, with economic growth predicted to rise by 3.5 per cent in real terms in 2015, it is quite possible for local companies to identify business opportunities elsewhere, especially in emerging markets. A weaker euro also reduces the cost of doing business outside the eurozone.

But the key to successful investment lies in innovative ventures in emerging markets, possibly in partnership with reputable and established companies. That may sound overly optimistic, and local

companies to date have had mixed experiences of doing business in emerging markets.

It would be vital, therefore, for local companies to get their business models right and focus also on their strengths. Applying our domestic model for manufacturing won’t work in emerging markets. We are only competitive in services, in sectors such as catering, hospitality and education, which is likely to be successful in emerging markets.

And it’s the vast middle market that offers the best opportunities for business ventures. The highend services market is widely available in these markets for the well-to-do who can afford them.

You can go to a luxury resort in an emerging market but the middle market is still developing.

And there is no shortage of middle-income consumers in emerging economies!

Of course, anyone intending to invest in emerging markets would need to mitigate the risks by knowing who their partners are, the government they’re dealing with, and other relevant stakeholders. Through its agencies and the Foreign Affairs Ministry, government could play a key role in assisting local companies interested in investing in these markets, possibly by identifying independent and verifiable sources. Business-to-business alliances are generally believed to be the most successful ventures in emerging markets.

A second source of opportunity for investment by local companies

“e key to successful investment lies in innovative ventures in emerging markets, possibly in partnership with reputable and established companies”

is public-private partnerships. The forthcoming budget is expected to announce policy on public-private partnerships. So far, plans to encourage new PPPs have not taken off. The one PPP that comes to mind, the Environmental Landscapes Consortium, helped to embellish the landscaping of our roundabouts, public areas and gardens in Malta.

It comes at a price to the taxpayer, of course, but would we really want to revert to the previous arrangement, run by a government department?

As an economy we could certainly do with fresh ideas on PPPs, possibly in sectors such as transport, medical services, and care of the elderly. The funding arrangements of such ventures, however, cannot be allowed to lean heavily on the taxpayer, as this would defeat the scope of PPPs. Though government may decide to provide direct support for PPPs through subsidies or grants, in cases where the venture does not on its own merit achieve financial viability, the key motivation for government considering PPPs – the possibility of bringing in new sources of financing for funding public infrastructure and service needs – should not be overlooked.

The two sources of business opportunities mentioned in this article may provide further stimulus for private enterprise but above all they represent opportunities which are not so dependent on the eurozone and its current economic difficulties.

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STOCK MARKET REVIEW

International equity markets in correction phase

Edward Rizzo Global equity markets tumbled during the middle part of last week after poor data from the US heightened fears over the health of the global economy.

The Dow Jones Industrial Average index dropped to a low of 15,855.12 points on Wednesday, down by 1,495.52 points or 8.6 per cent from its recent high of 17,350.64 points reached on September 19 – the day of the flotation of the Chinese internet company Alibaba on the New York Stock Exchange. Likewise, the broader S&P 500 index shed 3 per cent on Wednesday to a low of 1,820.66 points, representing a 9.8 per cent decline from the all-time high of 2,019.26 points also on September 19.

European equity markets were harder hit last week with the FTSE MIB in Italy down 4.4 per cent on Wednesday, the CAC 40 in France losing 3.6 per cent and the German DAX declining by 2.8 per cent during the day. The European Stoxx Europe 600 index, a broader measure of the equity markets across continental Europe, declined by 3.2 per cent last Wednesday and by a further 2.9 per cent on Thursday morning to its lowest level since September 2013. The sudden decline last week resulted in the index

TRADERS AT THEIR DESKS IN FRONT OF THE DAX BOARD AT THE FRANKFURT STOCK EXCHANGE. PHOTO: STRINGER/REUTERS

declining by 13.8 per cent from its recent high on September 19, implying that the index officially entered a correction phase in less than four weeks.

A market correction refers to a decline of at least 10 per cent in an index or an individual security while a bear market refers to a drop of at least 20 per cent.

The UK’s FTSE 100 also entered correction territory as the stock market rout continued on Thursday morning with the index dropping to a low of 6,098 points compared to its recent high of 6,904.86 points on September 4. The FTSE 100 then recovered to close the day marginally above Wednesday’s close. However, it is worth highlighting that the 2.8 per cent slump on Wednesday represented the largest one-day fall for the UK index since June 2013 and its lowest level in the past 15 months.

S&P500 STOXX600 FTSE100 DAX30

2014 HIGH

20/10/2014

% CHANGE

YEAR TO DATE

2,019.26

1,904.01

-5.7%

3.01%

350.85

317.01

-9.6%

-3.43%

6,904.86

6,267.07

-9.2%

-7.14%

10,050.98

8,717.76

-13.3%

-8.74% *Source: Thomson Reuters

Bond markets were also impacted by the renewed global turbulence. The 10-year US Treasury yield surprised many commentators and crashed to a low of 1.86 per cent (the lowest level since May 2013) on diminishing prospects for a rate hike by the Federal Reserve as early as June 2015.

Likewise, the yield on the 10-year German bund dropped to a fresh low of 0.716 per cent last Thursday while, on the other hand, the borrowing costs of some of the

eurozone’s most highly indebted members started to climb again.

The yield on the 10-year Greek government bond climbed as high as 7.85 per cent (well above the 7 per cent level that is deemed as unsustainable) amid fresh political turmoil surrounding the country’s plans to exit its bailout ahead of schedule.

Greece is hoping to leave its bailout programme early and meet its funding requirements through the debt markets rather

than asking the three organisations (the European Commission, the European Central Bank and the International Monetary Fund) for more assistance. However, the renewed upswing in yields is making this situation much less likely.

Sovereign borrowing costs have also increased in recent weeks in Spain, Portugal, Italy and France despite the decline in German yields. This yield divergence is implying that the markets are

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Federal Reserve amid a stronger outlook for the US economy during the summer.

Following last week’s sell-off, while some commentators are viewing this as a temporary correction in a continued long-term bull market, others are arguing that it is the start of a bear market. Only with hindsight can we know with certainty what last week’s events represent. What is evident is that investors are finally digesting some of the recent gloomy headlines and, as a result, we should brace ourselves for much higher volatility in the weeks and months ahead.

Edward Rizzo is a director at Rizzo, Farrugia & Co. (Stockbrokers) Ltd.

“Investors are finally digesting some of the recent gloomy headlines and, as a result, we should brace ourselves for much higher volatility” speculating again on the prospect of a eurozone break-up.

Some investors may wonder what caused last week’s sudden volatility across equity, bond and currency markets. Data on retail sales and manufacturing activity in the US, indicating that the largest economy in the world was also being hit by a global fall in demand, was the catalyst behind the sell-off.

This added to the other gloomy headlines of recent weeks which initially seemed to have been ignored by the market but when taken altogether led to some panic movements last week.

The stagnating eurozone economy was the major focus over the summer which culminated in the German government cutting its growth forecasts for the next two years amid growing evidence that the country could slide into recession. The inflation figures across Europe at a 5-year low led to an increased likelihood of deflation.

The problem with deflation is that as consumers expect prices to decline in the future, they postpone certain purchases, creating a drop in demand leading to further price

cuts. This knock-on effect results in a worse recession.

Moreover, the international credit rating agencies Fitch and S&P revised their outlook rating for France downward from stable to negative after the French government last week announced delays in its plans to bring the country’s finances within the parameters of the eurozone. Furthermore, Italy, the third largest eurozone member, is likely to experience another economic contraction in 2014.

Market sentiment also weakened amid rising geopolitical tensions including the protests in Hong Kong and evidence of the spread of the Ebola disease.

Additionally, the withdrawal of stimulus measures by the US

Federal Reserve (which was instrumental in reducing volatility and pushing up equity markets since 2009) and the possibility of an interest rate hike in 2015 added to financial market fragility.

Recent comments from the Bank of International Settlements also created further anxiety. The BIS, the world’s oldest international financial organisation aimed at promoting monetary and financial stability, explained that “global financial markets are dangerously stretched and may unwind with shock force as liquidity dries up”. A spokesperson for the BIS also indicated that the biggest worry is a precipitous sell-off in the bond markets once the US Federal Reserve and other major central banks begin to tighten

monetary policy. The BIS added that this time it could be even more severe compared to the US bond market crash in 1994 when the Federal Reserve unexpectedly increased interest rates from 3 per cent to 6 per cent starting in February 1994 with the resultant effect that 10-year bond yields climbed from 5.2 per cent to 8 per cent. This naturally led to a significant decline in US government bond prices.

Currency markets also became increasingly volatile last week as the poor data from the US resulted in the dollar dropping to a 3-week low against the euro. The US dollar had rallied by over 10 per cent since May 8, to a two-year high of $1.2499 against the euro on expectations of an early rate hike by the

Rizzo, Farrugia & Co. (Stockbrokers) Ltd (RFC) is a member of the Malta Stock Exchange and licensed by the Malta Financial Services Authority. This report has been prepared in accordance with legal requirements. It has not been disclosed to the company/s herein mentioned before its publication. It is based on public information only and is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. The author and other relevant persons may not trade in the securities to which this report relates (other than executing unsolicited client orders) until such time as the recipients of this report have had a reasonable opportunity to act thereon. RFC, its directors, the author of this report, other employees or RFC on behalf of its clients, have holdings in the securities herein mentioned and may at any time make purchases and/or sales in them as principal or agent, and may also have other business relationships with the company/s. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Neither RFC, nor any of its directors or employees accept any liability for any loss or damage arising out of the use of all or any part thereof and no representation or warranty is provided in respect of the reliability of the information contained in this report. © 2014 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved

InterContinental adding luxury suites The InterContinental Hotel will be targeting guests willing to spend up to €4,000 or €5,000 a day, offering them extravagant suites measuring as much as a reasonably-sized apartment.

All will have their own large terrace with lounging and dining areas, and the bathrooms alone are nearly the size of a normal hotel room.

The hotel already has 451 rooms but will be adding two floors which will be completely dedicated to 30 luxury suites – along with a private outdoor swimming pool and restaurant for the guests.

The hotel already has 24 other suites which will also be completely refurbished by March.

The suites will have a butler service, and be a ‘trolley-free’ environment to offer a completely bespoke experience.

“We are looking at a completely new market, the world of private jets and superyachts. We will need to look at the right travel markets and the sort of people who travel business class with Emirates, for example,” general manager Martin Van Kan said.

“We believe that this segment has less seasonality than leisure guests and families, and they also tend to stay longer.”

The extension, which is being presented to Mepa today, will be made of steel and rather than disturb the hotel guests, the decision was taken to close the property down completely for a few months.

“The hotel is 12 years old so it will be given a thorough clean and maintenance will be carried out in all the areas. For the moment, we will be focusing on the new floors.

In a few years’ time, we will probably start to tackle the decor of the existing rooms,” he said.

The hotel will close down next month and reopen in February, while the new suites should be ready for guests by July.

It has been a busy time for the hotel, which has also completely recreated the Arena as a convention centre. The nearby Giorgiani Hotel is also being targeted with a few of its floors being redone. The new 110-room hotel will be rebranded as a Holiday Inn Express, marking the return of this popular brand after years.

Mr Van Kan is not at all dismayed by plans for other hotels in the area – although he hopes that the construction will be carefully managed to ensure the least disruption possible.

“It will be good to have other investors putting pressure on the

authorities to clean and tidy up the area... We will not be the lone voice.

We are actually quite disappointed that the refurbishment of the Radisson Baypoint is not going ahead as that was a very ambitious project which would really have challenged the rest of the five-star hotels!

“But improving the ‘arrival’ experience of guests in this area remains the biggest challenge. Perhaps we cannot change the profile of the people who come to Paceville but we can change how the area is used and we can fix the roads and the pavements,” he said.

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NEWS

PayPal usage almost double that of credit cards PayPal has extended its lead as the preferred method of payment online, and is now used by 88 per cent of Maltese, compared with 44 per cent for credit cards.

According to a survey carried out by the Malta Communications Authority, PayPal was only used by 31 per cent of online shoppers in 2008, but has risen steadily since then.

The three most popular foreign merchants are eBay, Amazon and Sports Direct, while the Maltese ones are Air Malta, Maltapark and Agenda.

The most popular country of origin for goods is the UK with 91 per cent, followed by China and Hong Kong with 44 per cent – with only a third of online purchases from Malta.

The reasons given for not buying from local websites are: no need to (36 per cent), prices are not as competitive as those on foreign sites (32 per cent), and limited choice (30 per cent).

The ninth study in this series once again gauged the growth of ecommerce use in Malta and Gozo and found that 54 per cent of respondents – including those who don’t use internet – buy online, up from 51 per cent in 2010 and 30 per cent in 2008.

Only 15 per cent of internet users have never bought anything online. The main reason given for not buying online is that the user is not interested or doesn’t feel the need to do so (32 per cent), followed by lack of knowledge on how to do it (26 per cent) and a preference to see/try an item before buying (22 per cent). Security doesn’t seem to be an issue. In the 2010 edition of this survey, preference to try out the products and security were the two most important issues.

The biggest spenders are male (81 per cent compared to 69 per cent female) and 97 per cent are in the 18- to 29-year age bracket.

There is a marked decrease as the age goes up and only 40 per cent of those aged over 66 buy online.

In terms of the amount spent, over half spend up to €500 a year, while a quarter spend up to a €1,000 a year, 12 per cent up to

€2,000 a year and 6 per cent spend more than €2,000 a year.

The most popular items bought from foreign websites are clothes and shoes (63 per cent), IT and electronic goods (45 per cent), books (35 per cent), and flight tick-

ets (28 per cent). The nature of the items changes for goods and services purchased from Maltese websites. In this case, the most popular are flight tickets (35 per cent), books/CDs/DVDs (23 per cent), booked service/appointment (11

per cent) and IT electronic goods (10 per cent).

Price and shipping fees remain the most important factors when choosing which website to buy from. Positive reviews about the retailer and products, a good

product description and security features of the website come next. Potential shoppers like websites that have good search facilities to find what they want, are user-friendly and have good site navigation.

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BUSINESS UPDATES

Eworld Ltd hosts Hewlett Packard for full-day seminar

T&A systems from AIS Technology Organisations of all sizes use time and attendance (T&A) systems to record when employees start and finish work. An electronic T&A system, such as those available from AIS Technology, enables an employer to have full information of all employee working hours and helps control labour costs.

Biometric T&A technologies, such as the hand reader, fingerprint reader or face recognition devices, provide additional benefits over traditional employee tracking systems as they increase reliability and reduce costly errors.

The key benefits associated with biometric technology include reduced payroll error through elimination of employee fraud, increased productivity and improved management reporting, resulting in an overall reduction in labours hours and running costs.

The choice of the biometric device for an electronic T&A system largely depends on the environment the business is operating in, and whether the device will form part of the company’s electronic security system.

As companies look to improve operational efficiencies, automating T&A management is a key area for direct savings. Deploying biometric T&A technologies, such as hand reader, fingerprint and facial recognition devices, virtually eliminates payroll errors associated with buddy punching, delivering significant return on investment.

Eworld Limited, HP authorised Gold sales and services partner, hosted Hewlett Packard to conduct a full-day business seminar at the Le Méridien hotel. An 80-strong audience, including Malta’s leading CIOs, IT management and professionals, from the private industry and the public sector attended.

Sasa Kerec, GM for HP Storage in Central and Eastern Europe, kicked off the HP sessions by giving an overview of the latest developments in HP storage technologies, and of how the HP 3PAR architecture enables seamless transition to the world of all-flash-storage. The team of seven HP product managers covered the range of HP Enterprise solutions. Key among these were the new HP ProLiant Gen9 servers, enabling triple the compute capacity with lower TCO, faster deployment and provisioning by HP OneView and accelerated memory, I/O, storage and networking. The switches, routers, wireless and management HP Networking solutions were also presented, backed up by Service Level Agreements and a comprehensive HP Education programme.

ING. RAPHAEL MICALLEF TRIGONA (EWORLD MANAGING DIRECTOR), NUNO FERNANDES (EWORLD ENTERPRISE SOLUTIONS AND SERVICES MANAGER), KEITH MUSCAT (EWORLD ENTERPRISE SALES MANAGER) AND WAYNE HEWITT (EWORLD BUSINESS DEVELOPMENT MANAGER), WITH THE HP ENTERPRISE TEAM.

Ing. Raphael Micallef Trigona, managing director for Eworld, introduced the event by thanking the HP team, whose commitment to present and meet Malta customers face-to-face was essential for business development. He said that the networking sessions with the local IT profession were very interesting and opened up further follow-on activity. He was further pleased to comment that the Eworld

enterprise team was fully certified to HP Gold Partner level on both sales and support tracks. This afforded the confidence required in this industry to forge long-term relationships and implement complex IT project implementations.

Contact Eworld on enterprise@eworld.com.mt or via their website www.eworld.com.mt/enterprise

Financing designed for SMEs Only a few days old, the BOV 4 SMEs Financing product is designed to support local SMEs in realising their capital investment projects. This limited offer brings together affordable financing and expert assistance, corroborating Bank of Valletta’s commitment to support this important economic sector.

Designed with a very attractive hybrid pricing mechanism, this product incorporates a fixed rate of four per cent for the initial four years, followed by a highly competitive interest rate thereafter. This incentive has been possible because the bank was successful in tapping funding from the European Central Bank Targeted LongerTerm Refinancing Operations (TLTRO).

Under this limited offer, SMEs can apply for financing of up to €700,000. Loan term

depends on the type of asset being financed and can go up to 10 years. This product can be used to finance investments in both tangible and intangible assets, and related initial working capital requirements.

Through this package, the bank will encourage investment in innovation, technological developments, renewables and other regeneration initiatives earmarked to ensure competitiveness and sustainable growth.

The BOV 4 SMEs Financing Product complements the BOV Start Plus Package, which is specifically designed to facilitate access to financing for start-ups and microenterprises.

Thus Bank of Valletta continues to position itself as the Bank of Choice for SMEs, providing credit responsibly while seeking

the appropriate financing solutions that assist this segment in growing its potential.

Bank of Valletta plc is a licensed credit institution by the Malta Financial Services Authority. Terms and conditions apply.

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BUSINESS UPDATES

Focal Maritime Services certified as an IATA Accredited Agent Focal Maritime Services has been certified as an IATA (International Air Transport Association) Accredited Agent. This accreditation certifies that airfreight cargo is handled by duly qualified personnel who have successfully obtained diplomas with credit in IATA and Dangerous Cargo handling.

As an IATA Accredited Agent, Focal Maritime Services will be able to boost its air cargo carriage operations, which is aimed at providing clients with a comprehensive coverage for all their logistics requirements.

Apart from the standard service by air, Focal Maritime Services can also offer a sea/air combination, which strikes a

healthy balance between price and transit time.

The airfreight service operates on a worldwide basis through a network of correspondents and use of first-class airlines, IATA qualified staff and full tracking facilities.

IATA is the trade association of airlines. Its mission is to represent, lead and serve the airline industry.

For further information visit www.focalmaritime.com

Information Systems Ltd celebrates 20th year of operation Information Systems Ltd (ISL) celebrates its 20th anniversary in business this year. Over the past 20 years ISL has grown to become a leading technology services company, serving businesses throughout Malta, Europe, North Africa and the Middle East.

Founded in 1994, ISL has delivered solutions to clients in diverse industries. These solutions have helped our clients increase responsiveness and improve their organisational structures while also providing and assisting their respective clients.

“Our mission and vision remain steady and unchanged.

Our focus is to ensure success for our clients by aligning their IT strategies with their business goals and ensuring that they get

the best return on those investments. We are focused on bringing deep talent and years of experience to clients that need this type of expertise to help make ERP solutions a real asset to their organisation.”

ISL’s flagship solutions, Eyesel Business Suite, Autoline and K8’s flexible modular architecture, together with industry-specific modules, allow ISL to deliver industry-specific ERP solutions within a single system.

Our solutions are based on an in-depth knowledge of the processes that drive your business, no matter what size of business you have.

While our team has contributed to our success over the years, none have contributed

more than our customers. “The secret to our success has been our ability to listen to, think, innovate, apply and support our clients, therefore offering added value at every step in the service chain.”

ISL also offers professional bespoke solutions for which project work is carried out in close coordination with the client throughout the full development life cycle. This ensures that the end result is a true representation of the defined business process.

ISL will attend and showcase at the Malta Institute of Accountants 2014 Conference to be held in November.

For additional information, visit our website: www.isl.com.mt

Shireburn Software supports Home-Start Malta Shireburn Software has extended its financial support to Home-Start Malta, a volunteer-based organisation that offers practical and emotional support to parents with children under five years of age who could be hit by crisis or find themselves struggling to cope with their young family.

John de Gorgio, managing director of Shireburn Software, stated that the company is delighted to support Home-Start Malta in its objective to assist troubled parents through its network of admirable volunteers. He said that Shireburn places an emphasis on giving back to the community and, in particular in this case, supporting the family structure and the positive upbringing of children, which ultimately holds the foundation to our very own society.

Alfred Grixti, CEO of the Foundation for Social Welfare Services, thanked Shireburn Software for this initiative through which it will be assisting Home-Start Malta in helping families who require assistance with parenting and to continuously support vulnerable families on a daily

basis. He appealed for more companies to come forward to support Home-Start Malta which is doing a sterling job in helping families at risk of poverty or lacking proper parenting skills.

Jacqueline Vella from Home-Start Malta said that Home-Start believes that the best place for the children is in their own home. The trained and supervised volunteers who visit the families in their home encourage the parents to work on their existing skills so that they may regain or acquire the desired confidence necessary to bring up their children in a caring environment.

There is no typical Home-Start family. Volunteers support the family according to their needs. They might help in budgeting, preparing meals for the family together with the parent/s, or accompany such par-

FROM LEFT: JACQUELINE VELLA, ORGANISER, HOME-START MALTA; REMENDA BORG GRECH, VICE CHAIR HOMESTART MALTA; CARMEN GALEA, COMMITTEE MEMBER, HOME-START MALTA; ALFRED GRIXTI, CEO, FOUNDATION FOR SOCIAL WELFARE SERVICES; JOHN DE GIORGIO, MANAGING DIRECTOR, SHIREBURN SOFTWARE; FRANCO GALEA, DIRECTOR, SHIREBURN SOFTWARE; AND CATHERINE FLERI SOLER, CHAIRPERSON, HOME-START MALTA.

ent/s for appointments at school, hospital or where otherwise required. Dealing with difficult situations at the right time can eliminate the chance of having circumstances deteriorate to an extent that children might need to be given care outside their home.

Ms Vella said that the financial support from corporates like Shireburn Software enables them to continue offering their service which stimulates a healthier and happier environment in which these children can grow and develop. Through various CRS initiatives, Shireburn has

supported local culture and heritage, history and art, the environment, as well as charities and NGOs through both cash and software support.

For more information about Home-Start Malta, call 2167 8043; 9901 8398 or e-mail maltahomestart@gmail.com