The continues drop in treasury bill rate may soon compel investors to look at other instruments with high yields such as bonds, that is the verdict from Executive Director, in Charge of Wealth Management at Standard Chartered(Stanchart) Bank Ghana, Setor Quashiga.
Treasury bill rates have dropped by about 50 percent since 2017.
Meanwhile, she explains that demand for bonds such as the Ghana Eurobond and the ESLA Bond have caused the returns on such instruments to increase.
Speaking to journalists, Setor Quashiga stated that Standard Chartered Bank is taking advantage of the trend to redirect investors fund to high yielding instruments.
She stated that Stanchart has designed products such as Wealth Lending, which can allow investors to borrow 50 percent of their investment in for example the Eurobond, for reinvestment in other secondary market securities.
“If for example you have invested 200,000 dollars in a Ghana Eurobond and you want to borrow against it, why not, we can give you up to 50 percent, that is 100,000 dollars at a rate up to 5 percent,” she stressed.
“You can then invest that money in some mutual fund and take monthly interest. You can even invest it in the ESLA bond where you can make some gains,” she added.
Madam Quashigah explained that with 18 percent interest on the ESLA bond, an investor could make a lot of returns on that bond.
Touching on the high demand for the Eurobond and ESLA bond, Madam Quashiga was optimistic the rate will hover around the current rate for some time.
“People have confidence in our market and that have pushed the prices of those bonds up,” she observed.
She stated that Stanchart after observing the trend, decided to come out with products that will help investors diversify their investment portfolio to make more profit.
“We have launched ‘Wealth Lending’ to give investors a variety of products. When it comes to investment, we provide our investors with advisors who measure the risk level of potential investors before they take a decision,” she said.
Source: Citi Business News