Some financial institutions are hopeful of gains from the capital market should government reduce its borrowing from banks.

The institutions believe that the excessive borrowing by government crowds out the private sector and renders them uncompetitive. The NPP government has often hinted of creating an avenue for the private sector to flourish thus avoid competing with them.

In an interview with Citi Business News, Chairman of the CDH Balanced Fund Ltd, Emmanuel Adu-Sarkodee said government can only stabilize the private sector if they spend within their means.

“What I think will happen is eventually, things will stabilise so that you can have value for money based on how long you are investing. I mean basically, this is more into government policies. If they decide to spend within their means and stay focused. It’s about spending what you have,” he said.

He warned that “This excessive borrowing and trying to crowd out the private sector out of the market, if they don’t do that then I think interest rate will come down but if they borrow excessively, then obviously it will keep rising”.

Mr Adu-Sarkodee spoke to Citi Business News on the sidelines of the 2nd Annual General Meeting of the Fund. The Fund recorded a return of 32.96% in 2016 compared with an annualised return of 30.68% in 2015.

Funds under management also grew by 73% and increased its funds under management from GHc1.09 million to GHc1.90million. Fund Manager and Executive Director, Seth Ayitey assured to diversify into more equities, pick up bargain buys that pay dividends and are expected to post significant capital gains.

Source: citibusinessnews