Launch of the MSE Equity Total Return Index

Minister for Finance Prof. Edward Scicluna today inaugurated the ‘Malta Stock Exchange Total Return Index – MSETRX’ which is a methodology that calculates the value of investment in equities through an index. In his speech he said that “this is going to bring the Maltese Stock Exchange in line with international Stock Exchange’s standards, reflecting the total return generated by equity investments”.

The MSETRX will be replacing the current MSE Equity Index which was used up till now.

The new Total Return Index (TRX) will take into consideration both the price fluctuations of the component shares as well as the dividends the companies pay. The MSETRX is based on the assumption that that all dividends are reinvested back into the index thus giving a better representation of the potential economic benefit of equity investments and the benefits of compounding. The MSETRX return from January 1st 1996 to December 31st 2016 would have been 10.91% annually, with a cumulative gain of 780%.

The Exchange’s Chairman Mr Joseph Portelli said that the tenants of sound financial planning suggests that the hefty dividends paid by many of the companies listed on the MSE, where possible, could be reinvested into buying more shares.

If fact he said the Exchange intends to introduce a dividend re-investment program facilitating the re-investment of dividends with lower costs. He also said that the Index’s stellar returns reflects very well on the excellent growth of the Maltese economy and fantastic performance of many of the companies listed on the Exchange.

The Malta Stock Exchange for the first time presented a special dividend of €2 million to the Government of Malta, which is a sign of the success the Malta Stock Exchange is doing.