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Business News of Monday, 25 April 2011

Source: Reuters

Ghana To Issue 3-Year Bond

The Bank of Ghana will issue a 3-year bond for 320 million cedis on April 27, open to foreign investors, the central bank said on Tuesday.

Ghana's cedi currency strengthened to 1.5075/1.5100 to the dollar after the announcement, compared to its opening level of 1.5115/1.5140, as traders anticipated dollar inflows from foreign investors interested in the bond.

"The underlying factors are that this afternoon the central bank authorized the issue of a three-year fixed rate bond," said Jacob Brobbey of Barclays Ghana. "The outlook will favour the cedi until the bond is over."

Dealers said the bond -- the third 3-year bond open to offshore investors since September 2010 -- could push the cedi to a near three-week high of 1.50 to the dollar in coming days.

"The market will expect some offshore purchases of cedis to purchase these bonds. There will be huge offshore demand on the day of the issuance. We see it breaking into 1.49 levels,' said Chris Nettey from Stanbic Bank.

Biggles Amponsah from Access Bank said he expected "about $100 million in inflows" for the bond. Ghana is the world's second-largest cocoa producer and Africa's newest commercial oil producer.

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