Until now, we have only reviewed exchanges from the world's most prominent countries. Today, however, we are going to make an exception, as we are going to write about an exchange from Malta, a European microstate – the Malta Stock Exchange. There is a reason we make that exception, as it is Malta where the sponsor of these reviews, the EXANTE company, is registered. Furthermore, starting with October 6, EXANTE holds official membership on the MSE (there are only 15 such companies). Letter 'B' in the text stands for billions, 'M' refers to millions.
The MSE's Place in the Global Economy
The MSE is a small exchange, and is one of Europe's regional exchanges. Stocks of around 20 companies with a total market cap of €4.4B* are traded on it, as well as several dozen corporate and government bonds. The turnover of funds on the exchange is around €1B. These figures are rather modest by global standards, but for a small country like Malta the MSE is a very influential exchange. The figures listed here are comparable to Malta's annual GDP (around €8B), while the total number of investors comprises a significant part of the country's population (75,000 people out of 434,000).
Companies listed on the MSE include both companies native to the country (such as the Bank of Valletta and the Malta International Airport), and local branches of transnational corporations (for example, Mapfre Middlesea, part of Mapfre, a Spanish insurance group). Despite Maltese companies not being very well-known in the world, many of them are quite attractive in terms of investment. Maltese bonds are quite a profitable investment as well. Unlike many other countries in modern Europe, Malta boasts a great economic climate, as well as political stability and business-friendly laws.
The Malta Stock Exchange is located in the former Garrison Church building. The building was constructed in 1857 and remained a church until 1950 – since then, it played a number of other roles. One such role was that of a post office.
The MSE is a young exchange, as it only opened in 1992. Since day one, the MSE was actively backed by the government and focused on trading government securities. For the last 25 years, the Maltese stock market has attracted €19B worth of investments, with only €4B having been invested into shares and corporate bonds, with the remaining €15B having been invested into government securities (Malta's annual GDP being around €8B).
The exchange's administration has always paid great attention to the development of information technology. Currently, trading on the MSE is being automated according to the standards of the popular German XETRA trading system. The MSE as it is now is one of the world's most high-tech trading venues.
Notable Companies on the MSE
Asset prices and other information on the MSE's companies is harder to find on the Internet than that on the companies from the world's top exchanges. The MSE cannot be found on such resources as finance.yahoo.com and finance.google.com. When writing this review, we used the data at http://blackdigits.com.mt/dashboards/. More official information on the exchange's listed companies – if less complete – can be seen at https://esdocs.com/doc/474348/price-list---malta-stock-exchange.
Let us see which companies on the MSE hold the first place according to some specific criteria
The Bank of Valletta has the highest market cap (Malta's largest bank, ticker symbol BOV, market cap €893M). The second place is shared by HSBC Bank Malta (ticker symbol HSB, market cap €591M), and Malta International Airport (ticker symbol MIA, market cap €578M). The highest 52-week price increase was shown by FIMBank (ticker symbol FIM, market cap €235M, 52-week price increase 95%). The second place, far behind the leader, is held by the Simonds Farsons Cisk brewing company (ticker symbol SFC, market cap €210M, 52-week price increase 21%).
Let us now list the companies that showed the highest growth rate this year (this page shows how to calculate the company growth rate). The first place is held by the GO telecommunications company (ticker symbol GO, market cap €329M, growth rate 29%). It is followed by RS2 Software (ticker symbol RS2, market cap €249M, growth rate 19%) and the GlobalCapital insurance company (ticker symbol GCL, market cap €15M, growth rate 18%).
One interesting side of the MSE is its extremely cheap shares. The most expensive share right now costs €7.0. It belongs to the aforementioned Simonds Farsons Cisk company. It makes sense that such a “high” price makes next to no impact on the share's liquidity: around 10,000 such shares are sold each day. The most popular shares belong to the company with the highest 52-week price increase, FIMBank. They sell over 200,000 shares a day, costing €0.6 each.
What is also interesting about the MSE and how to start trading on it
Despite what has already been said, the reader may still ask: why would a trader want to access a small stock exchange? The answer is simple: what matters the most is not the exchange's size and the companies' popularity. What really matters is how promising the companies are economically, and the general economic attractiveness of their home countries. Malta, as well as Europe's other microstates, is quite promising investment-wise.
The MSE may interest a wide variety of traders. On the one hand, the exchange is quite friendly to active speculators. Not only is it well-equipped, it also plans to launch programs to encourage market makers working through algorithmic trading. On the other hand, long-term investors may be interested in Maltese bonds as well as Maltese stock shares. Compared to the rest of Europe, they provide a decent income, and the Maltese bond market has never experienced a default for its entire history (!). This fact alone is reason enough to see the MSE as a good investment.
Unfortunately, an online investor who wants to start trading on the MSE will encounter a problem: the majority of brokers overlook smaller exchanges. The MSE cannot be found on the leading international brokers' market lists. The EXANTE company has decided to fill this gap on the broker market. We are already setting up online access to the MSE for our clients, and, since EXANTE is the MSE's member company, there will be no additional brokers to go through. In just a few days, the EXANTE trading terminal will be showing the MSE's share prices, and in a month, it will provide the right to trade these shares.