Global Funds SICAV plc has held its seventh annual general meeting at the Radisson SAS Bay Point Resort, St Julian's. Shareholders approved the annual report and audited financial statements for the year ended July 31, 2005.
There were no changes in the company's board of directors: Anthony C. Azzopardi, chairman; Dr Tonio Fenech, Adrian Galea, Dr Norval Desira and John Ellul Vincenti. PricewaterhouseCoopers were reappointed auditors.
Mr Azzopardi stated that investors who experienced difficult international and local market conditions should now be encouraged by the positive performance registered by the company's sub-funds.
In particular, the bid-to-bid price of the Malta Privatisation and Equity Fund increased by 26.35 per cent between July 31, 2004, and July 31, 2005, from 79c07 to 99c91.
On an offer-to-bid basis, the fund's share price rose by 22.67 per cent from 81c44 to 99c91 for the same period. From the date of launch on December 15, 1999, to July 31, 2005, the Malta Privatisation and 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.
The shareholder presentation was addressed by James Blake, director of Globe Fund Advisors Limited, who reviewed developments in the local and international capital markets. Mr Blake also analysed the performance of the six sub-funds of the company: the Global Bond Fund Plus, the Malta Privatisation and Equity Fund, the Aberdeen (Malta) China Opportunities Fund, the Aberdeen (Malta) Technology Fund, the Melita International Bond Fund and the Melita International Equity Fund.
Mr 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 and Equity Fund, which principally invests in Maltese listed securities.
Growth was also driven by renewed talks of privatisation coupled by strong earnings and dividend yields, particularly in the banking sector. "This has reignited investor interest who, after a period of relative inattention, is recognising opportunities and regaining appetite for the local equity market," Mr 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," Mr 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.
"Globe Fund Advisors Ltd 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 on the international scene, he said: "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 per cent in July 2004 to 4.25 per cent.
"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 per cent for the first time in more than five years."