Debt market remains bullish - Databank CEO

Activity on the Ghana Fixed Income Market (GFIM), the market for fixed-income securities such as bonds, notes and bills, continued to increase as volumes traded for the year so far reached GH¢92.35bn, up 128 percent when compared to the same period last year.

The market ended the month of May with a closing volume of 16.45bn, representing a 3.41 percent increase from last month and an 85 percent increase compared to the same period last year, according to data from the Ghana Stock Exchange.

Kojo Addae-Mensah, the Chief Executive Officer of Databank, the money manager, said in an interview with Business24 that although the debt market is currently very vibrant, it is mostly driven by government securities, with only a few corporate bonds listed.

“There is still a lot of work to be done on the side of corporate bond listing. For the secondary market to be trading around GH¢80bn before half year, it speaks volumes. But I feel sad because economies don’t grow on the back of debt, but rather on the back of equities,” he added.

The slower growth of equities “has been as a result of the risky nature of the equities market and the high rates coming from government of Ghana bonds”, he explained.

Following three years of negative returns to investors, the equities market has rebounded this year, with a year-to-date return of 24.73 percent at the end of May as measured by the GSE Composite Index.

Trading activity on the Ghana Stock Exchange was high during the month, driving the value of shares traded to GH¢72.7m, the highest in the year so far and representing a month-on-month increase of 134 percent.

Investor confidence is bouncing back with companies such as Goil, GCB Bank, SG Bank, Enterprise Group, and Standard Chartered recording gains in their share prices.