Sirius Opportunity Fund records 74.71% growth

Revenues of the Sirius Opportunity Fund (SOF), an open-ended money market mutual fund, rose to GH¢419,167 in December 2016 after ending 2015 at GH¢239,927.

This represented a 74.71 per cent rise within the 12-month period.

At the company’s fourth Annual General Meeting (AGM) in Accra, the Chief Executive Officer (CEO) of Sirius Capital Limited, Mr Franklin Benefo, said although 2016 was characterised by challenges in the general economy, the fund continued to perform incredibly well, closing the year with an impressive out-turn.

The fund’s assets also rose to GH¢2.2million, representing about 60 per cent growth over the 2015 financial year.

He observed that the net asset value (NAV) per share of the fund recorded a positive return of 24.09 per cent compared to the benchmark rate for the 91-day treasury bill which averaged 16.43 per cent.

Market review

Rates and patronage in treasury securities broadly declined this year as the government reduced its public sector borrowing requirements on the money market.
Interest rates on the 91-day bills and the one-day note also dipped to 18.50 per cent, 18.50 per cent and 21.50 per cent respectively at the end of the fourth quarter of 2016.

Similarly, the inter-bank weighted average rate declined by 25.00 basis points to 25.26 per cent during the fourth quarter.

The fund’s benchmark, that is the one-year T-bill, started the year at 22.79 per cent and fluctuated in the 20th percentile range for the most part of the year and dropped sharply to a year low of 16.43 per cent in December 2016.

Interest rate on medium-term assets showed a mixed trend. Whereas the rate on the two-year instrument reduced to 22.50 per cent at the end of the fourth quarter of 2016, rates on three-year instrument and five-year bond remained unchanged at 24.00 per cent and 24.75 per cent respectively.

It is expected that growth in the advanced and advancing economics will pick up pace in 2017 on the back of expected tax cuts and increased infrastructure spending.
The CEO said this fiscal stimulus would boost trade in the Euro area and the ripple effects will further strengthen recovery efforts in Ghana.

He stated that growth in emerging economies such as Ghana was therefore expected to pick up in 2017 driven mainly by the recovery in commodity prices, sustained growth and a pick-up in global trade.

“In addition, exports may decline if the United States goes ahead with protectionist trade policies. Tighter immigration policies in this region may also reduce remittance flows to the country.”

Again, he said the economic activity was expected to strengthen in 2017 on the back of gradual rebound in credit extension to the private sector and improvement in the macro fundamentals in Ghana.

But, he stressed that the major risks to the growth outlook included volatile commodity prices and high utility costs.

Outlook

Going forward, Mr Benefo said the fund would look at minimising risks and investing in high-yielding, medium to long-term securities that would offer the best returns to clients.

“In view of these expected development, Sirius Opportunity Fund had positioned itself to take advantage of the positive bounce in economic trade to maximise the returns of shareholders by channelling a higher percentage of our focus to institutional funds.”

He explained that this would be done through targeting placements, active advertisements, promotions and the organisation of specific programmes that would help attract new individual clients.

Again, with expected decline in the treasury bills and inflationary rates, he said SOF was poised to take advantage of the stabilising financial arena and capitalise on the fund’s performance to encourage clients to increase their investment.

“We are expecting 2017 to be a very profitable year for our shareholders and we are ready to work effectively to deliver on your expectations,” he added. —GB