Middlesea Valletta Life held a breakfast seminar on Friday 5 February 2010, for its financial intermediaries and for Bank of Valletta’s Savings & Investment Officers.
David G. Curmi, chief executive officer, opened the seminar by explaining that Middlesea Valletta Life was keen on helping all intermediaries keep abreast of developments in the international and local financial markets, particularly considering the volatility experienced over the past 18 months.
The seminar provided a review of the markets in 2009 before considering investment opportunities for 2010.
Stuart Fairbairn, General Manager at Growth Investments, provided an economic background to the global economy, explaining the world’s GDP contracted by 0.8 per cent in 2009, but with divergences across regions with developed economies decreasing by 3.2 per cent and emerging economies increasing by 2.1 per cent. China was the standout economy with a GDP growth of 8.7 per cent that was projected at 10 per cent in 2010. Emerging economies in general were expected to grow by six per cent in 2010.
In 2009 Stock Markets around the world followed a common trend, decreasing in the first three months before staging dramatic recoveries. The FTSE All World index fell 24 per cent to March before recovering by 75 per cent at the end of the year. Different performances were noted between various countries with the Chinese Stock Market increasing by 114 per cent when compared to the S&P500 which grew by 25 per cent.
Mark Vella, Head of Valletta Fund Management, gave his presentation on the local equity and bond markets and explained the MSE index fell by 16 per cent in the first three months of 2009 before rebounding to finish the year with a 7.4 per cent gain.
Marzena Formosa, Chief Investment Officer at Middlesea Insurance, explained that massive quantitative easing and low interest rates helped bolster liquidity in the markets, leading to strong performance in fixed income investments. The best performing bonds in 2009 were High Yield as appetite for risk returned, although Investment Grade Bonds also performed very well.
In currency markets the Euro strengthened against all major currencies with the exception of the Sterling, which was explained by Sterling’s weakness prior to 2009.
Middlesea Valletta Life Actuary Mr Jonathan Kemp then explained the workings and rationale of the MSV With Profit Fund and how it can play a role as part of a well diversified investment portfolio.
Turning to prospects for 2010, Mr Stuart Fairbairn said that the general consensus amongst fund managers indicated that equities would outperform cash and bonds over the next six to 12 months, and that emerging market equities would be the strongest performers. In the Fixed Income sector, Government Debt offered very limited opportunities, however High Yield and Emerging Market Debt still offered upside potential.
The seminar was concluded by Mr Stuart Fairbairn who stated that “time in the market is better than timing the market” and reminded the intermediaries that regular savings plans offer clients the chance to benefit from volatile markets by purchasing more units when prices are depressed, a process known as Pound Cost Averaging.
Middlesea Valletta Life intends to run quarterly investment updates for its intermediaries and employees. Any questions relating to savings and investments should be directed to your financial adviser, Bank of Valletta or Middlesea Valletta Life.