For Joe Portelli, Chairman of the Malta Stock Exchange (MSE) since 2015, the last eight years have been a unique journey of development, for himself as well as for the institution he heads. 

Earlier this year, he was appointed to the Governance and Nominations Committee of the World Federation of Exchanges (WFE), one of the most influential trade bodies in the sector. 

This came after the MSE hosted the WFE's AGM in September 2022, and shortly before it organised the first annual conference on governance risk and compliance, attracting speakers and attendees from around the world. 

Mr Portelli describes the MSE's positioning on the world stage as a major moment, and a culmination of the work done during his tenure - the longest by a single Chairperson in the organisations 30-year history. 

“Malta is the European Union’s smallest economy,” he says, “but despite this, we have very sophisticated capital markets.”

“We believe we have been successful in transforming the MSE from a sleepy local exchange without much going on to a vibrant capital market. Today, we definitely punch above our weight class.”

He uses two other countries to illustrate his point.

“Look at Luxembourg and Qatar,” he says. “Two places with a really high wealth per capita. Luxembourg has about 25 local companies listed on its exchange, while Qatar has 55.”

“The MSE, however, has more than both combined – no fewer than 107.”

Some of Mr Portelli’s efforts have been focused on “bringing a bit of Wall Street to Valletta”, an initiative he feels has paid off by creating “a real prestige around being listed” and that has contributed to a 40 per cent increase in listings since 2015, bucking the global trend.

“We now have the tape ticker, the bell ringing. Before, more company CEOs had never even entered the building. Now, we invite companies to launch their listing here, with a bit of pomp and circumstance. They feel welcome, and I think there’s now a certain cachet to getting listed.”

The introduction of MSE Prospects, for companies looking to raise funds up to €8 million, has also generated considerable interest from SMEs.

“In some instances, these companies might only have a handful of employees,” explains Mr Portelli. They go from being private to having to undergo a whole governance process, though many find that this helps them maintain financial responsibility while adhering to strict compliance criteria.

For the MSE, the Chairman says, it is not about the number of approvals.

“We have turned down a number of companies in the past. It is up to us to decide whether they fit our risk appetite profile.”

He continues: “What we really want is companies we can be proud of having on our exchange.”

The employee headcount has been reduced from 59 to 51 – “so we are doing more with less” – while the company has posted record incomes and increased dividends.

“Last year, we achieved record income of €3.1 million after tax,” he says, noting that it has paid the Government over €30 million since 2015 in corporate taxes and dividends.

The dividends the MSE pays its owner – the Government – has in fact increased over the years, from doubling to €2 million over his chairmanship.

Mr Portelli is keen to dispel the idea that the MSE is “some Government entity”: “We are a public limited company (plc). There is nothing ‘Government ’about us except that it owns us. But we are run like a private institution – and a thoroughly profit-maximising one at that one.”

Not everything has been a success though. Mr Portelli freely admits that the MSE has failed to attract any foreign listings, despite this being identified as a key objective in the Capital Markets Strategy.

“We were hoping to bring in more international listings, but, unfortunately, we have not brought in a single one,” he says.

Competition is fierce, with some exchanges spending decades attracting that kind of business.

But what benefit does Malta receive from a foreign listing on the MSE?

“When a company decides to list somewhere, there’s a huge ecosystem necessary to make that happen,” Mr Portelli explains. “There are lawyers, auditors, accountants, regulators – and of course exchanges,” although, in this food chain, exchanges actually make the least income, he says.

“So a company could be spending a million euro on getting a security listed, with the knock-on effects creating a high business set up around that.

In the EU, Luxembourg and Ireland have 40,000 and 35,000 such “technical listing”, he notes, saying that even if the stock exchange only makes €2,000 from each one, it still constitutes a good income.

Such technical listings usually consist of global depositary receipts (GDRs), green securities, or real estate investment funds (REIFs).

In fact, other developments during his tenure include the creation of the REIT (Real Estate Investment Trust) market – “one of some three dozen countries, no more “ – and a green market – albeit both markets have yet to draw any listings.

For Mr Portelli, then, the work continues: “If you want international business you need to be out there, investing in promotion and making contacts. At some point, it’ll hopefully pay off.”