Chief Executive Officer of Republic Investments (Ghana) Limited, Madeline Nettey, has stated that the confidence shown by unit-holders of the respective funds managed by the investment house has been key to the resilience demonstrated in the face of the impact of the financial sector reforms as well as COVID-19.
She expressed a firm belief that the experience of her outfit is a microcosm of the financial space and is indicative of growing sentiments towards the wider financial sector.
Speaking to the B&FT on the sidelines during the Republic Investments’ Annual General Meeting, she admitted that the funds managed by her firm have been impacted by recent events, which have necessitated an adjustment of forecasts and strategies.
“For 2020, we can see that the strategy at the beginning of the year has had to be recalibrated several times based on developments emanating from the COVID-19 pandemic. We were all anticipating that COVID-19 would’ve left earlier as opposed to what we are currently experiencing.
It has dragged a bit longer and has affected investor confidence, interest as well as access to available capital to invest. That has, in a way, adversely impacted our projected growth for the fund. If we look at the stock market also, the performance hasn’t been as expected. We were hoping for a bit more recovery from the bearish performances it has recorded over the past two years.
Look at some reforms that had to come in at the beginning of the year, where listed equities were asked to hold on with dividend payments among others. This is typically the time that one would find interest in the stock market but once the announcement was made, we realised that investors pulled back a bit and that has adversely impacted the stock market.
“The situation may not be as vibrant as it’s been in other countries, particularly, because of the aftermath of the clean up from last year, which we were expecting to be corrected gradually this year. Unfortunately, COVID-19 came in the first quarter of the year. As a result, that lag will persist for a while; we are not anticipating a lot of growth in the investment sector,” she explained.
Nevertheless, she observed that whilst the Funds have not witnessed a significant appreciation of Net Asset Value (NAV), as has been witnessed by a significant number of Funds in countries such as Canada and Nigeria, there have been no significant redemption requests, contrary to projections made when the pandemic broke out in the country. This, she attributed to investor confidence in the financial sector in general and her firm, in particular.
“Typically, in Ghana, our people have historically looked at the returns, ‘what am I getting for my money?’ nonetheless, looking at the events of last year, you realise that people are now more interested in the security of their funds and dealing with credible institutions, and that is where we present a very strong brand.
“Investors are beginning to understand that despite some negative aspects of the reforms that happened last year, the positive side is that the financial sector has become more robust.
“We have not had much redemption requests; the situation hasn’t excessively changed from what it was in the previous year. And we have always maintained a good level of liquidity to settle requests promptly; this has helped build trust in our operations over time. This has boosted investor confidence, which has served us well in this turbulent season,” she added.
Whilst touting the goodwill enjoyed by her investment house as a result of strong performances and same-day redemption request payments, she revealed that the rest of the year would not be used to pursue aggressive growth but the stability of the Funds.