Investing in Bonds (PART 2).
Based on the issuer, there are four main categories of bonds issued to investors.
? Corporate bonds: These are bonds issued by corporate institutions to raise capital for their operations. Some corporate institutions tend to
the corporate bond market to raise capital instead of accessing bank loans. Corporate bond market offer favourable terms and lower
interest rate. Some corporate bonds on the Ghana Fixed Income Market include Edendale Properties Plc, Bayport Savings and Loans and Produce Buying Company.
? Municipal bonds are bonds issued by municipal authorities. Municipal bonds are common developed financial markets. There are plans for
Metropolitans, Municipalities and District Assemblies (MMDA’s) in Ghana to raise capital for development projects through municipal bonds issuance.
? Government bonds are categories of bonds issued by a government treasury. Bonds issued by government with less than 1-year to maturity are called “treasury bills”, while bonds with maturities between a year and two years to maturity are called “notes” and government of Ghana bonds with maturity greater than two years are called “bonds”
? Statutory agency bonds are bonds issued by a quasi-government organization. Ghana Cocobod issues “cocoa bills” to finance cocoa
purchases. Energy Sector Levy Act (ESLA) issues long - term bonds to resolve energy sector debts Bonds come in different varieties. Zero- coupon bonds do not pay coupon payments and are as such issued at discount to their face value. Investors are paid the face upon maturity. The 91-Day, 182-Day and 1-year government of Ghana treasury securities are examples of zero coupon bonds. Convertible bonds are bonds which has the option of converting to equity at some point. Callable bonds are bonds which gives the issuer the option to call back the bonds before maturity.
Last w eek This w eek w -o-w Ch. w -o-w %Ch. YTD% 12-Month%
GSE-CI 1,861.24 1,862.77 1.53 0.08% -17.47% -11.93%
GSE-FI 1,722.38 1,725.21 2.83 0.16% -14.58% -10.83%
Market Cap, GHS'mn 52,551.92 52,567.82 15.90 0.03% -7.44% -6.83%
Volume traded 30,693,707 32,772,544 2,078,837 6.77%
Value traded 17,523,061 19,513,304 1,990,243 11.36%
Ghana Cedi Performance
USD:GHS 5.671 5.678 (0.007) -0.12% -2.67% -7.44%
EUR:GHS 6.479 6.606 (0.127) -1.96% -6.90% -11.18%
GBP:GHS 7.115 7.259 (0.144) -2.03% 0.15% -9.57%
91-Day bill 13.87 13.37 (0.50)
182-Day bil 14.06 14.05 (0.01)
364-Day Bill 16.92 16.82 (0.10)
2-Year Note 20.20 20.20 -
3-Year Fixed Bond 18.85 18.85 -
6-Year Fixed Bond 19.50 19.50 -
* Excludes AGA, GSR & Tullow Sources: BoG, GSE, Doobia
0% 1% 1% 2% 2%
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