ANNUAL DINNER

Chairmans Speech

CHAIRMANSADDRESS

HonPrimeMinister,DistinguishedGuests,

Itisindeedapleasuretowelcomeyoualltonight.ThisAnnualEventisintendedprimarilyforus
toconveyourthankstoallthestakeholdersoftheCapitalMarketfortheirsupportthroughout
the past year. It is also an opportunity for us to highlight some of the more important
developmentsthathavetakenplacethroughoutthepastyear.Ipromisetodothisinnotmore
than five minutes, as I have yet to meet a culinary expert who lists a predinner speech as a
favouriteaperitifwithdiscerningguests.

2012 has been a trying year for the Exchange particularly on the primary market. As was
anticipated,therecordactivitywewitnessedforthreesuccessiveyears,2008,2009and2010,
couldnotbesustained.2011and2012infactusheredsharpdropsinthenumberofprimary
issues. In the past two years 6 nonGovernment primary issues representing EUR 138 million
worth of capital have come to the market. The Exchange has continued to be an important
platform for the issue of Government Stock. Over the past two years 1.48 billion worth of
Government Stock has been issued and Government Instruments have been invariably
oversubscribed,indicatingpositiveinvestorsentiment.TheStockExchangecontinuestofulfilla
positive economic role by serving as a catalyst to direct hitherto dormant capital to more
productive uses in the economy though admittedly we would like to see a more buoyant
primarymarket.

Market feedback has repeatedly indicated that besides external economic woes, regulatory
restraintshavenothelpedtostimulateprimaryissues.Itisthushearteningthatfollowingwide
consultation,theListingAuthority hasagreedtoamendtheListingRulessothatsinkingfund
requirements will be more issuer friendly. Following a long gestation period, Market Making
Regulationwillalsoseethelightofdayearlynextyear.

TheExchangehasutilisedthischallengingyeartoconsolidateitsoperationalinfrastructure.The
Clearstream link which enables Maltese listed securities to be cleared and settled on an
internationalsettlementplatformhasincreasedourcrossbordertrading.Ithasalsofacilitated
theprovisionofCSDservicestointernationalcompanieswhicharenotlistedonourExchange.
TheseancillaryincomestreamshavebeenimportantfortheExchangeintimesofreducedcore
activity.

LastJunetradingmigratedtotheXetratradingplatformoperatedbyDeutscheBoerseAG.The
Exchange thus joined another 18 partner exchanges on the trading platform with the largest
globalfootprint.Apartfromincreasedfunctionality,XetrahasprovidedtheExchangeandlisted
companies with instantaneous increased exposure. Preparations for participation in Target2

Securities,

the

panEuropean

Settlement platform, is ongoing.

These infrastructural initiatives will
ensure that notwithstanding size
limitations

the

Malta

Stock

Exchange will position itself as an

attractive proposition not only for
domestic issuers but also for small
and midcap companies looking for
a cost effective platform which enables them to tap into the European Capital Market. This
investment is yielding dividends and new business is being channeled towards the Exchange
from hitherto untapped sources. The Listing Authority will corroborate me in confirming that
weareseeingthefirstgreenshootsofinternationalinterestintheCapitalMarket.

Credit for these interesting developments is shared amongst many to whom we owe our
gratitude, not least of which is the Government, our shareholder for its sound economic
management,theregulatorswhosuperviseouroperationandstockbrokerswhoweregardas
ourpartnersingrowingtheexchangebusiness.

InconclusionmayIaddthatasthesectorcontinuestodevelopitwouldbeindeedsalutaryto
see increased vigilance in selling practices, sustained initiatives to improve financial literacy
amongst the investing public, the development of an independent and analytical financial
press; a renewed commitment to political consensus in the field of financial services and a
concertedefforttoentrenchethicsineconomicandcorporatebehavior.

ThankyouHonorablePrimeMinisterforyourpatronagethiseveningandmoreimportantlyfor
youreffectiveleadershipandsoundeconomicgovernance,somarkedlyevidentintryingtimes,
thank you regulators for your constant support and supervision, brokers and chairpersons of
listedcompanies,thankyouforyourcustomandmayIwishyouallapleasantevening.