26 MARCH 2003

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Malta Stock Exchange fails to react to Iraq conflict

Despite the fact that Malta is increasingly participating in a world economy that becomes more globalised by the day, Malta’s stock market is still to respond to the crisis in Iraq.
In fact, the Malta Stock Exchange has seen business as usual since the outbreak of the conflict, which has sent international share indices skyrocketing and plummeting in turn, and in the same stroke has provided ample room for short-term profits on international markets.
In fact, the companies listed on the MSE thought most likely to suffer as a result of the conflict through their integral involvement in the tourism sector - Suncrest Hotels, International Hotel Investments and Malta International Airport – have fluctuated little since the onset of war in the Gulf region.
In fact, only MIA shares have seen any fluctuation worth mentioning and the equity, up to yesterday, has only dropped 5c at that. Meanwhile, the total share index at the Malta Stock Exchange stands at basically the same level as it stood on 20 March, the day the bombing of Baghdad first began.
This is perhaps a reflection of the Maltese shareholder’s detachment from events taking place in the rest of the world and their tendency to buy up shares with the aim of collecting yearly dividends, as opposed to taking a more proactive role with their investments.
However, it’s still early days in a war that is expected to run into months instead of weeks and the overall effect of the conflict on Malta is yet to be gauged. The coming weeks, for example, should provide an indication of the short to medium term future prospects of listed companies operating in the tourism sector.
It could be said that the Maltese investor is standing firm in the face of the global economic speculation sweeping most of the world, but once these prospects become more tangible, the investor is expected to react accordingly.

Copyright © Newsworks Ltd. Malta.
Editor: Saviour Balzan
The Business Times, Newsworks Ltd, 2 Cali House, Vjal ir-Rihan, San Gwann SGN 02, Malta
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