Malta Stock Exchange: Working towards a bright post-pandemic future

By: The WFE Focus Team Dec 2021

Name: Joseph Portelli

Title: Chairman, Malta Stock Exchange

The pandemic has brought many changes to the way we work. In your view, what changes are here to stay that will shape the workplace of the future? What is the biggest change this year has brought? Challenges & Opportunities?

The biggest change in 2021 was the introduction of our new Work from Home Policy. Although the Exchange already had a teleworking policy in place (primarily aimed at mothers with young children), the revised policy will now allow all staff to work from home on Mondays and Fridays. Besides being an improvement on the quality of life of our workforce, this policy is also in line with Malta’s strategy to reduce CO2 emissions.

Sustainability is everyone’s responsibility. Research shows that investors, now more than ever, are expressing strong sentiment towards socially responsible investment and the demand for green bonds is on the increase. The Malta Stock Exchange (MSE) expects that this sentiment will also be realised in our capital market and that demand for sustainable investment products will increase. It is with this in mind that in March this year, the Malta Stock Exchange launched its Green Market. To incentivise issuers to move towards green finance, the MSE is also offering a 50% discount on listing fees for Green Bonds.

Both initiatives entailed challenges but perhaps the biggest challenges and opportunities lie in the promotion of the Exchange’s Green Market. This market will create an opportunity for issuers to widen their investor base and get access to capital from the more environmentally conscious investors who, research shows, are shifting from traditional investments towards more ESG-conscious investing. Diversifying the investor base also means increased market activity, which will ultimately also benefit the market and generate more economic growth.

Our vision for the future of work

With respect to work processes, as mentioned, the Exchange has already successfully implemented a two-day work-from-home policy. Given that this has positively affected the morale of our staff and that efficiency and productivity levels have improved, we are also implementing a programme that will enable our staff to work outside of Malta for one month a year. We are finding that many of our staff have children or other loved ones living abroad, and affording them an opportunity to share extended periods with them is for many of our staff an invaluable benefit.

The fact of the matter is, assuming staff are responsible, have access to effective digital connectivity, and have the necessary technology, work can be conducted almost anywhere. These programmes will not only benefit employees but will also help in reducing the Exchange’s carbon footprint with respect to energy consumption, which will ultimately result in reduced operational costs and positively affect the Exchange’s income statement.

How easy or difficult has it been to do business both globally and domestically?

The Exchange’s business is mostly domestically oriented, and although the pandemic may have slowed the pace at which business grew – despite noticeable decreased activity in 2020 and a slower pace during the first half of 2021 – the Exchange is now seeing increased interest from market participants. It is very encouraging when one looks at the number of new issuers coming to market; seven during the last quarter of the year alone.

To raise awareness locally, the Exchange will be increasing its presence on both social media and through various PR campaigns. A series of webinars will be held throughout the year. These webinars – called the “executive spotlight” – will include interviews with listed company CEOs, and educational webinars relating to the Exchange’s products and services.

The Exchange’s vision for the future is to continue to concentrate on its growth strategy, which also includes plans to improve its international profile through the development of the brand.

In keeping with our strategy to introduce new market products, the MSE is also thinking of exploring the possibility of servicing the digital capital market by providing a platform where tokenised securities can be traded. This will enable the Exchange to move beyond national boundaries and will bring with it more opportunities to attract international business.

What was your most memorable moment this year as a leader?

I think my most memorable moment was the realisation that the Malta Stock Exchange will soon embark on planning to host the WFE IOMA Derivatives and Clearing Conference in April 2022. We are very excited about hosting this event and, assuming COVID-19 is brought under some control, we expect a solid turnout. So many of us have not travelled internationally since early 2020, so there is a real appetite to travel and reconnect with colleagues. In addition, Malta has one of the world’s highest COVID-19 vaccination rates at 92%, so I really think delegates will feel safe here.

What are three key industry themes you will be focused on in 2022?

Certainly, in line with Malta’s Sustainable Development Strategy, we will continue working towards engaging companies listed on the Malta Stock Exchange to adopt more sustainability measures in their operations and to encourage Maltese investors to look out for sustainability-conscious investing.

Additionally, as an advocate for sustainability, the Exchange is also in the process of obtaining certification as a Sustainable Oriented Organisation from the Life Learning Academia. This will equip the Exchange with the tools needed to continue to educate issuers and other stakeholders on the importance of putting sustainability at the core of their activities.

In today’s digital age, where markets are driven by instant access to data, the Exchange will be embarking on a project that will enable it to cater to the growing demand for digitally secure transactions. This will make it possible for the Exchange to move beyond its national barriers and allow for a more internationally diverse client base.

Education is also top of our agenda. We believe that financial literacy is the key to the growth of our market and the economy. Early next year, we are planning to launch a survey that will give us a clearer picture of the level of financial literacy in Malta. The aim of this survey is to gauge the level of knowledge among the Maltese public and, depending on the results, the Exchange will tailor a series of webinars to address their needs. Fostering financial literacy will ensure that investors are better equipped to make sound investment decisions.

Tell us one thing that will change in 2022 and one thing that won’t?

As I said earlier, the concept of working from home has now entered the mainstream and reframed how many organisations will design their Business Continuity Plans. We have learned that staff are very capable of being productive from home, assuming solid supervision and good communications. If managed properly, businesses can improve the bottom line through significant infrastructure savings from reduced office space and utility cost savings. What will not change is that increased regulation, as well as higher compliance and labour costs, will continue to put pressure on margins. Exchanges – particularly the smaller ones – will need to find additional sources of revenue outside their mainstream business.