Sunday, 20 May 2001

Losing composure

The Malta Independent on Sunday

Losing composure

The loss of composure by the Prime Minister in his 1st of May Ta` Qali speech is stuff for historical records. No amount of tongue twisting by faithful apologetics will change the gaffe which would still have been` serious if uttered by a junior politician, let alone coming from a Prime Minister with a 40 odd year experience in politics.

The gaffe charade continued in the protocol arrangements during HH`s visit.` Clearly the Prime Minister and his ministers were in competition for the best shot with HH and the protocol arrangements so meticulously informed in writing in advance to the Leader of the Opposition were thrown to the wind right when it mattered.

But to make it three in a row we had the gaffe by a senior minister informing the Prime Minister that he is aspiring to take his place.` These things are just not done. When there is a leader` who has repeatedly expressed his intention and will to soldier on,` party loyalty demands that no ego trips are allowed to expose the eagerness of the acolytes to send him into retirement.

Dr. Lawrence Gonzi the PN deputy leader, gave a vintage example of how aspirants should behave in such circumstances.` When asked by a journalist whether he also considers himself ready to take the PM`s job,` Dr Gonzi just laughed it off and said he is too busy with his schedule to think about such things.

And to ensure that no doubt at all is left on how seriously composure is being lost, on Sunday the self-proclaimed contender for the PM`s post uttered a lot of non-sense verging on the libellous. This concerned my defence of small shareholders and the current state of play on the Malta Stock Exchange.

The quintessential message coming out from his eruption is that the current downturn of prices on the Malta Stock Exchange is all the fault of the likes of me who had defended the small shareholders of the former Mid-Med Bank from being thrown to the wolves by the government. Had the government had its way small shareholders would have been forced, like other Mid-Med shareholders in the public sector,` to sell at the ridiculous price of Lm2.90 which the government obtained for its investment in Mid-Med Bank.

Our neo-aspiring prime minister said that the current downturn on the Borza is purely the correction of fanned prices that the likes of me had` manoeuvred to embarrass the government and prove the Opposition`s claims that Mid-Med was` sold on the cheap.

Had` my brother`s Lm25 fine court decision not` diluted my faith in the administration of justice in cases which could embarrass the government,` I would seriously consider libel.` But having no time to lose I prefer to win by facts and arguments rather than by court procedures.

Mid-Med Bank sale was concluded nearly two years ago. Two years is a very long time in the investment world where prices fluctuate widely in much shorter time spans.

In terms of Initial Public Offerings there is generally an after launch period of 6 months which will prove whether the launch was correctly priced or not.` After 6 months the market moves wherever events, psychology, greed and so many other factors which affect market prices will take it. In my criticism for the low price obtained for the deal I had expressed a deep belief that in those circumstances I could have obtained at least Lm4.50, probably Lm5, possibly Lm5.50.

The market was re-opened on 2nd June so the 6months normal after market period ended on 2nd December 1999. On that day HSBC Malta shares were quoted at Lm5.23. Even this week with all the market downturn, HSBC shares were still quoted at just under Lm5, well within the price range I had indicated.

If our neo-aspirant for the top executive post has any lingering doubts that he has been had, at our expense, by HSBC then he is probably the only one left around here. As recently as on 30th April 2001 his Prime Minister admitted that they were rushed off their feet in the Mid-Med deal and it would have been better if consensus were sought more calmly over the matter.

And he is probably the only around left who does not admit that the downturn of equity prices on the Borza has much to do with the new tax on collective investment schemes, even those that invest in local securities. The problem is that such measures have helped destroy equity values totally out of proportion with the tax revenues they are expected to generate. If privatisation of Bank of Valletta and Maltacom goes ahead in these conditions the government would have burnt some Lm70 million potential privatisation revenues purely to cash in Lm3 million.` Not really a good deal from an aspiring prime minister.

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