Investor appetite still high in the country — Rex Kontor
Investor appetite in the country remains high in spite of the current economic challenges, the Chief Executive Officer of Weston Oil and Gas Fund, Mr Rex Kontor, has said.
He noted that although liquidity in the system remained low, individuals were still interested in investing in areas where they could have good returns.
His comments came on the heels of the successful Eurobond the government raised at a much lower than anticipated coupon price from international investors.
Ghana sold a US$1billion Eurobond at a coupon rate of 8.125 per cent. Due to the high investor confidence in the country the bond was oversubscribed with orders of up to US$3 billion.
In an interview with the Daily Graphic, Mr Kontor said the successful Initial Public Offer (IPO) of the Weston Oil and Gas Fund, which closed on September 10, this year, was oversubscribed by 164 per cent above the industry regulator’s approved level as the company raised GH¢ 264,000 at 20Gp per share.
“We have experienced very good support, particularly from the retail market and I am pleased to report that we achieved a 164 per cent over subscription of the regulated target for the fund,” he said.
According to him, “That goes to demonstrate that investor appetite for mutual fund, particularly for a sector-focused mutual fund such as the Weston Oil and Gas Fund, is there and we got our judgement right”.
“We anticipated that it will be successful and we also anticipated that it will be oversubscribed. We see this mutual fund as a vehicle which could have mobilised more than a million Ghana cedis during the IPO period and the reason being that if we had institutional investors participating in the IPO, we could have easily mobilised a million.
Mr Kontor said he guessed the strategy, was to demonstrate that the ordinary Ghanaian had a vested interest in the oil and gas sector, especially in the wealth creating potential of that sector, adding that “this whole fund is about local content”.
Rationale for fund set-up
Explaining the rationale for the fund, he said it was geared towards the oil and gas sector because since the start of the production of oil in the country, the process had not had the kind of impact Ghanaians would have expected.
“The ordinary Ghanaian expected to see a change in his/her personal finances as a result of oil revenues being realised from the sector.” he said, but noted that “The reason that has not happened is that people have not invested directly into the sector and without investing in the sector you cannot get the needed returns.”