Pension funds urged to invest in equities on GSE
Managing Director of the Ghana Stock Exchange (GSE), Ekow Afedzie, has urged the various pension funds in the country to invest in equities listed on the local bourse.
According to Mr Afedzie, given the bullish run of the local bourse, pension funds can realise good returns from investing in inequities.
“Though pension fund investment in fixed-income securities continue to increase, the same cannot be said of equities. Since pension funds are long-term in nature, opportunities exist for players [pension funds] in this space to invest in equities as well,” stated Mr Afedzie addressing industry players during a workshop on the theme; “Maximising Investment Returns Using the Ghana Stock Exchange.”
“Growth in equity investments is critical in making patient capital available for businesses to expand and grow to support the national economy,” he added.
Also addressing the workshop was CEO of the National Pensions Regulatory Authority (NPRA), Hayford Attah Krufi, who called for a vibrant equities market that is rewarding for pension schemes.
“We need to have a vibrant equities market with rewarding returns for pension schemes to channel more investments in making a real impact on the economy,” he said.
“This collaboration between all capital market players is critical to ensure retirement income security and social protection for all Ghanaians,” he added.
Director-General of the Securities and Exchange Commission (SEC), Reverend Daniel Ogbarmey Tetteh, also underscored the need for pension funds to invest in long-term securities such as equities.
Read: Africa: GSE leads stock markets on the continent with 36% returns in dollar terms
“The stock market offers interesting investment opportunities for asset owners who have time on their side such as pension funds,” he noted.
Adding that the implementation of some initiatives in the recently launched by Capital Market Master Plan will aid in improving liquidity on the stock market.
Meanwhile, the Accra local bourse for the first half of 2021, emerged the best stock market on the African Continent.
The Ghana Stock Exchange (GSE) performed better than stock exchanges such as the Johannesburg Stock Exchange (JSE) and Nairobi Stock Exchange (NSE) recording investment returns of 36.13 percent on appreciation of stock prices in dollar terms.
JSE and NSE recorded investment returns of 14 percent and 15.5 percent on appreciation of stock prices in dollar terms respectively.
| COUNTRY | STOCK EXCHANGE | RETURN |
| Ghana | GSE-CI | 36.13% |
| Uganda | USE ASI | 19.39% |
| Kenya | NSE ASI | 15.55% |
| South Africa | JSE ASI | 14.00% |
| Namibia | NSX 01 | 11.08% |
| Morocco | MASI | 10.99% |
| Zambia | LUSE ASI | 10.42% |
The recorded performance for H1 2021 follows a poor performance recorded for same period last year as investors diverted funds from the stock market into other safe haven assets such as gold due to the impact the Covid pandemic had on listed companies, thereby affecting share prices on the bourse and subsequently returns for investors.
Twelve (12) companies, for the first half of 2021 appreciated in value as compared to the six losers at the end of the first half of the year.
MTN Ghana maintained its impressive run as the biggest gainer on the Ghana Stock Exchange, recording about 87% return for shareholders. It is presently trading at 1.20 pesewas, far above its listing price. Other stocks that impressed during the first half of the year were Guinness Ghana Breweries (43.3%), Societe Generale (43.75%) and GCB Bank (33.33%).
Some losers were Ecobank Transnational Incorporated (-25%) and Access Bank (-20.50%).
At the end of June this year, the GSE’s market capitalization stood at Ghs 61.3 billion.
