One Flawed Bond Could Shock Entire Maltese Market, MP Clayton Bartolo Warns
Independent MP and former Tourism Minister Clayton Bartolo warned that in a country as small as Malta, one bond that goes awry could cause shockwaves across the entire local market.
Bartolo spoke out amidst a discussion on the future of the Manoel Island project, which has attracted significant political and civil criticism and caused a level of uncertainty among its 5,000 or so bond holders.
“Malta’s bond market is relatively small and every individual bond carries a lot of weight, even if the amounts could be viewed as relatively low,” he said.
“Problems in one bond could cause shockwaves across the entire market. When a bond cannot be repaid or if it is bound to dubious guarantees, there is a serious risk that investors could lose trust in more than that specific project, but in the entire market.”
Pointing out that thousands of Maltese people invest in bonds as a form of future security, Bartolo warned that market uncertainty could have a direct negative impact on their income and quality of life.
He called for a greater level of government oversight, particularly by the MFSA, on bonds that are issued for projects set to be built on public land that have been leased out to the private sector.
This is because the government is obliged to insert obligations and termination clauses in concessions to ensure that public assets are used as effectively as possible.
However, he said the government also has an obligation towards ensuring the stability and transparency of local financial markets.
“Investors should be able to trust that every bond is truly sustainable and supported by clear realities,” he said.
Bartolo said that while the government should intervene to safeguard investors in light of questions about the project’s future, it should never bail anyone out.
“In such a small market, any shift could have serious consequences,” he said.
“We need more transparency and proactive regulations when it comes to concessions of public land. The most important thing is to strike a balance between safeguarding public assets and protecting investors, particularly small investors who depend on this income for their future.”
“It is also important to safeguard investor trust, which is nothing less than our future economic stability.”
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