Not much dif­fer­ence from Dick­ens’ time

Let­ter

The Malta Business Weekly - - FRONT PAGE -

The MSE is happy to pass on to the Ex­che­quer sev­eral mil­lions gar­nered from share and other in­vest­ment trad­ing com­mis­sions, but this is only one side of the story.

Many share­hold­ers com­plain that their life's sav­ings in­vested in shares (and in some other sup­pos­edly low risk in­vest­ments) through lo­cal in­ter­me­di­aries have left them vir­tu­ally empty handed. They at­tribute this ei­ther to the of­fi­cial in­fla­tion rate, but more so if the real loss of value of mon­e­tary de­nom­i­nated as­sets is fac­tored in.

Sev­eral fac­tors have mil­i­tated to­wards this sad state of af­fairs.

Un­doubt­edly one indi­rect drag on good div­i­dend pay­outs has been the ridicu­lously low in­ter­est rates in Europe. This seem­ingly jus­ti­fies un­scrupu­lous boards to like­wise de­clare mis­er­able re­turns as div­i­dends.

An­other fac­tor is the dif­fer­ent pri­or­i­ties of two 'sets' of share­hold­ers. Many lo­cally listed com­pa­nies, if it weren't for the ini­tial seed fi­nanc­ing of in­di­vid­ual small time share­hold­ers, would not have had a suc­cess­ful IPO.

Re­gret­fully, in­stead of re­ward­ing the re­tail share­hold­ers/ in­vestors, some MSE listed com­pa­nies have used them as step­ping stones to get into a big­ger league by en­tic­ing deep pocket in­vestors from the Per­sian Gulf. These penny pinch­ers are not keen on re­ceiv­ing div­i­dends which get taxed by the Maltese CIR but are bent on ag­gran­dis­e­ment, through rein­vest­ments.

Re­tail share­hold­ers/in­vestors have waded into MSE shares etc to sup­ple­ment their in­comes, and hope­fully to once in a while get a wind­fall from shares which in­crease in value. Alas this has been the ex­cep­tion rather than the norm, as more pow­er­ful el­e­ments see to it that what is dished out is the very min­i­mum, and not just at the an­nual gen­eral meet­ing re­cep­tions for the 'poor cousins' share­hold­ers/in­vestors (in con­trast to the lav­ish buf­fets laid out for spe­cial clients as at the re­cent Val­letta Sa­lut­ing Bat­tery HSBC re­cep­tion, and that held nearer Christ­mas at M'forn for clients in­debted circa a mil­lion eu­ros).

Charles Dick­ens were he to turn up again would not find that things have changed much as re­gards the haves and the have nots. C. Grech Sliema

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