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Opportunities in the Ghanaian Asset Management Industry
As an epilogue to my earlier article on understanding the 2019 asset management crises in Ghana, I’ve decided to share the opportunities that exist for asset management companies and the industry as a whole to enable players within the industry position themselves to unleash hidden value. The nascent asset management industry in Ghana is very linear with clearly defined revenue streams and formidable vertical competitors (Commercial Banks & Fintech’s)....
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Understanding the 2019 Asset Management Crises in Ghana and the Future Opportunities
In November 2019, the securities and exchange commission (SEC) revoked the licenses of 53 fund management companies in pursuant to Section 122 (2) of the Securities Industry Act, 2016 (Act 929). SEC’s announcement attributed the revocation of the licenses to the failure of these fund management companies to return clients funds. As a professional who lived and observed events as they unfolded, I think I owe the system a great...
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Unraveling Value: A Case for Restructuring Ecobank Group (ETI) to Unleash True Value
Summary: ETI’s share price has returned a disappointing -262.5% to shareholders since its listing by introduction in 2006 (2006: GHS 0.29p; 2020: GHS 0.08p) at its current market capitalisation of GHS 1.92B (USD 334.85M). Astonishingly, the Group’s Ghanaian subsidiary which represents 7.19% of the Group’s operating assets, commands an enviable market capitalisation of GHS 2.32B (USD 403 M) representing a total return of 1,209.5%. This article seeks to analyse the...
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Bargain Hunting - A Compelling Case for Purchase of Cal Bank Shares
Summary Cal Bank shares currently sell at GHS 0.69, which represents a Price to book ratio of 0.4x meaning the Bank is selling for less than half its book value or actual net worth. In theoretical sense buying Cal Bank at a price of GHS 432.34 million or GHS 0.69 per share is like buying the company at a significant discount of over 58% to its book value. At...
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Evolution and Growth of Mutual Funds in Ghana
Collective investment schemes (CISs) have grown in popularity and attention over the last 30 years and this trend is expected to continue tremendously. At the end of 2020, the world’s mutual fund industry had US$ 63.1trillion in total net assets (Investment Company Fact Book, 2020), a significant growth from US$ 24.7 trillion in 2010. The United States and Europe are the largest regulated fund markets with 29.3% and 21.8% respectively... Read more
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SOGEGH: Earnings up on better asset quality and lower cost of risk
The revenue of Societe Generale Ghana Plc (SOGEGH) grew by 10.6%y/y (versus 25.0%y/y in 2019) to GHS686.04 million in FY2020. Revenue was mainly driven by 14.4%y/y rise in interest income to GHS519.46 million despite a 3.1%y/y contraction in the loan book to GHS2.56 billion as the bank tightened its credit conditions in the midst of the coronavirus pandemic. The bank ramped up its holdings of risks free government securities (debt...
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Ecobank Ghana posts 23.6%y/y rise in net earnings in 2020
Ecobank Ghana has reported robust PAT growth of 23.6%y/y to GHS549.87 million in FY2020 from GHS444.95 million in the previous year despite higher cost-to-income ratio. Earnings were mainly driven by sustained revenue growth and lower cost of risk in 2020. Gross revenue grew by 15.7%y/y to GHS2.09 billion in FY2020 on the back of recovery in business and consumer confidence in that second half of year to boost banking... Read more
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BOPP’s earnings continue to benefit from higher CPO prices
Benso Oil Palm Plantation (BOPP) has reported a topline growth of 29.5%y/y (vs. 20.9%y/y in FY2019) to GHS123.82 million in FY2020 on the back of higher palm oil prices emanating from increased demand from China and India as well as production squeeze arising from labor shortages in key producing countries in the midst of the covid-19 pandemic. Commodity data from the World Bank shows that the price of Crude Palm...
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Why Unilever’s topline recovery failed to translate into earnings
The consistent improvement in consumer confidence in the second half of 2020 helped to boost Unilever’s revenue by 36.9%y/y to GHS456.28 million in FY2020 from GHS333.29 million in FY2019. This was a remarkable performance especially given that the company’s revenue was down in Q3-2020. The recovery in revenue enabled Unilever to post a gross profit of GHS78.67 million FY2020 from a gross loss of GHS15.39 million a year ago. ...
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Why Fan Milk posted its worst ever earnings in 2020
Although there was improved demand for Fan Milk’s products in the final quarter of the year as consumer confidence recover, overall revenue for 2020 dropped by 12.0%y/y to GHS373.58 million. This was attributable to unfavorable performance in the earlier part of the year as a result of the coronavirus pandemic, which significantly limited the movement of people including the company’s sales boys who use bicycles to penetrate communities and local...
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Benso Oil Palm profit jumps on higher commodity prices
The revenue of Benso Oil Palm Plantation (BOPP) rose by 14.1%y/y to GHS89.67 million for the first nine months of 2020 (9M-2020), driven by 37.%y/y rise in the price of Crude Palm Oil to USD798.12 per MT in September 2020. The price Palm Kernel Oil also increased by 25.1%y/y to USD767.14 per MT in September, according to data from the World Bank. The company’s margins were also buoyed...
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What is BoG’s Priority: Controlling Inflation or Driving Economic Activity?
Ghana’s inflation moved up by 90bps to a 14-month high of 10.6% in September 2021 from 9.8% in the previous month on the back of higher food and petroleum prices during the period under consideration. Ghana’s food inflation heightened from 10.9% in the August to 11.5% in September as food prices increase during the harvest season. Further, non-food inflation rose by 120bps to 9.9% in September because of higher crude...
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Why the drop in inflation to a historical low of 7.5% is unlikely to boost credit demand
Consumer inflation has dropped further by 100bps to a historical low of 7.5% in May 2021 from 8.5% in the previous month. Inflation is now below the midpoint of the central bank’s target range of 6-10% for the first time in history. This was driven by base effects and slowdown in imported inflation arising from the relative stability of the local currency during the period. The low inflation (coupled with...
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Views From SIC Brokerage: How High Will Markets Go?
Buoyed by a rally in MTNGH, the Ghanaian equity market advanced to a 31.93% year-to-date return at the end of April 2021. The surge in prices of eleven other stocks in the banking, petroleum marketing, insurance and beverage sectors has sparked interest in the equities market and led to questions of how high the benchmark index can go this year. We believe equities are still underpriced amid steep discounts to...
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GDP growth drops to 37-year low in 2020, but there is hope in 2021
Ghana’s economic growth dropped to a 37-year low of 0.4% in 2020 from 6.5% in 2019 as the coronavirus pandemic adversely affected economic activity. The pandemic affected domestic economic activity and consumption as well as international trade. However, the government’s strong investment in agriculture, which grew by 7.4% in 2020, via its flagship programs such as Planting for Food and Jobs helped to cushion the economy against the pandemic. This...
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Downward trend in inflation could trigger policy rate cut in 1H-21
Ghana’s inflation has decelerated quickly to 9.9%, which is within the central bank’s target range of 6-10%, in January 2021 on the back of slowdown in the growth of food prices. Food inflation dropped by 130bps to 12.8% in January 2021 from 14.1% in the previous month. However, non-food inflation remained unchanged at 7.7% in January 2021, partly due to the stability of the GHS against the USD in January,...
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MPC likely to hold policy rate as inflation heightens
Ghana’s consumer inflation rose by 60bps to 10.4% in December 2020 from 9.8% in the previous month in line with our expectations, which were expressed in the November inflation note. Inflation was driven by increased spending in the run-up to the December 2020 elections and the festive period. Moreover, some retailers who took advantage of the increased demand to hike prices of their goods and services. The rising influence of...
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Is BOPP the best dividend stock now?
Benso Oil Palm Plantation (BOPP) is quickly emerging as a dividend stock that could now be coveted by dividend loving investors and income funds. The company has announced about 399%y/y jump in dividend to GHS1.0623 per share in respect of the 2021 financial year, buoyed by 274.2%y/y surge in earnings to GHS92.41 million in FY2021. BOPP has benefited greatly from significant rise in global Crude Palm Oil (CPO) price in... Read more
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Standard Chartered Bank to pay dividend next month
Standard Chartered Bank has announced a final dividend of GHS1.74 per share (11.5%y/y growth) in respect of the 2020 financial year. This was driven the bank’s robust financial results that saw net earnings jump by nearly 70%y/y to GHS478.30 million in FY2020. However, the bank’s payout ratio has dropped to 49%, the lowest in the last three years. Please see the details below. Final Dividend SCB announces that the Company’s... Read more
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Can GCB Bank achieve a super-safe dividend stock status?
GCB Bank has carved a reputation for consistently paying dividend to shareholders since Doobia.com started tracking dividend data in 2007. The recent declaration of a dividend in respect of the 2020 financial year means that the bank has paid divided for 14 consecutive years, even during the banking sector recapitalisation and coronavirus periods when several competitors failed to pay dividends. GCB Bank has proved to be a safe dividend stock,... Read more
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Cal Bank’s attractive dividend yield could boost portfolio returns
Cal Bank is set to pay dividend for the third consecutive year following a 23.3%y/y growth in net earnings to GHS213.80 million in FY2020. The bank is quickly developing a reputation as a dividend paying stock having paid dividends in 12 out of the last 14 years. The recent dividend of GHS0.11 per share in respect of the 2020 financial year reflects 23.6%y/y growth compared to the dividend of GHS0.089...
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TOTAL’s dividend would be a welcome relief to shareholders
Total Petroleum has announced an interim dividend of GHS0.0694 per share for the 2020 financial year ending December 31, 2020. And based on the company’s corporate practices in the last decade, it is likely to declare a final dividend in respect of the 2020 financial year later in 2021. The interim dividend would result in a dividend yield of 3.0% given the company’s prevailing market valuation of GHS2.35 per...
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GGBL to pay dividend this year despite earnings contraction
GGBL has declared a dividend for the third consecutive year in respect of the 2020 financial year. However, the dividend per share of GHS0.0138 is 52.9% lower than the dividend of GHS0.0293 declared in the previous year. The lower dividend was driven by a contraction in earnings by 32.6%y/y to GHS12.16 million in 2020 from GHS18.05 million in 2019. The company is expected to pay a total dividend of...
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Focus on Data and Mobile Money to Accelerate Growth of MTNGH - SIC Brokerage
We revise our HOLD recommendation for MTNGH to a BUY while revising our target price to GH¢1.10 from the current price of GH¢0.85 per share, representing an upside of 29.41%. We’re bullish on the economic recovery and the long term growth of MTNGH as it focuses more on data and mobile money. Results Summary Service revenue was up by 16.4% to GH¢5,992 million, led by an 8.1% YoY growth in...
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CAL Brokers initiates coverage of GGBL with a BUY recommendation
We initiate coverage of Guinness Ghana Brewery Limited (GSE:GGBL) With a BUY recommendation based on a price target of GHS2.70 per share, with reference from the current market price of GHS2.20, translating into capital appreciation of 22.73%.
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CAL Brokers continues coverage of TOTAL with a BUY recommendation, projects 56% return
The equity market return has been sluggish on a YTD basis, however, a number of opportunities have started emerging that offer investors the chance to make significant capital gains on the market. CalBrokers research identified that TOTAL's sh
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Bullion Securities initiates coverage of Republic Bank with a BUY recommendation
Republic Bank Ghana retraced its step into profitability by posting PAT growth of 95.64% Y/O/Y following two consecutive years of making losses. The turnaround in FY 2017 was mainly due to non-impairments on financial assets and loan recoverie Read more
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CAL Brokers maintains BUY recommendation on Unilever
We maintain a BUY recommendation on Unilever Ghana at a revised price target of GHS 22.79p from the current market price of GHS17.78, after assessment of their third quarter earnings report. Our valuation is derived from forward PE, PS and PB
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Why CAL Brokers initiated coverage of GOIL with a BUY recommendation
CAL Brokers has initiated coverage of Ghana Oil Limited (GOIL:GSE) with a BUY recommendation based on a price target of GHS 3.20p, from the current market price of GHS 2.60, which reflects potential price appreciation of 22.68%. In addition, CAL Brokers expects dividend yield
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Anita's Epistles
Evolution and Growth of Mutual Funds in Ghana
Collective investment schemes (CISs) have grown in popularity and attention over the last 30 years and this trend is expected to continue tremendously. At the end of 2020, the world’s mutual fund industry had US$ 63.1trillion in total net assets (Investment Company Fact Book, 2020), a significant growth from US$ 24.7 trillion in 2010. The United States and Europe are the largest regulated fund markets with 29.3% and 21.8% respectively...
Anita's Epistles Evolution and Growth of Mutual Funds in Ghana
Dividend Watch Is BOPP the best dividend stock now?
Macro-Watch What is BoG’s Priority: Controlling Inflation or Driving Economic Activity?
Boakye's Corner Opportunities in the Ghanaian Asset Management Industry
Stock Ideas Focus on Data and Mobile Money to Accelerate Growth of MTNGH - SIC Brokerage
Earnings Update SOGEGH: Earnings up on better asset quality and lower cost of risk