Bright prospects for Ghana’s economy – HFC Boss
2010 holds a lot of promise for Ghana’s economy with the imminent production of oil in commercial quantities during the last quarter, Mr. Joseph Nketsiah, General Manager, HFC Investment Services said on Wednesday.
He said this followed signs of recovery for the local and world economies following the turmoil in the international financial markets and the uncertainty that culminated in the recession.
Addressing shareholders at the 14th annual general meeting of HFC’s three investment schemes namely, HFC Real Estate Investment, HFC Equity Trust and HFC Unit Trust for the year ending December 31 2009 in Accra, Mr. Nketsiah therefore urged shareholders to continue to invest in equity, especially during the year when equity prices were low.
“As you are aware, equity investments in the long run generate returns superior to those of less risky assets such as corporate bonds and treasuries”, he indicated.
However, Mr. Nketsiah expressed appreciation for the patience of shareholders during last year’s global financial crises which led to a loss in value of their investment and assured them of positive returns and growth in their investment for the coming year.
Giving an overview on the Equity Fund’s performance for the past year, Mr. Nketsiah said management’s commitment to re-strategise to minimise the effects of the general decline in the prices of stocks in 2009 yielded results as the trust posted a return of negative 19.94 per cent as against the Ghana Stock Exchange All share index return of negative 46.58 per cent.
Due to the huge redemptions and partly as a result of the fall in asset prices, the net fund value declined by 64.12 per cent to close the year at GH¢1.45 million.
“The total income of the Trust for the year was GH¢273,224 as against GH¢192,445 in 2008 “, Mr. Nketsiah added.
On the performance of the Real Estate Investment, the General Manager said it achieved a yield of 35.59 per cent for 2009, the highest in the industry and best performance in the last six years as compared to 28.97 per cent in 2008.
He explained that, as a result of the sterling performance, the fund attracted a lot of investment during the year and consequently increased its value from GH¢1.71 million as at December 2008 to GH¢5.66 million at the end of 2009, an increase of approximately 231 per cent.
On the outlook for 2010, Mr. Nketsiah said the Fund hoped to complete construction and sale of 16 two-bedroom semi-detached houses at Community 25 in Tema, 10 two-bedroom semi-detached gated Community at Community 25, acquire commercial property for rentals as well as acquire additional land for development.
The HFC Unit Trust achieved a yield of 23.5 per cent for the year ending December 2009 as against a yield of 18.70 per cent attained in 2008.
“This compared favourably with the benchmark 91-day Treasury Bill and the one-year Treasury note rates, both of which ended the year 2009 at 22.5 per cent and 20.0 per cent respectively,” the General Manager indicated.
The Fund size also increased from GH¢19.26 million in 2008 to GH¢21.52 million in 2009 an increase of 11.73 per cent.
“The increase in 2009 fund size by approximately GH¢2.26 million is attributable partly to high interest income earned on our investment and also additional investment received from existing and new client”, he said.
On the outlook for 2010, Mr. Nketsiah noted that prospects for the Ghanaian economy were bright despite the challenges in the international economy which was also supported by the economic growth agenda set by the Government.
He said the easing of government borrowing from the public meant that interest rates would recede while expectation were high of significant decline in the inflation rate towards government’s end of year target of 9.2 per cent at the back of continuing tightening of monetary policy and appreciation of the local currency on the foreign exchange market.
Mr. Nketsiah indicated that the Trust determination to continue to work hard to strategically position the fund to remain the best collective investment scheme in Ghana.