Decline in stock market is order driven – MSE chairman

by Franco Aloisio,
David Kelleher

The considerable drop in the local stock market is the result of market forces, Malta Stock Exchange chairman Alfred Mallia said yesterday. However, Mr Mallia said the MSE is still taking the necessary steps to make sure that no stock or share price manipulation, leading to the overvaluation of certain shares or funds, is taking place at the stock exchange.
Mr Mallia said the MSE’s function was not to judge the performance of certain funds, but rather to regulate, administer and monitor the stock exchange.
“The present decline in the stock market is part and parcel of the way the system works. One day people decide to buy, and another they sell. I do not think it is a matter of investor confidence or the lack of it,” Mr Mallia said.
The MSE chairman said in 1999 the stock exchange was peaking, while 2000 was a year during which funds, shares and stocks were consolidating themselves. This year will see new developments and a larger activity as a result of the privatisation process.
Mr Mallia confirmed that several large local companies are considering placing part of their assets and equities into the MSE. However, he said it was still too early to divulge their names or other details.
The companies which are most
likely to have their shares quoted on the stock exchange, he added, are
family-run businesses, and these businesses see the MSE as a viable way of consolidating their business activity so that successive generations will be able to continue running the business.
Mr Mallia said the privatisation process together with the Lm30m to Lm50m in government stocks should increase the business generated at the MSE this year.
On the future developments regarding the MSE, Mr Mallia said discussions are underway with the London Stock Exchange for cross-listing initiatives. A conference for European stock exchanges will be organised in Malta in October.
Meanwhile, Mr Mallia announced that the MSE will be changing offices and by July will start operating from new premises at the Garrison Church in Castille Place, Valletta.
Meanwhile, the market took a slight boost yesterday with the MSE Index going up by 72.91 points. The major equities also saw a fair amount of trading with prices going up slightly for BOV, HSBC and Maltacom.