Business News of 2013-12-18

Investment market vibrant

Fund Manager of the Christian Community Mutual Fund (CCMF) Charles Adu Boahen says the country’s investment market has bright prospects, and there’s a need for the public to actively invest in the sector so as to fully share in the benefits.

Speaking at the maiden annual general meeting of the fund in Accra, he attributed the recent vibrancy in the capital market to the allocation of pension funds to specialised private fund managers, which has driven higher interest in share demand and, ultimately, in share prices.

“The capital market now has brighter prospects. For instance, equities exhibited signals of vibrancy owing to the allocation of pension funds to private fund managers -- some of which have begun actively investing in listed equities and fixed-income securities.

“This development increased share demand, which in turn increased share prices across the board. As fund managers, we will increase our exposure to equities as we anticipate this trend to continue,” he said.

Mr. Adu Boahen said the Christian Community Mutual Fund, going forward, will adjust its investment portfolio mix as well as identify alternative fixed-income instruments, specifically the real-estate sector, to enable it maximise returns.

This, he disclosed to B&FT, is backed by the fund’s continued impressive performance and the current upswing and improved market conditions.

The fund is expected to close the year with a 25-30 percent return on investments, which when realised will be an imposing increase over the 2012 figure of 11.2 percent.

“The fund has been doing better and better. In the first year of operations (2010) it recorded less than 3 percent, but the trend was quickly reversed to an 11.2 percent return in 2012. This year, the fund will be doing over 25-30 percent. Overall, it will be up over 51 percent by the end of the year.

“The fund’s performance has been improving because of management’s understanding and experience in how to mitigate certain internal shocks, including currency depreciation and inflation which directly impact cedi-denominated investments.

“Management will identify ways to hedge the fund against such exposures while identifying alternative fixed-income instruments such as the real-estate sector to tap into the potential that is currently pervading the sector,” he said.

The fund’s allocation to listed equities ranged from 48.79 percent at the beginning of 2012 to 46.11 percent. The portfolio also held some of its assets in a US dollar deposit as a hedge against potential cedi depreciation.

The fund closed 2012 with its share price at GH¢0.23. Assets under management were valued at GH¢440,608 and GH¢354,287 in 2011 and 2012 respectively, while total shareholders increased from 1,662 in 2011 to 1,677 in 2012, signifying a net increase of 15.

Mr. Adu Boahen said the fund will start a rigorous campaign to enhance visibility, increase shareholder capacity and also identify innovative methods-- including engaging an “SMS” platform to update shareholders on the status of their investments and the performance of the fund.