Ghana Commercial Rises Most in More Than a Week on Buying Bets

By Jason McLure

(Bloomberg) — Ghana Commercial Bank Ltd. rose the most in more than a week, on bets a local institution bought shares in the West African nation’s biggest bank by assets.

The stock climbed 9 pesewas, or 3.6 percent, to 2.60 cedis by the 1 p.m. close in Accra. A single trade of 100,000 shares accounted for 97 percent of volumes traded today.

A local investment house purchased the shares from a foreign investment company, said Jeff Foli, a broker in the Accra office of IC Securities Ghana Ltd. He declined to provide further detail on the buyer and seller.

“The trend is generally foreign institutions buying from a local institution,” he said in a phone interview today. “For a local institution to be looking for stock just gives you the picture that there is growing interest here.”

Shares in Ghana Commercial Bank have more than tripled this year as investors have been bullish that the government will repay about 500 million cedis ($338 million) in outstanding debt from the state-owned Tema Oil Refinery Ltd., Foli said.

The appointment of a new managing director in March and the bank’s potential to capitalize on financing opportunities in Ghana’s emerging oil and gas industry have also fuelled interest in the shares, said Foli, who has a “buy” rating on the stock.

On Dec. 15, Ghana began pumping oil from its offshore Jubilee field, which holds an estimated 800 million barrels of the commodity.

Government Bond Sale

In March, Ghana’s finance ministry announced it would sell bonds to clear 445 million cedis in debt from the refinery with Ghana Commercial. In November, the finance ministry proposed increasing the fuel tax in Ghana 300 percent to raise additional funds for the refinery’s debts.

It is unclear whether revenue from the new tax would be used to repay the oil refinery’s remaining debts with Ghana Commercial or pay interest to government bondholders, Foli said.

The bank’s two largest shareholders are Ghana’s Social Security and National Insurance Trust and the finance ministry, which together control 51 percent of its shares, according to the bank’s 2009 annual report.

–Editors: Ana Monteiro, Gordon Bell.