The Business Observer Newspaper - 8th October Issue

INTERVIEW

Issue 36

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October 8, 2015

Distributed with Times of Malta

OFFSHORE BUNKERING: MALTA SITS ON SOME OF THE BUSIEST ROUTES IN THE MEDITERRANEAN BUT ONLY PROVIDES 10 PER CENT OF BUNKERING SERVICES.

MCESD consultant Joseph Falzon spoke recently about the lurking ‘dragons’ in the economy. He suggests what could be done about them. see pages 10 and 11 >

NEWS e government wants to reduce the number of vacant properties and the BICC believes that inheritance bottlenecks would be a good place to start. see page 3 >

Demand building for free trade zones Vanessa Macdonald The government has already received several inquiries about new free trade zones and is planning to create a framework which would regulate, manage and monitor them.

Marc Muscat, an adviser to the Parliamentary Secretary for Competitiveness and Economic Growth José Herrera, explained that free zones would create a new valueadded sector.

“Free zones could be used for distribution, ‘break bulk’, repackaging, warehousing and light assembly, for example. And they could handle imports coming into the EU from third countries, or en route to other countries outside the EU. “This has long been a dream but what we are now trying to do is to create an enabling law – as part of a long overdue review of the Freeport Act – to make space for the private sector.

“Free zones are covered by strict regulations, within enclosed and secured areas, with controlled entry and exit. It is certainly not a case of having free zones mushrooming

“ere is clearly scope to grow, as long as we build a reputation for being professional and fair ” all over the country – or in a warehouse!” he said.

He said the government has not identified particular areas, although the stretch between the Freeport and the airport, a mixture of government and private land, had great potential because of its accessibility for transport.

The review of the Freeport legislation is just one of 50 proposals laid out in the Integrated Maritime Policy approved by Cabinet some weeks ago – which will be assessed for viability and priority by a steering committee.

“They might not all go ahead…The last thing we want to do is to create ‘white elephants’,” Mr Muscat said.

Another area identified as a priority by Dr Herrera is bunkering, which is beset by problems that threaten to derail this sector’s momentum.

“We hear too many remarks about problems giving this activity a bad name. It is often down to incidents – rather than to structural problems – but we all know that those who get bad service tend to complain to many other operators.

“We are not looking for abuse or corruption – we are not there to carry out a witch hunt. But want to see whether the ways things are done at present could create opportunities for such eventualities,” he said ominously, declining to comment further.

“Bunkering is regulated by different authorities – the Malta Resources Authority, Transport Malta and the Customs Department. Even with the best intentions, this could create loopholes as there is a problem with ownership.

“We are sitting on the busiest routes in the Mediterranean and yet only handle around 10 per cent of bunkering in the Mediterranean. There is clearly scope to grow, as long as we build a reputation for being professional and fair. It is not enough to rely on our geographic location alone,” he warned.

The third priority is setting up a maritime arbitration centre in Malta, and a call for expressions of interest has already been issued.

“This is a very competitive environment but we could certainly find our niche and attract international players. We could adopt the London Maritime Arbitrators Association’s rules, the mostly widely used internationally,” he explained.

“The fact that we have the sixth largest flag in the world is an advantage and should be seen as such. We need to understand the potential value added of this sector – otherwise, we are not going beyond the initial set-up of ship registration!”

Continued on page 3

CASE STUDY e price per square metre for property varies dramatically but the ‘hot’ zones are expanding.

Engel and Völkers Sara Grech managing director Benjamin Tabone Grech plots them out. see pages 12 and 13 >

OPINION Economist Philip von Brockdorff warns that economic potential remains somewhat constrained by bureaucracy, administrative costs and not-so cheap access to finance.

How can the Budget help? see page 15 >

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NEWS

Committee to assess proposals

BICC aims at inheritance bottlenecks The Building Industry Consultative Council (BICC) has made proposals to the government on ways to handle vacant properties whose sale is held up by inheritance disagreements.

At present, a property which has been inherited by a number of people has to be sold if those representing 75 per cent of the property value want to sell, irrespective of whether the rest agree or not. However, the BICC feels that this percentage is too high and is recommending, after consultation with various stakeholders, that this should be reduced to just over 50 per cent.

Heirs can also ask the courts to sell the property after 10 years and the BICC is suggesting that this period should be reduced to three years.

BICC chairman Charles Buhagiar said vacant properties represented idle investment and that the government should use whatever ‘carrots’ it had to encourage their use. He was against the idea of using taxation, however, saying that this was not as effective as creating the right environment to encourage owners to put the properties on the sale or rental market.

“The government will get as much revenue from stamp duty, tax on rental income, and so on, as it would from taxing the empty property. So why not encourage rather than penalise?” he asked.

The National Statistics Office had reported around 70,000 vacant properties in Malta some years ago, but of these only some 40,000 were vacant year round, and the number has since dropped because of rental demand.

The Federation of Estate Agents has whittled this down to a more realistic 20,000 by removing those properties that are rented out or not really viable.

“The vacant properties fall into three main categories. For those that are not sellable because they were badly built or whose location makes them unlikely to sell, the only solution is often to demolish them and start again.

“Others are simply overpriced – and this is often due to the high expectations of the heirs and owners. The property price index that we

“Vacant properties represent idle investment” are now working on will help to ease this by giving the sellers much more realistic guidelines,” he said.

“And there is then the category we referred to earlier: properties owned by multiple heirs who cannot agree between themselves.”

The BICC is also proposing that government should offer a lower capital gains tax on properties if they are sold within three years of their becoming vacant, as a ‘carrot’ to discourage owners from hanging on to them.

Mr Buhagiar also expressed his belief that growing demand for rental properties would entice more people to put their vacant properties on the market.

“And another pull factor is that the number of new properties being put on the market is

Continued from page1

much lower than the demand, so this will also gradually erode the vacant stock,” he said.

Mepa reported that permits were issued for 2,900 units in 2014, a far cry from the 4,500 five years ago.

“Another positive factor is that the economy is doing well, so it is more likely that owners will have spare funds to invest into a property to bring it up to scratch and put on the market. I believe that we should see the stock of vacant housing decline slowly but surely, especially if our proposals are taken on board during the Budget.”

Prime Minister Joseph Muscat said recently that the Budget might be a good opportunity to roll out consultation on what the government could do to solve the prevalence of vacant properties.

The Malta Developers’ Association has suggested a ‘carrot and stick’ approach, obliging owners to look after their property but in the meantime also offering incentives.

One of the issues, according to sources, would be to define properties whose status might make them eligible for refurbishment incentives, in order to prevent abuse.

Only 6,500 properties are considered to be ‘dilapidated’ or require serious repairs.

The steering committee will be assessing the rest of the proposals in the policy as well as coming up with their own – which is why the involvement of the private sector is so crucial.

The government has already appointed five members to the committee – the Fisheries and Aquaculture Department, Malta Enterprise, Transport Malta, Malta Freeport Corporation and Malta Resources Authority.

The parliamentary secretary is currently working hard to bring on board five representatives from umbrella organisations like the Malta Chamber of Commerce, Enterprise and Industry and the GRTU. The target is to have it set up by year end – although the first quarter is probably more realistic.

The committee will be part of what the secretariat is calling Malta Marittima, a public/private initiative that would evolve from the model created

by Finance Malta for the financial services industry.

The government will give it a boost by providing ‘horizontal policy coordinators’ from the civil service, who will coordinate maritime clusters, with specific areas of competency like research, innovation and education, spatial planning and environment, surveillance and security, and skills needs. Each cluster identified would also have a manager.

“It is hard for small companies to dedicate private resources to the general good of the sector. All too often, they join sectoral organisations and start off with a bang but then taper off as they realise all the time it takes from their business.”

Mr Muscat is determined to drive the policy from paper to action: “The integrated maritime policy for the EU was launched in 2007 by Maltese Commissioner Joe Borg and the ‘blue economy’ still features high on the EU agenda. Malta needs to seek its rightful place!”

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NEWS

EUROPE

Average premiums per capita

Average claims per capita

€203

Per capita insurance below average The Maltese are still taking up far less insurance than their European counterparts, according to a report published by Insurance Europe, a federation representing 34 national insurance associations, including Malta’s.

When it comes to life insurance, Malta’s per capita uptake is well below half the EU average, and with non-life insurance, such as home and business insurance, the figures are even lower: almost a third of the European average. Malta also fares poorly in motor insurance but the worst uptake is in health insurance, where Malta’s spend is around €25 per capita while the European average is just over €200.

“If people were not covered for health insurance by their firms as part of their benefits,

then the percentage would be even lower,” Malta Insurers’ Association general secretary Adrian Galea said.

In fact, in 2013, the number of individuals covered by private health insurance stood at 97,500 of which 85,000 were insured under group policies.

Average insurance paid per capita in the EU was €1,883 per capita in 2013, while that in Malta was just €783. In 2014, there was a substantial increase in Malta to €910.

This worked out to total premiums of €385.8 million for the island, with most of the increase coming from a 24 per cent increase in life insurance. Maltese insurers paid out €200 million overall in 2014, which includes claims as well as death benefits and other benefits.

€203

€166

€220

€166

Health

Motor

The MIA reported that in 2014, it paid out €44 million in motor claims, compared with €66 million in premiums. For health, it paid out 65 per cent of the €23 million received.

€154

Property

Health

Motor

€92

Property

MALTA Average insurance paid per capita was €910 in 2014.

Maltese insurers paid out €200 million overall in 2014 in claims and benefits.

In 2013, only 12,500 had private health insurance on an individual – rather than group policy – basis.

Malta had an insurance penetration rate of 4.58 per cent of GDP in 2013, compared to the European rate of 7.68 per cent.

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NEWS

EY warns about economic volatility of important and thriving sectors Attractiveness for FDI rises from 79% to 84% The operators in today’s successful sectors, unlike their ancestors in manufacturing, incur much lower costs if they have to pack up and leave for a better financial and economic climate, the EY Malta country managing partner Ronald Attard has warned.

In his foreword to the annual EY Malta Attractiveness Survey for 2015, themed Malta: Open for Business, he said that sectors like financial services, i-gaming and shipping were more volatile.

“They just unplug their server – assuming that it is here – turn off the office lights, put their key personnel on a plane and start operating somewhere else the next day. Of course, in practice it may not be so simple but it is easier than relocating a manufacturing plant,” he said.

“Operators in the thriving sectors – from i-gaming to game development to asset management, and many more – are all much more physically mobile than at any other time in our foreign investment history.

“As in the past, these foreign investors are here almost exclusively because we offer a better financial proposition compared with other countries. We therefore need to strive to build a healthy and robust

“Operators in the thriving sectors are all much more physically mobile than at any other time”

ecosystem for these new industries to increase their stickiness and drive long-term attractiveness.”

The EY report found that Malta was more attractive for FDI in 2015 than in 2014, and that more companies intended to still be here in 10 years’ time (see graphics). But he nevertheless found red flags, the main one being our competitiveness.

“The more economically successful we become, as almost full employment becomes an economic fixture, our cost competitiveness could possibly suffer. To be clear, I am not suggesting that better pay packets and conditions must necessarily undermine competitiveness. The two are not mutually exclusive.

“My point is that we need to keep a careful eye on the underlying pressures which are driving costs upwards,” he said.

Mr Attard said that one of the bottlenecks was labour supply, both in terms of supply as in terms of closer alignment with the requirements of the higher valued-added and knowledge-based sectors.

EY suggested three objectives: exploring new high-value added, knowledge-based sectors and niches; continuing to be at the cutting edge of technological developments; and incentivising new labour sources in areas where there are not enough Maltese workers.

It also made six specific suggestions, saying first of all that Malta could take a lead in regulating online financial services.

“These can take the form of crowdfunding, peer-to-peer lending and similar platforms. At present, there is no pan-European legislation on these services and Malta can do what it did with online gaming a

EY Malta Attractiveness Survey 2015 results

55 % Yes

71%

22

% Can’t say

to be present in Malta

59%

24% Expansion No plans in Malta

2015

2014

Note: does not add up to 100% due to rounding.

91%

88% 86%

3% 2011 Yes

79%

9%

11%

6%

3% 2012 No

84%

3% 2013

15%

11%

6%

5%

2014

2015

Don’t know SOURCES: MAS 2015 RESPONDENTS.

decade ago – take a lead in regulation in Europe,” the report said.

The second suggestion was to turn Malta into a commodities trading hub, including regulating certain activities and developing a global trader type of programme.

EY said that Malta should also ensure it has the best legal infrastructure in Europe for logistics.

“To get there we would need to look at duty, customs, clearance processes, costs [particularly government-induced], and ways of stimulating capacity subject to state aid rules,” it said.

Following on from this, the fourth suggestion was for Malta to become a hub for Asian ecommerce by making it the key Mediterranean and European destination for goods sold online in Asia for distribution to businesses and end consumers all over Europe.

Improving the transport infrastructure, which is regularly cited as a cause for concern by FDI operators in Malta – rated as negative by 32 per cent in this survey – was the fifth suggestion, with the last being tapping into the

skills of irregular migrants to plug the labour gaps.

The respondents to the survey scored the stability of the social climate as the more attractive parameter (90 per cent), followed by the stability and transparency of the political, legal and regulatory environment (85 per cent) and corporate taxation (75 per cent).

Transport and logistics infrastructure got the highest negative rating, followed by R&D and innovation environment and the size of the domestic or regional market (both 21 per cent).

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INDUSTRY FOCUS

Wish list for the Budget 2016 Whether it’s pensions, healthcare or financing, the presentation of the Budget is always a good opportunity to stop, take stock and plan ahead.

Deborah Schembri, managing director at STM Malta Trust and Co. Management Ltd, feels it is time to focus on workplace pension schemes, which do not oblige the employer to contribute but to facilitate the provision of a personal pension scheme to workers. There had to be relevant income tax relief in relation to an employee’s contribution to such a pensions scheme. Having an annual capping, the tax relief has to be such that it will incentivise individuals to save for the future.

The total pension fund may be subject to a lifetime allowance, Ms Schembri notes. “Such an initiative would be a good step forward to motivate employees to invest in a private pension scheme and so be less dependent on State pensions,” she says.

Deloitte Malta chairman Andrew Manduca raises the issue of sustainable healthcare.

PHOTO: MATTHEW MIRABELLI

“Burying our heads in the sand will not help and the time to start reforms is when the economy is doing well”

He acknowledges that Malta is doing well on the economic front.

It has very good growth and employment rates but while government finances have improved, Mr Manduca notes there is an area that needs attention: the sustainability of our healthcare system.

“Is it realistic to believe we can continue giving free healthcare to all irrespective of one’s financial means for all types of medical needs,” he asks.

Burying our heads in the sand will not help, Mr Manduca says, adding that the time to start reforms is when the economy is doing well.

He warns: “If State finances deteriorate this will have negative effects across all areas of our economy and, therefore, crossparty collaboration on an issue like this would, in my view, be very good for Malta.”

Family businesses, start-ups and SMEs are highlighted by Kevin Valenzia, territory senior partner, PwC Malta. Alternative modes of finance such as ‘crowdfunding’ and other peer-to-peer

(p2p) funding methods for their businesses could be viable options to the traditional credit institutions, especially for start-ups and SMEs, which may have limited access to traditional forms of finance, he notes.

Such methods of finance encourage start-ups and business growth and Mr Valenzia deems it encouraging that a number of entities and social partners have presented pre-Budget proposals in this respect.

He lays stress on support to family businesses that make up over 90 per cent of the labour market and contribute significantly to the economy. One looks forward to see the proposed Malta Family Business Act coming into force also because the succession of family businesses to the next generation remains a major concern for family business owners.

Proposals, fiscal or otherwise, aimed at assisting family businesses in areas such as succession, mediation and governance would definitely be welcome, Mr Valenzia says.

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OPINION

Something is rotten in the state of business VOLKSWAGEN CEO MARTIN WINTERKORN GIVES HIS CLOSING SPEECH DURING THE VOLKSWAGEN GROUP NIGHT AHEAD OF THE FRANKFURT MOTOR SHOW, ON SEPTEMBER 14. PHOTO: KAI PFAFFENBACH/REUTERS

Beppe Zammit-Lucia

The Volkswagen scandal of widespread deception of regulators and of its customers has sent shock waves through the business world – in Germany and elsewhere. But are we really surprised?

In an editorial the Financial Times rightly points out that many corporations follow the letter but not the spirit of regulation. However, it also suggests that VW’s deception was “exceptional.” This is not the case.

From embedded tax avoidance to regular scandals ranging from the horse meat scandal to Libor, to

mis-selling of financial products, to abuse of personal information by digital platforms, to GSK’s misbehaviour in China, to many others too numerous to mention, such behaviour is anything but exceptional. It is deeply embedded in the culture of big business. Why? Business and right leaning governments have all drunk the Kool Aid that paints regulation as unequivocally bad for business.

Regulation has become nothing more than “red tape” that makes business “uncompetitive”.

Companies spend billions lobbying against regulation. Governments the world over have also become captured by this narrative. In the UK, the Conservative government proudly declares a war on red tape. The German government tried to block any regulation that was perceived to be damaging to its automobile industry. Even when they know about it, regulators routinely seem to turn a blind eye to infringement. It seems that the use of such deception devices were known to everyone in the business as far back as

1994 and, in the US, the Environment Protection Agency in 1998 reached a settlement of $1 billion with diesel engine manufacturers on precisely the same issue.

When Olaf Lies (unfortunate name in the circumstances), Lower Saxony’s economy minister and a VW board member, says that the board only found out about the scandal just before it was announced to the press, this shows total negligence on behalf of the board.

Yet both politically and in boardrooms, the war against

regulation goes on. Eurosceptics use “excessive” regulation as their rhetorical weapon of choice. Corporations make millions in political donations to parties that promise to deregulate. In these circumstances it is hardly surprising that skirting regulation has become normal behaviour at all levels of many big businesses.

Yet regulation is a public good, raises standards and is an essential component of a functioning society. Regulation can enhance business competitiveness – rather

“Just like any management and government activity, no regulation is perfect. We are only human. We should work to improve regulation not abolish it or have our regulators complicit in skirting it”

than destroy it. Countries that have the toughest regulations spawn the most advanced companies with world-beating products.

Just like any management and government activity, no regulation is perfect. We are only human. We should work to improve regulation not abolish it or have our regulators complicit in skirting it. After all, how many of us believe that the deregulation frenzy of the 1980s and 1990s gave our societies a better banking system?

When Martin Winterkorn, VW’s outgoing chief executive, states that he has done nothing wrong, it simply shows how deep the rot has established itself in the minds of business leaders.

This rot is a failure of leadership not a failure of management. Until senior business and political leaders accept both taxation and regulation as legitimate and desirable, no amount of tightened governance can spare the public from abuse and shareholders from repeated destruction of shareholder value.

Beppe Zammit-Lucia is a management consultant based in the US.

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INTERVIEW

PROFESSOR JOSEPH FALZON, THE DEAN OF THE FACULTY OF ECONOMICS, MANAGEMENT AND ACCOUNTING

How to tame a dragon Vanessa Macdonald In Monty Python and the Holy Grail, a dragon stands guard at the mouth of a cave, preventing the crusaders from getting on with their journey. Perhaps that is the sort of dragon professor Joseph Falzon, the dean of the Faculty of Economics, Management and Accounting, had in mind when he warned about the challenges facing the economy.

Prof. Falzon is also a consultant to the chairman of the Malta Council for Social and Economic Development, John Bencini, and was recently given half an hour in which to present to the Finance Minister a summary of the main points made by the MCESD members in their pre-Budget wish list.

At 4am on the day before the presentation, he was scratching his head, surrounded by a mound of reports which between them raised 194 proposals, with a further 246 suggestions.

He managed to cover them in four main categories (see adjacent boxes) and three less pressing ones – which he called ‘dragons’, an immediate hit with newspaper headlines.

The less pressing issues are not to be downplayed, he warned. They may not be as urgent but they are just as important – and are perhaps even more complex to resolve. Traffic and parking problems were, for example, repeatedly mentioned as these are causing a lot of wasted man hours.

A holistic plan is also needed to make the healthcare system sustainable in the long term.

“Tony Zahra of the MHRA had once wryly joked that perhaps the finance minister should pass a law saying that everyone should die on their 75th birthday… But his point was clear: we have to appreciate the cost of each added year in life expectancy,” he said.

Prof. Falzon said that several of the social partners were also frustrated with the lack of progress on pensions, saying that

“We need a holistic plan for each sector and we need a coordinated vision to make sure they all work seamlessly together”

the best place to start would be with the third pillar pensions, introduced in last year’s Budget.

“There has been talk of second pillar pensions with auto-enrolment and optouts. That would basically make it a sort of third pillar.

“And the Opposition and UĦM are pushing for second pillar pensions. But there is still no agreement between the social partners on the second pillar and employers still do not feel that it is the right time to introduce it.

“We certainly need to do something and we should start with the third pillar. There have been a number of proposals made by potential providers and a lot of groundwork done. However, it was felt by the social partners that the government’s fiscal incentives were clearly not sufficient. We also need an educational public campaign,” he said.

Prof. Falzon also believes that more needs to be done to stem the flow of jobs from manufacturing and industry. “Value added per worker has improved – thanks

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INTERVIEW

to investment and automation by those companies which stayed. If we compare the value added per worker with other Mediterranean countries, manufacturing still comes out as a very good sector. And when compared with other Mediterranean manufacturing industries, then we rank fourth. But employment has dropped by as many as 10,000 jobs in the past decade or so.

“We have to take care of the engine of the economy: the export sector. It is useless to have leather seats and air-conditioning, if the car is not moving as fast as it possibly can.

“It seems manufacturing companies could eventually lose their tax advantage.

And we are not attracting any more investment in the traditional manufacturing sector, in spite of the work being done by Malta Enterprise. If a factory closes, it is increasingly difficult to transfer those workers to the newer sectors like financial services and i-gaming.”

The professor acknowledged that there were new industries cropping up, such as film and aviation servicing, but warned that these needed to be carefully nurtured with more incentives.

He also expressed concern about financial services and the gaming industry, which are both vulnerable to changes in taxation – and neither of which are represented on the MCESD. “If their tax harmonisation is imposed on us, what will that do to the financial services sector? Do we have a plan? Can we go to higher value-added? Here at the faculty, we are paving the way for our students to aim for higher value-added jobs, such as managing assets and not just back office work.

“I-gaming is another sector that we need to watch. The Finance Ministry is losing €130 million in VAT which is now being paid at the point of consumer consumption. What happens if this sector is affected?

“We need a holistic plan for each sector and we need a coordinated vision to make sure they all work seamlessly together,” he warned.

“Our GDP per capita is still half that of Germany. Isn’t that why we joined the EU? To aim higher? If there is economic development, everyone would – or at least should – benefit. Conversely, if there are problems which are throttling that growth, then everyone suffers. It is in everyone’s interest to get together and find solutions.

“We all know what the problems are and we all know what the solutions are. What we have to do is act on them,” he shrugged.

“The government cannot do them all at the same time, and some will take longer than others. But let us at least start somewhere.”

LACK OF SKILLS MCAST offers 170 full-time and 300 parttime courses in 10 different industry sectors. The university has 11,500 students.

There are 107 licensed institutions for further and higher education. ETC offers 50 courses in 15 categories. What am I missing? Anyone who wants to be trained or educated has more choices than ever!

That is the crux of it: “Those who want”.

There are indeed many options for those who want to progress. But we cannot only look at those who go on to post-secondary or tertiary education!

We need to look at the 40 per cent who end up without a Matsec certificate. Unless we train them, they can never aspire to a well-paid job. Even the ETC will find problems helping someone who leaves school without being able to read and write. Why do we want economic growth? To filter

down to workers as higher wages. And the only way to increase wages is to improve skills.

Another worrying trend is that even at university, 60 per cent of the students are females. Why is that happening?

Why are so many men not going on to post-secondary or tertiary education? And this is not a purely Maltese phenomenon.

It is happening in the US and elsewhere in Europe. Why are our men getting discouraged or distracted?

It is everybody’s fault and nobody’s fault. We need to look at parents, teachers and even the curriculum. Do we need rote-learning and exams in this day and age, rather than hands-on projects, entrepreneurial skills and oral assessments?

For heaven’s sake, even at University our students have to handwrite their exam answers! Let us move with the times!

ENERGY

BANK INTEREST RATES

Finance Minister Edward Scicluna has effectively ruled out more cuts in energy tariffs. He said that cost savings cannot be passed on to the consumer because these are needed to pay for the debts of the past…

Banks have a business model. How can you control private sector profits by insisting that they reduce the interest rate margin?

We have been told that Enemalta needs to use the money to pay for the first Delimara power station (through the Special Purpose Vehicle created for this purpose). Only Enemalta knows the figures: it has not published its accounts since 2011 and they were certainly not passed on to the MCESD. If the export sector is the engine of the economy, energy is the fuel. We have already seen that when Enemalta lowered the tariffs, it gave a positive boost to the engine.

But I would give any future reduction, not to households but to industry first – the contrary to what happened in 2014 and 2015, due to the government’s political commitment. If I had €1 million to offer, I would help the export sector first, as this will create more work and generate more revenue. Then the government can pass on that extra revenue to households if possible.

In the old days, if there was only enough meat for one person, it would be given to the bread earner, as that is who kept the rest of the family going!

Several of the social partners strongly believe that the rate charged by banks on their loans to businesses is too high. In Germany, banks become partners of industry and take the long-term view. Businesses get cheap loans from savings banks, that then become their long-term partners.

The governor of the Central Bank of Malta, Josef Bonnici, has already pointed out that the interest rate on deposits is similar to that in the EU but that the rate on loans is 1.5 to two percentage points higher than the EU average.

It is not my place to get into this debate but we clearly have a problem.

The economy boomed in the past two years because the government reduced energy costs, cut income taxes and created more spending power.

Imagine if the banks reduced the cost of capital by just one percentage point! How many more loans and investment would there be…

We need to engage them, to excite them!

Let us get some open space and let our young children be responsible for a practical project like growing rabbits, planting vegetables or selling flowers, so they can learn about running a business.

They would learn about the cost of feed and profits and business cycles and risk.

That is how to nurture entrepreneurs…

Without skills, we are condemning these students to a whole life of precarious work.

GOVERNMENT INEFFICIENCY The government had by the beginning of this year implemented over 150 simplification processes – 70 per cent of the ones identified. Haven’t they made a difference?

There is a difference between bureaucracy and inefficiency. Very often bureaucracy is related to the layers required to provide checks and balances.

But inefficiency is about service, about the culture of trying to help the consumer. And inefficiency is resulting in a bloated public sector. The Malta Employers’ Association feels that the government is poaching people from the private sector, rather than the other way round, which is what it should be!

The reform should cover Mepa and the law courts. The Malta Chamber of Commerce, Enterprise and Industry has proposed the setting up of a privately-funded commercial court which would provide timely justice. If it is viable, why not go ahead? Companies cannot wait three to four years for a case to be heard and concluded.

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CASE STUDY

Property hotspots expanding The great demand for properties in ‘hot’ areas – both for rental and purchase – has meant that properties in adjacent areas pick up the spill-over, Benjamin Tabone Grech, the managing director of Engel and Völkers Sara Grech, believes.

“The zones where a premium is paid have expanded. Sliema and St Julian’s were always in demand but that is now spreading to San Ġwann and even towards Naxxar.

“The south is still developing but not as much as the east harbour side of the island. And of course absolute prices have developed too and it is amazing to see the difference in prices over the past 10 years,” he said.

“Although some areas have always been sought after and attract a premium, there have been significant changes over the past decades, and the development of lifestyle ‘destinations’ like Portomaso and Tigné Point have changed the map indelibly.”

“Engel and Völkers Sara Grech will soon be moving to new headquarters in Mrieħel, which it describes as its ‘market centre’” The heat map of the properties currently on the market – approximately 15 per cent of the total – shows the areas where property prices are commanding a premium, although there are exceptional one-off properties or developments in some areas like Valletta and San Lawrenz, which have driven up the weighted average for that particular area.

A weighted average is not a guide to property valuations, although understanding which areas are on the up and which are declining is key to advising both buyers and sellers, he said.

Some types of property are also becoming far more popular than they were. There are now penthouses available with a footprint and price comparable to that of a villa – with similarly extraordinary views and even pools – for example, and as people’s lifestyles change, they prefer the lower maintenance that comes with a large terrace rather than a garden.

“Condominium living has a great appeal, especially for people who do not have a young family, or who travel a lot. They still want space and to be central. There is also a security issue. It is very convenient,” he said.

The complexity of the property market and understanding trends is one of the main reasons that Engel and Völkers Sara Grech has opted to have agents allocated to specific areas. This ensures in-depth knowledge of the property available in that area.

“We regard our agents as licensed partners for acquisitions – not closing – in a specified zone.

They rely on each other and it encourages a lot more teamwork.

“Take Portomaso: we have one agent for that complex, which has a very high sales potential. He has a tremendous knowledge of a large

proportion of the hundreds of properties there and has a great relationship with many of the sellers.

“And we insist that our agents have personally seen all the properties in their portfolio – which means they are in a much-better position to match the right property to the buyer.

“It also gives the seller a better service to have an agent who knows the property and brings clients that are potentially a good match. And of course, they are up to date on whether a property is still available or not and if there have been any changes to the price, for example.”

The approach to the organisational set-up also extends to its physical presence in the market.

The company will soon be moving to new headquarters in Mrieħel, which it describes as its ‘market centre’.

It also has ‘property lounges’ – not branches – in Sliema, Fgura,

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CASE STUDY

St Paul’s Bay and more recently Attard and Portomaso.

“A branch would have a manager, secretary and team of agents.

Each agent would have his own fixed desk. With our set-up, no agent has a desk and they can work from any of our offices – it is much more flexible.”

Marketing property has changed considerably. Traditional advertising has been supplemented by social media and online searches but there is still a role for property lounges as they maintain a presence in the markets where the company is most active, he explained.

“The ‘shop window’ means that the seller has another opportunity to market his properties and the buyer has ease of access to the company,” he pointed out.

“But online is where buyers build up their knowledge of what is available on the market. And of course, Facebook is unbelievable as a medium for leads.”

The website is a fundamental tool, nowadays, and it is one of the major benefits of the 2013 franchise agreement with Engel and Völkers. The site has a very different approach and layout to American or local sites and – more importantly – means that Malta is suggested to international buyers anywhere in the world.

Foreigners now make up almost half of the company’s buyers – and some 90 per cent of those seeking rentals.

“We get direct referrals from our partners overseas and I also visit them to make them aware of what is available here, not just in terms of property but also as an investment destination,” he said.

Mr Grech is the third generation of real estate agents: his grandfather founded the business in 1965.

His mother Sara grew the company significantly and she was thrilled to see her son bring his dynamism into new sectors like yachting, aimed at its high net worth clients.

The company first focused on yacht brokerage in the south of France, but over the next two years it aims to become the exclusive dealer for particular yachts, and to

San Lawrenz 4,960 Żebbuġ

Marsalforn

Għarb

> 2,000

Xagħra Rabat Sannat

1,500 - 2,000

Nadur Xewkija Mġarr

1,000-1,499

Qala

< 1000

Sliema 9,150

Mellieħa Għajn Tuffieħa

Ta’ Xbiex 10,690

St Paul’s Bay

Valletta 11,160

Mġarr

Naxxar St Julian’s Sliema Mosta Gżira Valletta Balzan Msida Birkirkara Floriana Mdina Cospicua Ħamrun Rabat Marsa Żabbar Qormi Żebbuġ Paola Tarxien Marsascala Dingli Żejtun Luqa Siġġiewi Mqabba Qrendi Żurrieq Birżebbuġa

Marsaxlokk

DESIGNED BY ALLIED NEWSPAPERS STUDIO

develop its own small charter fleet of around four or five yachts.

What lies ahead? The company already employs around 80 and is aiming for about 150 agents by the middle of next year. As with all dynamic industries finding the right people and keeping them is what

sets successful companies apart.

The real estate sector is notorious for its high attrition rate of around 30-35 per cent but Engel and Völkers Sara Grech has managed to bring that down to around 25 per cent, he said. The company has also beefed up its workforce with

foreign staff to offer a multicultural service to match its clientele profile, especially on the rental side.

“We invest so much in our people. If they leave after a few months, then it means that we have chosen the wrong people. We have four people in our human resources

team and we have a much narrower profiles of the people who can join us. Ideally we would want graduates,” he said.

“After all they are entrusted with helping people to make one of the most expensive acquisitions they will make in their lives.”

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

Editorial Vanessa Macdonald, Assistant editor, Times of Malta.

EDITORIAL

Surveys of a slippery slope In the space of two weeks, Malta was handed an invaluable chance to see how well its economy is doing thanks to two important reports: the 36th World Economic Forum ranking of global competitiveness, which came out last week, and the EY Attractiveness Survey which came out yesterday.

To derive maximum impact from these reports, they need to be analysed both as a benchmark against our competitors as well as a sign of our own performance.

Indeed, even if a number of indicators improve, we will still drop down the rankings if our competitors improve more than we have.

This is particularly relevant when you look at the trend over time. Take the WEF report for 2015, which captures 114 indicators grouped into 12 pillars, themselves grouped into basic requirements, efficiency enhancers and innovation and sophistication factors.

In 2004, Malta ranked 32nd with a score of 4.54. We have since fallen to 48th place – and our score has fallen to just 4.4.

Our score is always to an extent dragged down by our market size, which puts us in 123rd position. And some rankings – like female participation – seem to be lagging real developments as this is one area where we have seen considerable improvement.

But there is no excuse for some others. It takes 11 procedures and 34.5 days to start a business, ranking 123rd and 121st respectively. Compare this with the top ranked country for the past four years, Switzerland, where it takes six procedures and 10 days.

There are common elements in many countries, and we can draw cold comfort from the fact that in Switzerland, as in Malta, the most problematic factor for doing business is inefficient government bureaucracy, albeit with a lower percentage of responses. Over the past five years,

Malta’s score on this point has improved: it was around 21 and has since dropped to 18.5. But that is still a long way from Switzerland’s 15.8.

Indeed, there are a number of our worst scores that fall under government control – like road infrastructure, electricity supply and tax rates. Others can be nudged by the government – such as the female participation rate and airline connectivity.

These are not new issues and while some have been tackled with impressive improvements, others have not.

The private sector has also got to do some soul-searching. Corporate boards’ efficacy ranked a poor 82nd, and Malta’s worst score is in innovation, where we score just 3.9, compared to Switzerland’s score of 5.8.

The picture painted by the EY Malta Attractiveness Survey released yesterday was only slightly more optimistic. Of the foreign direct investors surveyed, 84 per cent said Malta was attractive for FDI, up five points over 2014. But that is still seven percentage points down from 2011.

And the future does not look bad: 55 per cent of them have expansion plans… But this was 72 per cent in 2009.

The survey highlighted the red flags – transport and logistics infrastructure, the domestic market and the R&D and innovation environment – and more alarmingly there has been no progress since 2014.

And looking at what we need to remain competitive, 64 per cent and 52 per cent of respondents respectively cited education and skills, and incentives for FDI investors, while investing in major infrastructure and supporting high-tech industries and innovation were also ranked highly.

The reports simultaneously acknowledge where we are doing well and sound alarms about festering problems. What we choose to focus on will determine the future slope of those graphs.

Publishers Allied Newspapers Ltd. Content House Group Ltd.

Allied

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Advertising Enquiries Tel: 21 320713 Email: info@contenthouse.com.mt Advertising Sales Petra Urso Publications Sales Manager Mark Barbara Advertising Sales Executive Lindsey Ciantar Marvic Cutajar Advertising Sales Coordinators Printer Progress Press Ltd.

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BUSINESS OPINION

Budget 2016: what can we expect?

Philip von Brockdorff The Pre-Budget Document 2016 sets out government’s policy priorities and gives a fairly good idea of what we can expect in the 2016 Budget.

In the first instance, there’s unlikely to be an enormous giveaway with fiscal prudence being the order of the day. National debt and public spending need to be kept in check. The focus will therefore be on ensuring tax is paid and tax revenues maximised.

True, the economy is growing, boosted no doubt by the fall in energy costs. The economy is expected to grow further in 2016.

We’ve also seen further growth in jobs but public sector employment has continued to rise offsetting, somewhat, efforts to reduce both the national debt and public spending.

The growth in jobs, be they public or private, has filtered through to the revenue in the form of taxes and an increased VAT take. However, positive economic indicators such as low unemployment are dependent to a significant extent on public sector

expenditure, besides job growth in private sectors such as e-gaming and the financial sector.

Both these sectors remain growth areas in our economy but it’s time for the economy to renew itself. New investment opportunities are needed and the Pre-Budget Document refers to areas that could provide both investment and employment opportunities.

Our economic potential remains somewhat constrained by bureaucracy, administrative costs and not so cheap access to finance.

The link between labour demand and supply also needs to be revisited and supported by an institutional set up that conducts ongoing and in-depth analysis of labour market developments. This would facilitate both policy development and analysis in a labour market that is rapidly changing and where educational institutions need to play a more dynamic role.

Our manufacturing sector has lost ground in recent years but it remains and should remain a key economic sector. And the tourism industry’s contribution to our economy, despite all the euphoria about numbers and records, needs to be evaluated in the context of sustainable development as well as the objective to push towards high-end tourists. Instead, we now have a massive influx of tourists increasing the pressure on our infrastructure and transport.

As for transport, it would be unthinkable to expect a cut in fuel duty. Almost certainly, the opposite.

To give him his due, the Minister of Finance is caught between a rock

“Social inclusion… is laudable but tax evasion and avoidance remains a huge challenge for our tax authorities”

and a hard place when it comes to fuel duty. A further increase in fuel duty is bound to draw the ire of business but the use of commercial and non-commercial vehicles will continue to rise in 2016. Transport in general is an important contributor to our national economy but the negative external effects can no longer be ignored. These effects can impact negatively on other sectors in the economy as well as our growth potential.

Our public transport cannot operate without subsidies but the rationale for providing these subsidies can only be justified if it helps to reduce the use of cars on roads.

The modal shift objective cannot be left out of the equation. Otherwise, subsidies would represent no return for the honest taxpayer.

We’ve all heard about fiscal morality. It’s about time we did something about it. Social inclusion, which is one of the aims of the 2016 Budget, is laudable but tax evasion and avoidance remains a huge challenge for our tax authorities. This too explains the widening inequality prevalent in our country. The 2016 Budget is expected to set the direction towards reducing inequalities but whether budgetary measures will effectively reach this objective is another matter. Research shows that European Union enlargement has contributed to increasing inequality, and though it is not the only explanation, reducing inequality needs to be one of our country’s policy priorities.

Philip von Brockdorff is the head of the Department of Economics at the University of Malta.

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APPOINTMENTS

CFO for PTL GO appoints Maltese director Group Brigitte Zammit has been appointed a non-executive director at GO, replacing Yasser Zeineldin.

Dr Zammit is general counsel and head of legal and regulatory affairs for Emirates International Telecommunications (EIT) with over 14 years of experience as a legal professional.

Prior to joining EIT in 2008, she worked in private practice with law firms in London and Malta, advising private and public international and local clients on M&A, telecoms, media, online gambling, data protection and related corporate law matters.

She is academically involved as a lecturer and examiner with the University of London and has also in the past been similarly involved with the Universities of Beijing and Malta.

NOEL MCCARTHY

New CO for APS Bank APS Bank has appointed Noel McCarthy as its chief officer. Mr McCarthy joined the bank in 2000 and is currently the head of the Finance and Corporate Strategy Division.

This appointment came as a result of a review of the bankâ&#x20AC;&#x2122;s organisational structure, which was aimed at realigning it with its strategic intent. As part of this exercise, the board of directors approved the introduction of the post of chief officer, reporting directly to the chief executive officer.

The revised structure will also see the repositioning of resources across divisions.

The bank has meanwhile initiated the recruitment process for a number of executive positions, for which the respective calls for applications have or are due to be issued.

Mark Hili has taken over from Marina Carabott as the chief financial officer of PTL Group, part of Hili Ventures.

Mr Hili joins the company from major Turkish shipping group Palmali International, whose Malta operation he helped to establish in 2005.

He has previously worked at Valletta Offshore Management Nominee Ltd and at San Anton School.

MARK HILI

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STOCK MARKET REVIEW

International equity markets suffer worst quarter since 2011

Edward Rizzo During the third quarter of the year, which came to an end last week, the main global equity markets went through their worst quarterly performance since 2011.

The Chinese Shanghai Composite index registered the steepest drop with a decline of 28.6 per cent. Other international indices also posted double-digit losses with Japan’s Nikkei 225 shedding 14.1 per cent, Germany’s DAX 30 down 11.7 per cent and Spain’s IBEX 35 decreasing by 11.2 per cent. All other global equity markets posted sizeable declines with the Dow Jones Industrial Average and the S&P 500 in the US down 7.6 per cent and seven per cent respectively. The UK’s FTSE 100 and France’s CAC40 also dropped by seven per cent during the summer months.

The losses suffered during the past three months sent most indices in negative territory on a calendar year to date basis. In fact, all indices are now in the red with the exception of France’s CAC40 which is still up 4.3 per cent and – surprisingly – the Italian FTSE MIB, which despite the 5.2 per cent loss in Q3, is still showing a 12 per cent gain since the start of the year.

During July, the performance of global equity markets was a positive one across the board with the exception of the Shanghai Composite which lost 14.3 per cent. The positive trend in the US, Europe and the UK was completely reversed in

“Trading activity across the equity market was particularly strong during July and August – the highest volumes since 2004 and 2006 respectively” August. One of the major reasons for the heightened volatility and the August sell-off was the most recent news from China.

Economic data again clearly indicated that the second largest economy in the world was experiencing growth fatigue after years of buoyant economic performance with double-digit growth rates in gross domestic product (GDP). The surprising manoeuvres by the People’s

Bank of China in August to ease investors’ nervousness did not help.

On the contrary, markets across the world declined rapidly after the Central Bank devalued the Chinese yuan on August 11, interpreting the move as a confirmation of the country’s renewed economic fragility.

The sell-off intensified on August 24 when the Chinese Shanghai Composite index dropped by 8.5 per cent – the steepest daily decline since

2007. This sent other global equity markets into a tailspin. European indices dropped by around five per cent on the day and the Dow Jones Industrial Average in the US declined by 1,000 points in the first few minutes after the market opened.

The US equity market partly recovered by the close of that trading session but still ended the day around 3.6 per cent lower. The market movements on August 24 were widely labelled ‘The Great Fall of China’ or ‘China’s Black Monday’ – a reference to the crash of October 1987.

Another major factor which impacted investor sentiment during the summer, causing uneasiness and volatility across global equity markets, was the uncertainty about whether the US Federal Reserve will raise its benchmark interest rate for the first time since June 2006.

Following the start of the international financial crisis in late 2007, the Federal Reserve reduced interest rates from 5.25 per cent to virtually zero in a period of only 15 months and then conducted three Quantitative Easing (QE) programmes – unconventional monetary policy measures aimed at increasing the money supply in order to boost consumer spending, reduce borrowing costs and address deflationary pressures.

After the end of the QE programmes, positive economic growth and employment figures over recent months, many economists widely expected the first rate hike to take place during last month’s monetary policy meeting. However, rates were left unchanged again due to a weak inflation outlook, partly reflecting the declines in energy prices as well as the global economic and financial events which may restrain economic activity.

Notwithstanding that the Federal Reserve expects inflation to gradually pick up towards the two per cent level over the medium term, several economists still disagree whether the first hike in interest rates will take place in the fourth

quarter of the year or whether this will be postponed until 2016.

European equity markets moved in tandem with other global equity markets for most of the summer, reflecting the developments across China and the impact on other emerging economies as well as the anticipated decision by the Federal Reserve.

However, the Volkswagen scandal in mid-September led to a further downturn in the German DAX30 index which partially also led to a downturn across the other European markets. Germany is Europe’s undisputed export powerhouse and the surprising news tarnished other automakers and suppliers across this important industry. The DAX had been outperforming all major indices for the previous three weeks but then suffered major losses in the aftermath of the VW developments.

The volatility across the equity markets also spilled over into the bond and currency markets. In the midst of the mid-summer sell-off across equity markets and ahead of the decision by the Federal Reserve, bond yield movements across the eurozone were rather erratic from one month to the next. Yields still ended the quarter substantially lower than at the start of the summer, leading to a mild recovery following the significant decline during most of Q2.

Across the currency market, the euro v dollar exchange rate was largely flat over the three-month period at $1.11 but also suffered some wild swings reaching a low of $1.081 on July 20 (a strengthening dollar) and a peak of $1.171 (a weakening dollar and a strengthening euro) in August, i.e. on China’s Black Monday.

Despite the volatility and sell-off across global equity markets, the Malta Stock Exchange Share Index continued to outperform and advanced by a further 5.9 per cent during the summer months following a strong interim reporting season.

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STOCK MARKET REVIEW

Seven equities registered strong double-digit gains led by Medserv plc with an increase of 31.4 per cent and RS2 Software plc with a rise of a further 27.2 per cent. Both equities reacted positively to the surge in profits during the first half of their current financial year and the bullish outlook as both companies aim for further international expansion.

This was the third consecutive positive quarter for the local equity market, culminating into a remarkable year-to-date uplift of 30.1 per cent. Equally noteworthy is the fact that during the course of the summer, which is generally a quieter period, €19.7 million worth of equities were traded. This represented a significant 55 per cent increase over the corresponding period last year and the best ever Q3 since 2006.

Trading activity across the equity market was particularly strong during July and August – the highest volumes since 2004 and 2006 respectively. On the other hand, only four equities performed negatively.

The worst performer was International Hotel Investments plc with a decline of 8.1 per cent, a significant underperformance compared to the rest of the equity market.

On the local front, as always, the final quarter of the year will be characterised by the publication of the annual financial statements of Bank of Valletta plc, the largest company

S&P 500 Index Quarterly Performances for the years 2011 - 2015 15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0%

Q1

Q2

Q3

Q4

Q1

2011

listed on the MSE. BOV’s preliminary full-year results are generally issued by the end of October. Moreover, this year, other interesting developments are likely to materialise with two important extraordinary general meetings by Medserv plc and GO plc also this month. Additionally, GO plc should also be obtaining regulatory approval to spin off its property division into a separately listed company on the MSE. The final quarter of the year should also be characterised by higher activity on the primary bond

Q2

Q3

2012

Q4

Q1

Q2

Q3

Q4

Q1

2013

market. Following this week’s €37 million bond issue by Hili Properties plc and the two new Malta Government Stock offerings, BOV is also likely to tap the bond market by the end of the year following the recent announcement that they are seeking regulatory approval for a €150 million debt issuance programme.

On the international scene, the outlook for Q4 is dependent on economic data across the major economies with special attention to the slowdown across the Chinese economy. The erratic data emerg-

Q2

Q3

2014

Q4

Q1

Q2

Q3

2015

ing from the US in recent weeks is leaving many economists and analysts unsure whether the Federal Reserve will hike interest rates by the end of the year or, like the Bank of England, postpone until 2016. This is a major theme impacting equity, bond as well as currency markets.

Following one of the longest bull markets in recent years across the international equity markets, investors must brace themselves for periods of continued volatility similar to that evidenced in recent weeks.

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. © 2015 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved.

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BUSINESS UPDATES

HSBC economist to address trade corridors at business meeting Global trade corridors and their long-term implications and opportunities will be tackled by Douglas Lippoldt, a senior trade economist at HSBC, during an exclusive HSBC commercial banking business meeting today. Lippoldt will take the audience through the findings from his recently published research Trade Chart Book – The Power of Corridors, as seen from a long-term and sectorial perspective.

HSBC Malta’s head of commercial banking, Michel Cordina, said: “Mr Lippoldt is bringing in-depth insight into the world’s economic state of affairs. HSBC’s global network allows it to capture emerging opportunities

TEMI ZAMMIT HALL

Business functions in a remarkable landmark The Mediterranean Conference Centre, built in the 16th century, has long been one of Valletta’s most remarkable landmarks. The sheer size and scale of the building, coupled with its conversion into a modern conference centre in 1979, makes the MCC an impressive architectural feat.

It is also one of the finest venues in the Mediterranean for a range of events including product launches, seminars, exhibitions, conventions, banquets, theatrical performances and staff functions, offering a full complement of audiovisual

equipment including interpretation facilities. All rooms have independent sound, light and climate control, as well as free Wi-Fi. For receptions and banqueting, MCC works with the largest catering partner on the island to guarantee a quality dining experience.

Whether you’re seeking to launch a new product, host a multinational convention or this year’s Christmas staff function, the Mediterranean Conference Centre offers a truly unique combination of flexibility, atmosphere and impeccable service.

VASSALLI HALL

from around the world and to bring unrivalled insight to its customers so as to allow more informed decisions.”

Lippoldt joined HSBC in 2014 coming from the OECD in Paris, where he had worked for 22 years in various roles as a senior economist. Prior to that, he served seven years as an international economist with the US Department of Labor in Washington, DC. His central focus has been on international trade issues and he has published extensively on trade topics as well as related aspects of economic development, labour market adjustment, innovation and intellectual property.

DOUGLAS LIPPOLDT, SENIOR TRADE ECONOMIST AT HSBC GLOBAL RESEARCH ECONOMICS TEAM

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BUSINESS UPDATES

Inauguration of new Creek Developments plc offices, clubhouse and facilities

OurWedding – a one-of-a-kind wedding portal OurWedding.com.mt is a freshly launched online portal for local and foreign couples who are planning to tie the knot in Malta. OurWedding is the first of its kind on the island – it has a thriving community of users, real weddings and honeymoon stories and an extensive directory of vendors and suppliers covering everything from bridal wear to home furnishings. Members can also build their own personalised wedding website and host them on the site itself.

OurWedding is backed by a team of seasoned writers, bloggers and wedding experts, and promises to provide frequently updated, informative content for the contemporary couple looking for help, inspiration, ideas and entertainment. www.ourwedding.com.mt for advertising enquiries contact Content House Group on 2132 0713; e-mail: info@contenthouse.com.mt

Creek Developments plc held a reception for shareholders last Friday to celebrate the inauguration of the new offices, clubhouse and facilities of the Msida and Ta’ Xbiex Marinas and thank the stakeholders for their support during the past five years. The Minister for Transport and Infrastructure, Joe Mizzi, presided over the inauguration.

Since taking over the operations of the Marinas from Transport Malta in January 2011, Creek Developments plc has carried out a complete refurbishment of the marinas, replacing the entire marina infrastructure and installing networked utility pedestals, access control, CCTV coverage and marina management software. Investment has also been made in human resources, with 24-hour marina assistance and a staff complement growing from three to 13 over the past five years. The completion of the new offices marks the latest stage of an

Fresh comedy at the Blue Box eatre If you’re looking for an evening out that is guaranteed to leave you with a huge smile on your face, get yourself down to the Blue Box Theatre in Msida to watch the brand new comedy, The Trophy Room.

This hilarious play stars John Montanaro, Julia Calvert, Chiara Hyzler, Vanessa Attard, Barry Calvert and Steve Casaletto, who get themselves tangled up in a web of deceit, blackmail and hot tubs.

The Trophy Room is being staged at the Blue Box Theatre in Msida from tomorrow to October 18 at 8pm.

Tickets, priced at €10 for opening night and €18 for all other shows, are on sale now.

Visit www.mostlyharmless.com.mt for more information.

Shireburn Software launch cloud-based payroll Local software house Shireburn Software has this week launched Shireburn Indigo Payroll, a cloud-based payroll and leave management solution, designed to further automate and simplify the payroll process. The solution is entirely developed and supported by Shireburn and hosted on the Microsoft Cloud.

Shireburn Indigo is Shireburn’s latest wave of business solutions, with Shireburn Indigo Payroll being the first addition to their current portfolio, offering

investment of nearly €9 million to date, ensuring that owners of both visiting and resident yachts berthed in the Msida and Ta’ Xbiex Marinas enjoy standard-setting facilities in addition to the safe, central and sheltered location, while this important sector of the Maltese economy is presented in the best possible light.

companies the opportunity to move to the cloud and operate with more flexibility.

Shireburn Indigo Payroll allows greater levels of productivity, accuracy, security and convenience, giving its users the flexibility to work from virtually anywhere and at any time.

For more information go to www.shireburn.com/indigo phone Shireburn on 2131 9977 or send an e-mail to sales@shireburn.com.