Global Funds SICAV p.l.c. recently held its seventh Annual General Meeting at the Radisson Baypoint Resort, St. Julian’s, during which shareholders approved the Annual Report and Audited Financial Statements for the year ended 31 July 2005.
There were no changes in the company’s Board of Directors, which is composed of Anthony C. Azzopardi (Chairman), Dr Tonio Fenech, Adrian Galea, Dr Norval Desira and John Ellul Vincenti. PricewaterhouseCoopers were reappointed auditors.
Azzopardi stated that investors who experienced difficult international and local market conditions should now be encouraged by the positive performance registered by the sub-funds of the company. In particular, the bid-to-bid price of the Malta Privatisation & Equity Fund increased by 26.35% for the period from 31 July 2004 to 31 July 2005, from Lm0.7907 to Lm0.9991.
On an offer-to-bid basis the share price of this Fund increased by 22.67% from Lm0.8144 to Lm0.9991 for the same period. From the date of launch on 15 December 1999 to 31 July 2005, the Malta Privatisation & Equity Fund registered an annualised return of -0.01% on an offer-to-bid basis. The Chairman thanked the company’s Investment Advisor, Globe Fund Advisors Limited, for their active contribution in helping to achieve such results during the last financial year.
A presentation to the shareholders present at the AGM was addressed by James Blake, Director of Globe Fund Advisors Limited, who reviewed developments in the local and international capital markets.
Blake also analysed the performance of the six sub-funds of the company, namely the Global Bond Fund Plus, the Malta Privatisation & Equity Fund, the Aberdeen (Malta) China Opportunities Fund, the Aberdeen (Malta) Technology Fund, the Melita International Bond Fund and the Melita International Equity Fund.
Blake explained how the Maltese equity market experienced exceptional growth over the past year and comparatively outperformed major international markets. This was positively reflected in the performance of the Malta Privatisation & Equity Fund, which principally invests in Maltese listed securities, he continued. Growth was also driven by renewed talks of privatisation coupled by strong earnings and dividend yields, particularly in the banking sector. “This has re-ignited investor interest who, after a period of relative inattention, is recognising opportunities and regaining appetite for the local equity market”, Blake said. “With high investor liquidity and attractive yields when compared to low interest rates, there is also stronger demand in the Maltese bond market, particularly for Malta Government Bond issues,” Blake said.
“With Malta’s intention to adopt the Euro, such holdings are likely to remain attractive, particularly in a scenario where the European Central Bank maintains the current low interest rates.”
Blake stated that “Globe Fund Advisors Limited remains positive about the Maltese market particularly in view of renewed investor confidence, strong company performances, low interest rates and the possible increased impetus from the upcoming pension reform.”
Commenting about the international scene he said that “the US Federal Reserve, the Bank of England and the European Central Bank were at different stages of monetary tightening. The US economy continued to attract close attention as reasonably strong economic growth ensured a tighter monetary policy bringing the Federal Funds Rate up from 1.25% in July 2004 to 4.25%. Widening US interest rates have been key to the dollar’s rally this year, helping to suppress concerns about the huge trade deficit that hurt the currency for three years to the end of 2004. On the other hand, European Central Bank rates have only recently been raised to 2.25% for the first time in more than five years.”