Income Fund Manager of Stanlib Income Trust Fund (SITF), a limited liability company and subsidiary of Liberty Holdings, South Africa, George David Allotey, has revealed that the fund has made tremendous strides despite shortfalls in previous years.
The fund, according to the manager, churned out solid returns in 2017 yielding 22% against a benchmark of 17% with assets growing by 260% to GHS80million.
According to him, a steady increase in commodity prices as well as increased oil production from the additional oil fields; Sankofa and TEN also added an enhancement in trade position.
A surplus of 2.3% was recorded in 2017 as compared to a deficit of 4.2% in 2016, he added.
However, he indicated that revenue shortfalls of about USD 1.6 billion resulted in a fiscal deficit of 5.9% as at December 2017, marking an improvement on the recorded 8.7% in 2016.
Mr Allotey, who exclusively made these remarks to Today on the sidelines of the7th Annual Stanlib General Meeting, was elated at the remarkable feat chalked up by the fund, attributing it to the hard work of the managers of the fund and the collaborated efforts of members with evidence of the Annual Report for 2017 as presented to the Unit holders at the Holiday Inn Hotel, Accra.
According to him, with an estimated GDP growth of 8.5% painting a dazzling picture of Ghana’s economic narrative in 2017 with favourable external factors, positive investor and business sentiments, improved power supply, a rejuvenated oil and gas sector and policy initiatives undertaken by the new administration were essential to the fund’s growth story.
He further added that the equity market rallied with returns of 54% in 2017, reflecting the positive economic fortunes and growing investor confidence.
Moreover, he continued that the insurance of GHS4.4billion ESLA bond to retire the energy related debt improved sentiment in the banking stocks on the bourse.
He also added that directives on the minimum capital requirement sent the right signals about the central bank’s determination to strengthen the banking sector.
“These are expected sanitise the sector by improving asset quality and providing liquidity in the sector. A positive inflows and a relatively weaker dollar saw the cedi dip by 5% in 2017 still better than 9.6% in 2016 with the relative currency stability and low prices of goods and services provided the impetus for the disinflationary process to continue,” Mr Allotey further added.
Inflation, according to him, reduced to 11.8% in 2017 from 15.4% in 2016 with the relatively benign conditions driving interest rates downwards as the policy rate declined to 20% from 25.5% in 2016 with short term interest rates continuing the downward trajectory averaging between 14% to 15% in 2017 as the Central Bank continued the yield curve raising business confidence up to 102 points from 91 points in 2016.
For her part, the Cash Trust portfolio Manager, Brenda Kissi, added that the expected GDP growth of 6.8% as projected by the government for 2018 was well within range.
Story: Prosper A. Kwaku SALASSY