Mutual Monday: What you must know about EPACK, the ‘Praise-the-Lord’ fund.

It’s another Mutual Monday and welcome to journey to mastering mutual funds and unit trusts. With reference to my previous post, (Mutual Monday: Investment Funds (mutual funds & Unit trusts) in Ghana), let’s take the funds one by one and know more about them. Let start with EPACK.
EPACK is a mutual fund, established and managed by Databank Financial Services since 1996. It is a long term (from 3yrs) investment fund that pools money in different amounts from different people for investment  primarily in Shares listed on the Ghana Stock Exchange.

EPACK is seen by some people as a less risk investment compared to investing directly in the stock market.  This school of thought believes that, the risk is shared by all Epack investors just as all other mutual funds. This is true but there are a lot more risks attached to investing in a stock market oriented (about 70%) mutual fund. I would leave that for another day but know that Epack is able, courtesy of the mobilized funds, to invest in more securities on the GSE and thereby reduce risk through diversification.
Historical data has proven that, a GHc 1000 investment in Epack in December 1996 would grow to Ghc 3990 by December 1998, and this would further grow to Ghc 11,920 by Dec. 2002. When that amount is still kept in Epack, it would grow to Ghc 57,080 and then increase to Ghc 83,130 by Dec. 2008. Data from the past performance also shows that if one keep that same amount till Dec. 2010, it would become Ghc 99,930. Below is the various returns from 2004 to 2010.

  
Epack is obviously not performing now as it used to perform in those years. Don’t just rush and go and put your money into something you don’t really understand. Growth has been slow in the past two years. Epack does not only invest the pool of funds in the Ghana but also diversity into other countries. In 2010 for instance, Epack invested 47% in Ghana, 12% in Egypt, 2% in South Africa, 8% in Botswana, 4% in Nigeria, 13% in Malawi, 5% in Uganda and the rest in Kenya, Tanzania, Mauritius and Cote d’Ivoire.
Over the years, Epack invested in companies like Fan Milk Ltd (Ghana), Ghana Commercial Bank Ltd. (Ghana), SG-SSB Ltd (Ghana), National Societe General Bank ltd. (Egypt), Enterprise Group Ltd. (Ghana), CRDB Bank Ltd. (Tanzania) Medine Sugar Estates Co. Ltd. (Mauritius), Illovo Sugar Ltd. (Malawi), Press Corporation Ltd. (Malawi).
Last year, Epack invested 59% in Non-Financial Stocks and 41% in Financial Stocks. The investment in Ghana was also reduced to 36.30% and the rest of the funds invested outside Ghana exposing our monies to other economic pressures and global recession.
Epack currently has two Fund Mangers, Daniel Ogbarmey Tetteh and Evelyn Ofosu Darko who use biblical quotations to assure shareholders of the future performance of the fund. Their final words for shareholders last year was a quotation from the Bible, James 5:7b-8a (NIV) that states that, ‘See how the farmer waits for the land to yield its valuable crop and how patient he is for the autumn and spring rains. You too, be patient and stand firm’. This is what I call, “Biblical Fund Management” or ‘God would make it’ fund management. Despite what people say, Epack still has good financials and fund managers and long term investors can consider it as an investment opportunity.
  Below are the Epack’s top ten equity holdings for 2011. 
2011 Top Ten Equity Holdings of Epack.
In my next post we would look at the ifund, which is managed by the EDC (now Ecobank Capital). There would be future projections for each of the mutual funds and how and when one can take advantage of them. 

Sector by Sector Market Capitalization for 1st Half, 2012 on Ghana Stock Exchange

Courtesy: CBL Research

By the end of the first half of 2012, the most capitalized sector on GSE is the Mining and Oil Sector. This sector had a market capitalization of GHS 48,874.46 million, making 88.81%. This sector can boast of a mining giant,
 AngloGold Ashanti (AGA), a leading global gold producer, operating in 11 countries and listed on five (5) stock exchanges including the New York Stock Exchange (NYSE). Moreover, this sector
also have another giant, Tullow Oil plc (TLW), a leading independent oil and gas, exploration and production group that listed on GSE not so long and on other exchanges.
With a very huge gap, the Finance sector followed the Mining and Oil sector and had market capitalization of  GHS 4,618.64 million which is equal to 8.39%. It can also boast of a banking giant, Ecobank Transnational Inc. (ETI) (mostly described as a world class pan-African bank group) which dominates capitalization in this sector.
The third most capitalized sector is the FMCGs & Pharmacy sector. This sector had GHS 754.70 million and this represented 1.37% of the total GSE market capitalization.
Following the FMCGs & Pharmacy sector is the Manufacturing & Trading sector and this takes only 1.02% of the market with GHS 562.62 million capitalization. The Manufacturing & Trading sector can also boast of a giant such as Unilever Ghana (UNIL), a manufacturer of leading food brands, home and personal care.
The Agric-business sector on the exchange achieved a market capitalization of GHS 214.43 million and that’s less than 1% (actually 0.39%).
Finally, the ICT & Paper sector had market capitalization at the end of the first half as GHS 9.50 million, making 0.02% of GSE.

Guinness Ghana Brewery Ltd. (GGBL) dominated trading with 43.05% of the trade volume to close the week on GSE

Trading began on Tuesday this week because of the holiday. The stock market’s five-day winning streak for last week was halted as losses in two equities forced the GSE-Composite Index 7.08 points lower at 1,038.40 points. The GSE-Financial Stock Index recorded a 1.01% decline
to close at 890.79 points, as the losses recorded on Tuesday were those of financial stocks.
Trade volume declined by 66.62%, compared to the previous session, as 0.09million shares exchanged hands for a sum of GHS 0.09 million, 27.77% less than the previous session. Ecobank Transnational Inc. (ETI) dominated trading in terms of volume with 19.42% of the shares traded, while UNILEVER dominated in terms of value, accounting for 34.43% of the turnover.

CAL Bank was the sole gainer, closing at a year-high of GHS0.30, from GHS0.29. ETI and SIC Insurance declined by a pesewa each to close at GHS0.13 and GHS0.32 respectively. 

Trading continued on Wednesday and on this day GSE-Composite Index climbed 2.30 points to close at 1,040.70 points, following gains in three equities, bringing the year-to-date change to 7.40%. The financial stock benchmark followed suit, closing 2.61 points higher at 893.32 points
A total of 0.22 million shares were traded between 15 equities, for a sum of GHS 0.31 million. Trade volume was more than double that of the previous session while the turnover more than tripled. Ghana Commercial Bank (GCB) led the market with 51.96% of the volume recorded and 75.74% of the total trade value.

GCB gained 3pesewas to close at a year-high of GHS 2.00. Other gainers were Fan Milk Ltd (FML) and SIC, closing at GHS1.95 and GHS 0.33 respectively. On the downside, Standard Chartered Bank (SCB) declined by a pesewa to close at GHS 46.08 for the day.
On Thursday, Ecobank Ghana (EBG) held lion’s share of trade value and Market recorded worst performance. (click to read more on that.)

For the last day of the week, the local bourse returned 0.14% as gains in three equities pushed the GSE-Composite Index 1.47points higher, to close at 1,032.13 points. The financial stock benchmark however, dropped 0.96 points to 882.04 points, as no gains were recorded in financial stocks as against a decline in SCB’s stock price.
With 0.46 million shares trading, the day’s volume was nearly four times the previous session and the turnover of GHS0.62 million, more than four times the previous session. GGBL dominated trading with 43.05% of the trade volume and 76.15% of the trade value.

Five price changes were recorded today. Three gainers, FML, GGBL and TLW, with GGBL closing at a year-high of GHS2.35. SCB and TOTAL recorded losses.


Source of Data: CAL Brokers Ltd & Ghana Stock Exchange

Is Ezwich stealing from the Cashless Society? Greed vs Pain

The ezwich system which is supposed to make life easier for us is causing more pain by ‘draining’ our accounts more than necessary. Ezwich is the brand name for the National Switch and Smart-card payment system and this system offers Deposit taking financial institutions (universal banks, rural banks and Saving & Loans) a platform that enables them to interoperate, obviously at the expense of the customers or users of the ezwich. The National Service Personnel
are perfect examples of such users or victims.
This card is supposed to secure our monies against robbers and bring some level of convenience to the users but is rather robbing users gradually.
In a personal experience, I paid exorbitantly on the transactions I made in a single day. Let me walk you through my experience.
On Monday 4th June, 2012, I made an ‘Offline Balance Enquiry’ at the ATM (Merchant REF. NO. 5496) and was charged 0.10p, obviously a very small amount. I went further to withdraw GHS 20.00 and was charged a fee of 0.20p. (Accumulated Fee: 0.30p) That is cool too.
After those transactions, I made an ‘Online Auto Load’ (this involves loading salaries or allowances or monies paid in to the account on to the card) and I was charged 0.50p.That makes an accumulated fee of 0.80pso far. The machine indicated on the slip, ‘’Transaction Successful, We Serve You Better’’. Hmm, let’s go on.  I then decided to send money to my little brother and this was an ‘Online Card2Card’ transaction. This was where the magic started. I was charged GHS 1.00 which was indicated as FEE (S) = 0.50p and FEE (R) = 0.50p (Accumulated Fee so far = GHS 1.80). Only God knows what those represent. I assume they represent, ‘Fee for Sending’ and ‘Fee for Receiving’. I know my brother would pay a fee to withdraw this money from his card.  Absurdly, the machine indicated again, ‘’Transaction Successful, We Serve You Better’’. No problem, let’s go on.
Since I have more cash on my card from the ‘Online Auto Load’ transaction I made earlier, I decided to withdraw an extra GHS 230.00. You can’t believe this, I was charged GHS 1.15for that ‘Offline Cash Withdrawal.’ This withdrawal was my 18thtransaction since I reluctantly joined the ezwich system, so you can imagine how much I have paid as transaction cost. The fee charged on the cash withdrawal makes the total fee charged for the day, GHS 2.95.
When 10,000 people do this transaction or something similar, ezwich would accumulate an amount GHS 29,500 from transactional cost for that day. And when this happens at least once a week in the year, the figure would jump to GHS 1,534,000. This is exorbitant and it’s surprising that the low income earners like the National Service Personnel face these charges.
The Ghana Interbank Payment and Settlement System (GhIPSS) ltd (subsidiary of Bank of Ghana) which established and operates the ezwich system should do something about these expensive transactional charges.
These charges cause so much pain to people and create a bad name for the smart-card system. Many people I know vowed never to use this card as soon as they finish their National Service. Others say it is a useless smart-card system. Few of us that see the usefulness of this ezwich system think we are being robbed despite our meager incomes. It’s Pathetic. The inconsistency in the charges is unacceptable. This should be called E-WITCH instead of ezwich, so that we all know we are being hunted.

UT Bank is the 2nd to win the Bank of the Year award on the Ghana Stock Exchange


After a short time of operating as a commercial bank in Ghana, UT Bank breaks Ecobank Ghana’s monopoly and becomes the second bank listed on the Ghana Stock Exchange (GSE) to win the Bank of the Year category at the Ghana Banking Awards since 2001.
The Bank of the Year is an award
category that goes to the bank with the highest weighted scores for the customer survey, corporate social responsibility and financial performance. The race to the top in the
Banking industry has
been tough now that there are a lot of Banks in the system most of which are foreign banks with huge capitals. Since 2001, no bank listed on the Ghana Stock Exchange apart from Ecobank Ghana (EBG) and the most recent winner, UT Bank, has ever won this prestigious category.
CaptPrince Kofi
 Amoabeng
 (Rtd.)
[CEO – UTB]

There are six banks on the Ghana Stock Exchange operating in the country and they are CAL bank, Standard Chartered Bank (SCB), Ecobank Ghana, UT Bank (UTB) (2011 winner), HFC Bank and Ghana Commercial Bank (GCB). 

Ecobank Ghana has won this category more than any other bank and until recently was monopolizing this on the Ghana Stock Exchange. They still dominate since they won it in 2001, 2002, 2004, 2005 and 2006. The Trust Bank Ghana (TTB) won this category in 2007 and is now part of the Ecobank Group after the merger / acquisition by Ecobank Transnational Inc. (ETI) (the parent company of EBG).
The future really looks bright and going to be very competitive since EBG is expanding, GT bank (winner in 2009 and 2010) is getting innovative and UT Bank (winner 2011) has already met the minimum capital requirement by the Bank of Ghana through the huge capital injection by International Financial Corporation (a member of the World Bank group).
Long Live the Ghana Banking Awards.
Long Live the Banking Industry.
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Building the Economy: Middle Class of Ghana Unconcerned

Are we really sleeping? Then it is time to wake up.

The Middle Class in Ghana, simply don’t care. They find means to solve public problems in personal ways and just remain unconcerned, very quiet!! It’s a culture problem, people say. Others say Ghanaians just think about their families and not the Public. Scholars blame it on education, stating that, “you can’t teach an old dog new tricks”. But is this helping the nation? Would it ever? How can we develop with this? Why won’t us remain poor? Failed government or State, Failed Top Class, Now failing Middle class & educated elites, and the Voiceless/uneducated poor (which are the most populated).
We have the platforms, we don’t use them. We have the knowledge, we don’t apply it to help our nation, the worst of all, we sell them cheap to other nations. We have the energy, we misuse it. Oh Mother Ghana!!! How long would the Middle Class decide to be silent. It’s pathetic they understand the problems better than anyone but decide to stay away.
Typical Middle Class (educated elites) Behaviors:
Power outage:- Put on the generator (For the family alone) and shut up.
Water Problem:- Get enough Poly-tanks to store water for the family. Don’t care about the community or person next door (who’s probably voiceless).
Education:- Send children to schools abroad. (No Teachers’ strike).
Health:– Go to private hospitals. Don’t care if doctors are on strike.
Ehhhhh!!!! My people. Are we safe? When the Voiceless or low class decide to talk or fight back, can we stand them? Ghana, we can’t afford to fail God and the next Generation. Let’s act NOW in all sectors of the economy. Let’s be responsible and not think about our families alone. Let’s build the economy of Ghana.
Oh Ghana!!!!. God Help us. Long Live Ghana

Bank of Ghana vs. Onward Investment Limited, Power vs. Fraud?

 With a vision ‘to achieve a comparative advantage among leading investment companies…’ and a mission ‘to become an outstanding provider of legitimate investment services…’ Onward Investment Limited, an indigenous Ghanaian company with registration number CA-75,073 is experiencing the sanction of Bank of Ghana (BOG) as they operate without a license in the financial market.

BOG is making a relentless effort to protect ordinary investors in the system hence would stop any organization that flouts its regulations.
Onward Investment Limited has an aim to contribute to the economy by developing the Forex market through the offering of Forex training services and online forex trading for individuals in the country and even foreigners. But it’s very unfortunate on their part that the BOG had to put a hold on their operations and warn the public about them, on the basis of not having a license to receive deposits from the public. What is the point in trying to achieve those great visions without passing through the right processes?
How many of these unlicensed financial service providers are in the system? What is the Securities and Exchange Commission doing to protect investors? Why do companies refuse to get a license if that could boost their businesses? Are the licensing processes too rigid or demanding? These are questions the average investor is asking.  
On the part of Onward Investment ltd.; who are the owners? , what is their expertise? , what are their records and what are the clear benefits for the investment community. If potential partners and investors find it difficult to answer these questions then there is something wrong.
The only ‘known’ Board of Directors of this company includes; Lawrence Mensah, Mohammed B. Saleh , Kwesi T. Ababio and Simon Y. Nyarko.
We hope to know more about this company and the progress of their restriction by the Bank of Ghana.