19 - 25 April 2001

‘Bullish’ sentiment at Malta Stock Exchange will return

by a staff reporter

The downturn in the local stock market will pick up again once international economies turn around, in particular the US economy, according to Charles J. Farrugia, a stockbroker at HSBC Stockbrokers Malta Ltd.
Interviewed by The Malta Business Weekly, along with Tim Fitzpatrick, finance director, and Ivan Grech, manager of the ShareShop, Mr Farrugia said that all markets pass through a bullish or bearish phase.
Asked whether HSBC anticipates a recovery in the Malta Stock Exchange particularly in view of the government’s privatisation programme, as well as the possible listing of several large private companies, he replied:
“Up to last year Maltese investors were only accustomed to a positive domestic market. For various reasons the trend has now changed and we are now going through a negative period. Practically all international stock markets are going through such a bearish phase. Once international economies turn round, particularly the US economy, we feel this should benefit stock markets in general.
“The bullish phase will eventually return. The feel good factor should reflect on the Maltese Stock Market as well. We believe that the government privatisation programme as well as the potential listing of large corporate private companies should help the Maltese Stock Market to develop further and attract new investors to the market.”
HSBC Malta recently received a licence to operate as a stockbroker and thus offer stockbroker services to clients.
What opportunities does HSBC foresee in setting up HSBC Stockbrokers Malta Limited?
The HSBC Group in Malta wants to offer its customers the widest range of financial services, according to Mr Fitzpatrick. “The creation of HSBC Stockbrokers Malta Ltd enables us to broaden our range of services. With a stockbroker’s licence we are now also in a position to offer sponsoring broking facilities to our corporate customers who are looking to list their company on the Malta Stock Exchange,” he said.
And does this mean offering clients dealing on the Stock Exchanges a much better service?
Charles J. Farrugia replied: “Through the HSBC Stockbrokers Malta Ltd, we will now service directly our customers’ orders to buy or sell stocks and bonds on the Malta Stock Exchange. We will have a better understanding of the market’s movement and sentiment and feel confident that this will help us improve our overall service to customers.”
The HSBC ShareShop in Valletta is an example of one of the bank’s efforts to reach out directly to clients offering a one-stop shop in Malta and Gozo. This will not limit clients to buying or selling shares from branches. On the contrary, according to Ivan Grech, HSBC is simply expanding its network.
“The current procedure is for our customers to give their investment orders on the local stock exchange via our wide network of branches. This will not change. Customers will continue to be served by branches and can now also use our ShareShop facilities in Valletta or at our new ShareShop Unit in Victoria Gozo. These orders will then be routed to our new stockbroking company for execution on the Malta Stock Exchange,” Mr Grech said.
Clients will also be able to go to HSBC Stockbroking Malta Ltd to buy and sell shares on international stock exchanges. Mr Farrugia said that the company will not be seeking an Investment Services Licence from the MFSC.
“HSBC Bank Malta plc already has this licence. The ShareShop unit in our Republic Street branch already offers the possibility for our customers to buy international securities on the international markets. As from the current month, this service is also available from our Wealth Management Unit in Victoria Gozo and will become progressively available through other branches. We are very excited about this project as we are confident we are giving a better
service to customers.”
The concept of using the internet to increase business has not been dismissed by HSBC. Apart from servicing clients through the branch network and the ShareShop, HSBC Bank (Malta) also operates internationally.
“Internet Stockbroking is a
service which the HSBC Group has developed internationally,” Mr Fitzpatrick explained, adding that “HSBC Bank Malta plc is on the verge of completing the transition to the Group’s retail banking software system called HUB (HSBC Universal Banking). Once completed and when the Bank is confident of the right moment it will introduce Internet Stockbroking within the HSBC Bank Malta Group. In addition to internet broking, we are currently evaluating a number of other initiatives which would improve our share dealing capability to our customers here in Malta.”