Medium sized companies showing interest in second-tier listings

by David Kelleher

The majority of companies seeking a second-tier listing on the Malta Stock Exchange are medium-sized companies, stockbroker Paul V. Azzopardi said yesterday.

Contacted by The Malta Business Weekly, Mr Azzopardi said companies that had shown interest in being listed on the MSE were medium-sized companies with no track record.

"These companies have little or no track record and therefore are unable to obtain a full listing on the Malta Stock Exchange," Mr Azzopardi said.

He said the companies were relatively new but not very small. "Small, start-up companies are not being encouraged due to the high risk involved," he said. Asked when the first companies were expected to be listed, Mr Azzopardi said he expected the first listing towards the end of the year or by the first quarter of 2001.

Second-tier listings are aimed at those companies who are relatively small and unable to meet the requirements for a full listing on the stock exchange. The regulations are also less demanding on companies, thus offering a greater incentive.

Such a list also provides companies with a tax effective means of raising capital instead of going through the usual banking channels.

Second-tier listings, also known as Alternative Company Listings, are attractive because they offer a faster process for interested companies due to the sponsor's role and no track record is required. Neither does the company need a high sum of capital. In turn, the flotation percentage and limit is also lower and contrary to what many investors believe, investment is not limited to shares only. Even bonds can be offered.

As a further incentive there are no taxes on capital gains and no initial listing fees on equities.