Bonds, not equities, are the best investment options in emerging markets such as Ghana in 2019, as they offer investors cash or near cash options to fall on quickly, Standard Chartered Bank’s Wealth Management Advisory Outlook for 2019 has said.
“We are more optimistic about bonds heading into 2019 than we were at the start of 2018, and expect them to deliver positive returns. Emerging markets bonds are expected to outperform development market bonds,” said Setor Quashigah, Head-Wealth Management at Standard Chartered Bank.
“We have amazing bonds with interest rates that are very attractive, and so if you have idle forex or local currency, it is time to buy a Ghana Eurobond because the projections are that emerging market bonds like Ghana are more attractive and we have sovereign backing of these bonds,” she added at a press briefing on the bank’s 2019 global outlook and its wealth offerings in Accra.
With yields on Ghana’s six Eurobonds, which are dollar-denominated, currently offering 5.87 percent to 9.39 percent, while the local equity market’s year-to-date return is -3.33percent, Ms. Quashigah believes bonds are the way to go in 2019.
“It is perfect at this point to invest in bonds, including US dollar-denominated bonds. Why keep your dollars in a deposit account which earns nothing when you can sit here in Ghana and invest in these bonds? We would rather be heavy on bonds because they are safer and easier to get out,” she said.
Apart from the dollar-denominated bonds, she also touted the benefits of the cedi-denominated ESLA bonds, which were sold at coupon rates of 19 percent for the seven-year paper and 19.5 percent for the 10-year paper but are currently trading on the secondary market at 19.3 percent and 20.6 percent respectively.
“Cedi-denominated bonds like the ESLA bond are very good and viable corporate bonds,” she said while urging investors to trust Standard Chartered Bank’s extensive wealth products to drive value on their investments.
“We continue to focus on establishing our leadership in advisory services and delivering solutions that meet the growing needs of our clients. Digitisation is at the heart of our client proposition, and the end-to-end experience will remain a key priority to enable us drive more tailored engagement from advisory through to service,” she said.
She touted products such as advisory services on the bank’s investment outlook, managed investments, mutual funds, forex, bancassurance, wealth lending/credit solutions and digitisation.