An Examination of Preference Share Issuance by Companies Listed on the Malta Stock Exchange
Journal Title: Journal of Corporate Governance, Insurance, and Risk Management - Year 2024, Vol 11, Issue 1
Abstract
This investigation addresses the issuance of preference shares by companies listed on the Malta Stock Exchange (MSE), identifying key determinants and obstacles associated with these initiatives. Semi-structured interviews were conducted with 27 stakeholders, including representatives from 23 MSE-listed companies (MLCs), one MSE official, two stockbrokers, and an advisor from a leading global accounting firm. An evaluation of the financial distress faced by issuers prior to the issuance of preference shares was also undertaken. Despite the establishment of the MSE in 1992, preference shares have been issued by only two listed companies, indicating their minimal utilization as financial instruments within the Maltese market. The findings reveal that preference shares are primarily issued to meet financing needs, support corporate expansion, prevent control dilution, capitalize on favorable market conditions, maintain balanced capital structures, and enhance debt capacity. However, several barriers hinder the issuance of preference shares, including limitations inherent to the Maltese capital market, low investor interest, perceived complexity, and a general lack of understanding regarding this hybrid financial instrument. The study underscores the necessity for improved educational efforts concerning preference shares and elucidates the distinctive characteristics of the local market.
Authors and Affiliations
Lauren Ellul, Bernice Manché, Peter J. Baldacchino, Norbert Tabone, Simon Grima
Keywords
Related Articles
- EP ID EP738943
- DOI https://doi.org/10.56578/jcgirm110101
- Views 37
- Downloads 1
Detection of Anomalies in Spot and Futures Markets and Their Directional Effects: An Analysis of the BIST 100 Index
The occurrence of market anomalies has been steadily increasing in contemporary stock markets, particularly within the context of the current economic climate. The volatility of stock markets, exacerbated by the recent i...
Modeling Vehicle Accident Risks in Auto Insurance: An Application of Generalized Linear Models in the Context of the National Insurance Company, Regional Directorate of Setif, Algeria
This study investigates risk distribution models in the context of auto insurance in emerging markets, with a focus on the National Insurance Company (SAA), regional directorate of Setif, Algeria. The research applies ge...
Impact of COVID-19 on Audit Risk Assessment Procedures: Insights from Malta
This investigation explores the transformative effect of the COVID-19 pandemic on the risk assessment processes employed by auditors. The primary focus is on how the pandemic has reshaped the identification and evaluatio...
The Role of Shared Strategic Values in Achieving Sustainable Success in Global Logistics Enterprises
Strategic values play a pivotal role in the long-term success of logistics enterprises, influencing interactions with customers, employees, and stakeholders, and driving sustainable outcomes. In the context of the global...
Maritime Dynamics and Energy Security in the Eastern Mediterranean: Analyzing the Blue Homeland Doctrine
Energy resources constitute a fundamental necessity for the sustenance of nations, with their security being a critical facet of both national and economic stability. The Eastern Mediterranean, a pivotal route for the gl...