Accra (6th August 2013): NDK Asset Management, one of Ghana’s indigenous and largest institutional asset manager, announced today the launch of an aggregate bond index designed to provide information on secondary trading for publicly issued medium and long terms debt securities. The index aims to track the pricing trend of these securities to provide investors, fund managers, trustees and other stakeholders a benchmark for such investments.
The NDK Aggregate Bond Index (the “NDK-ABI”) is a broad based index maintained by NDK ASSET MANAGEMENT Limited in collaboration with the Central Securities Depository (CSD) and will be used to track investment grade bonds being traded in Ghana.
The NDK-ABI is a market capitalization-weighted index, meaning the securities in the index are weighted according to the market size of each bond type. The index is therefore not calculated by simply averaging the price movements of each bond, instead the calculation gives different emphasis or weighting to the different bonds. This weighting is based on the market capitalization of the bond, which is the price of the bond in relation to the volume of bonds in issue or the total market value of all the bonds that are on issue. The larger a particular bond’s market capitalization, the greater the effect a change in price of that security will have on the Index.
The NDK-ABI includes all publicly issued and actively trading Bonds and Notes till maturity while newly issued instruments are included on the day of issue. The index is computed daily with the available end of trading prices from the CSD or weighted average prices (in case of multiple trading of one paper).
All actively traded investment grade public bonds in Ghana are represented. The index includes and shall include (if available) all BOG – GOG Treasury securities, Government agency and municipal bonds, Mortgage-backed bonds, Corporate bonds, and Foreign bonds as well as Eurobond traded in Ghana. No private bond will be admitted on the Index. Securities represented on the NDK-ABI should be denominated in Ghana cedis (GHS) or convertible into GHS at the prevailing interbank exchange rate on the day of admission.
The aim of the Index is to serve as a benchmark for Pension Trustees, Fund Managers, and other stakeholders with respect to investments made in Bonds and Notes. The index will also help to create awareness about secondary trading of such instruments to the general public and ultimately improve liquidity on the market. The index has a long term goal of assisting various corporate entities to know the performance of the bond market in order to inform on decisions to raise debt capital from the market for their respective financial needs. Investors cannot invest directly into the index itself. It is expected that there will be a wide range of index and exchange-traded funds in future that will aim to track the Bond index.
Collins Appiah, Executive Director, Head of Asset Management at NDK Asset Management said; “The launch of the index is particularly crucial at this stage in the evolution of the Ghanaian financial market, especially as government is increasingly issuing bonds to raise much needed capital for infrastructural development. Additionally, pension trustees have been given the mandate under the pensions act to manage part of the pension scheme. The presence of the NDK-ABI will be a useful tool for the trustees to aid them benchmark their pension funds invested in Bonds and Notes.”
Senior Portfolio Manager at NDK Asset Management, Mr. John Ofosu Awuku added; “Our track record of exceptional fund management coupled with in-depth expertise in the Ghanaian Financial market has been made evident with the launch of this Index. This reiterates our commitment to provide exceptional support services critical to the investment decisions you make”.
Research Analyst at NDK Asset Management, Yaw Adu-Koranteng concluded that; “This bond index is the first of many innovations to be launched by NDK Asset Management in the Ghanaian investment terrain with the aim of bringing the financial market close to international standard”.
NDK Asset Management limited is a premier fund management and investment banking firm, specializing in Capital Market and Money Market Securities trading, Asset Management, Equity Market Research, Pension Advisory and Corporate Finance operations in the financial markets in Ghana, with its parent company, NDK Financial Services, specializing in Loans, Investments and Solutions.
NDK Asset Management was incorporated in 2010, with the main objective of serving as a one-stop-shop Investment house. Its hallmark is developing tailor-made investment solutions for investors at home and abroad and for individual or institutions alike.
NDK Asset Management strives to efficiently and effectively serve its clients by helping them grow their assets over the long term, build wealth based on their personal and corporate objectives, all while adding value through proactive asset management.