DATABANK OF GHANA MFUND


Let me digrace a little, I young of all people is the last person to consider investing in fixed income securities. I regard it as a lazy man's job. How can you give a financial institution 100K with 10% interst without collateral and the same institution give out same 100k to a customer with collateral at an interest rate of 18 %. Well well, I realised that it is important to have a levearage on your investible funds through fixed income returns.

MFUND
Databank Mfund is money market mutual fund that the investment horizon is in fixed income securities like bonds, commercial papers, fixed deposit all within Ghana.

This is very useful as fund invested is guaranteed and increase is assured depending on prevailing interest rate.

WHY GHANA ?

1 USD = 1.4 GH Cedis
100 Naira = 1 GH Cedi
46 Ksh= 1 GH Cedis

At the moment the prevailing interest or the cost of funds is above 20 percent, one of the highest fixed deposit returns in sub saharan Africa.

This acts as a leverage because in bearish years like 2008 and 2009 databank Mfund returned a tidy 22 % in Ghana cedis. The highest interst rate in nigeria is 11 %.

I see a superior currency advantage here as the new Ghana cedis is a stronger currency than Nigerian naira ocoupled with a good interest rate. I subsscribed to it in 2009.
In addition non citizens cannot invest directly on govt or corporate bonds except indirectly through fund managers like databank.


For details vist www.databankgroup.com.

INVESTING IN GHANA 1


You can invest in Ghana in two ways


(i) Investing in mutual funds

(ii) Opening stocks investment account with a broker.


I have earlier exhausted the mutual funds aspect using the databankgroup as the fulcrum. You can equally look at cal bank mutual fund products.

BROKING A/C

Open a CSDA(Central Securities Depository Account) with any of your preferred stockbrokers
by filling some physical form. Copies of the following will be required
Your Internationalpassport
Two Passport photoghraphs

You will also complet Stockbroking new client a/c form.

Be aware that opening CDSA a/c takes several days sometimes weeks or months before your a/c is opened.

I use databank group but there are numerous other good stock broking firms. Most banks
have stockbroking arms.

Useful websides for further info :-
www.databankgroup.com
www.calbrokersghana.com
www.ibrokerghana.com
www.stockforumghana.com
www.gse.com.gh ========> GSE website

Investment in ghana 3

Suggested Dividend Solution.


Amal Bank Of Ghana has a special checking account for non residents called amal non resident account. That is the account that I use for dividend collection.

For Further details and specific requirement visit

www.amalbank.com.gh

Non resident account can be opened within 2 working days

INVESTING IN GHANA 5

iBROKER PERSPECTIVE


The stockbroking arm of CAL bank (quoted in GSE) have an "online ?" stockbroking product called ibroker.

www.ibrokerghana.com

I have been nosing around to locate any non resident retail subscrber to the widely advertised product but none yet.

For now my only reservation for the product is that when you buy shares, paper certificates are still issued, that means they are yet to embrace electronic CSD account.

INVESTING IN GHANA 6

Still on the non resident bank account I suggest you go for both Cedi & USD denominated accounts .
The main advantage of USD account is it gives you the choice to wire funds to your account and also issue a USD denominated check.

Be aware quite unlike Kenya if you wire fund in any particular convertible currency (Sterling, USD, Euro), it has to be received in GHANA bank with the same currency. Automatic conversion to local or other currencies are not permitted.

Illustration

Mr Ngige a Kenyan wire 1,000 USD to his cedi denominated AMAL bank account in Ghana.

The USD 1,000 when it hits Amal bank, will not be automatically converted to Ghana Cedis as what obtains in Kenya. The money with hang, or forwarded back to MR Ngige.

If Mr Ngige has opened a USD account in Ghana, he would have been able to wire from his Kenya USD account to his Ghana USD account without problems.

This is also applicable to most west African banks.