Feb. 22 (Bloomberg) -- Europe’s bailout plan for Greece may be a boon for Ghana’s stock market, luring risk-wary foreign investors to the bourse, said Managing Director Kofi Yamoah.
“As of now the market is in positive returns and with the Greece bailout we are hopeful that the global risk aversion will reduce for the foreigner investors to be on the market fully this year,” he told reporters in Accra, the capital, today.
The Ghana Stock Exchange’s Composite Index of all 35 listed companies dropped 2.3 percent last year as offshore investors sold their stakes in companies in Ghana, West Africa’s second- biggest economy, said Yamoah. Since the beginning of this year, the bourse has gained 2 percent, and traded a 988.73 by the close today.
European finance ministers approved a 130 billion-euro ($172 billion) package for Greece on Feb. 20 by tapping into European Central Bank profits and convincing investors to provide more debt relief to the Mediterranean country. The deal includes a 53.5 percent writedown for investors in the nation’s debt.
Ghana’s market could gain 10 percent to 17 percent this year as foreigners return and local companies improve their performance, Lisa Squire, a stock analyst at Accra-based IC Securities Ltd., said Feb. 20.
“Ghana’s growth is forecast to be a strong 9.4 percent this year after first year of oil production shot growth up to 13.6 percent last year,” she said.
The country’s budget deficit is expected to narrow to 4.4 percent of gross domestic product this year from 4.8 percent in 2011 as government revenue increases and spending is reined in even during an election year, said Finance Minister Kwabena Duffuor on Feb. 20.
The Ghana Stock Exchange will list its first exchange- traded fund this year, linked to the price of gold, Yamoah said.
“Looking at the interest of some investors in commodity linked assets, we are expecting this ETF to increase liquidity on the market,” he said.“Investors seeking to protect the value of their investments can buy into the ETF to be shielded by the price of gold.”
Kosmos Energy LLC, the U.S. oil explorer and one of the partners at Ghana’s Jubilee oil field may start trading shares on the market this year, he said, following last year’s listing by field operator Tullow Oil Plc.
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