Exante’s Patrick J. O’Brien examines the role of the Malta Stock Exchange and how ‘Prospects’ may also benefit the gaming sector.
When the MSE was established in 1991 it had three main objectives. Its first aim was to provide the local business community with new financing possibility that could eventually assist them in widening their capital base and secondly, to provide a means by which to broaden the base of Maltese assets. As a result of the first two, to help nurture the Island’s ambition to become a reputable international financial centre.
“Today, the exchange continues to focus on the domestic market, but will also seek to attract international business from China, Turkey, Italy, Spain, Eastern Europe and the Middle East to take advantage of Malta’s cost effective listing solutions”, stated Cliff Pace, MSE Business Development Manager
Small and medium-sized enterprises (SMEs) represent a substantial percentage of the total businesses in Malta. In the EU the percentage is as high as 99% of all the businesses, so it is crucial that for all countries introduce measures to support growth and innovation. However, one of the most important issues facing SMEs globally is their difficulty to access finance.
Last year, the MSE introduced ‘Prospects’ offering a cost-effective opportunity for entities looking to raise from €1 million up to €5 million per issue. ‘Prospects’ opens up new capital market opportunities, crate economies of scale and will help businesses become more competitive and sustainable. ‘Prospects’ creates an opportunity for SMEs to access capital markets in a relatively easy and efficient way and to benefit from the advantages which so far, have been available only too much larger companies.
It’s hard to believe that when the MSE started trading, there were just 32 government stocks admitted to listing, with a nominal value of €290.24 million. Turnover during the first year of operations of the Exchange reached €27.25 million, and the number of investors registered back then was just 8,313. Compare that to the end of December 2015 where trading was just below the €1 billion mark, the market capitalization value was €11.6 billion, and the number of investors now stands at more than 74,0000. These figures clearly show that the Exchange has transformed and developed significantly.
For Maltese SME’s including igaming industries, ‘Prospects’ can be the perfect opportunity to raise capital either by issuing new equity or bonds. ‘Prospects’ aims at facilitating access to fund raising, potentially offering a more cost-effective and easier-to-access alternative to other traditional means, such as bank loans. Moreover, admission to ‘Prospects’ opens up the opportunity of eventual listing on the main market.
‘Prospects’ is not only available to Maltese companies, but is also available for foreign companies seeking alternative finance. To avail a company must be an SME as defined by the European Union whilst the Initial Public Offering shall not exceed €5 million. The issue is a Company Admission Document, together with the other supporting documentation including a business plan must be submitted. The applicant for ‘Prospects’ must have a minimum issued share capital of €46,587.
Have you attended SiGMA last year? Relive the highlights from our last show and stay tuned for this year’s SiGMA. Watch out for what we’re branding as the ‘iGaming Village’ this year.