GSE impact seen in GH¢26bn capital raise, GH¢750bn traded securities

Isaac AIDOO in Accra, Ghana

SINCE its establishment some 33 years ago, the Ghana Stock Exchange (GSE) has created three markets valued at GH¢356 billion and enabled listed companies to raise over GH¢26 billion in long-term capital across those markets. 

They comprise the Main Market, the Ghana Alternative Market (GAX) and the Ghana Fixed Income Market (GFIM) with 45 issuers and 240 listed securities.

The GSE disclosed that listed companies had raised GH¢6 billion in equity and GH¢20 billion in debt over the period. 

Speaking at the GSE’s 33rd anniversary Ring the Bell Ceremony in Accra, Abena Amoah, managing director of the Exchange, disclosed that, “over GH750 billion worth of securities have traded on our markets, with our fixed income market dominating this liquidity.”

The theme for the occasion was ‘Resilience and adaptability: Thriving in Challenging Times.’

52 brokerage firms licensed 

From three brokerage firms at the time of its establishment, the GSE has now licensed 52 companies to trade across the markets.

There are 1.4 million securities accounts in the CSD, with many more Ghanaians investing through collective investment schemes.

Amoah disclosed that the Exchange had successfully trained over 70,000 people through its securities and investment education courses.

According to the GSE managing director, the past 12 to 18 months had tested “our collective resilience like never before. Our macroeconomic challenges, the DDEP and global developments have impacted our issuers, intermediaries and investors alike.”

GSE Composite and Financial Stock Indices improve 

She indicated that a bright light in 2023 was the performance of the GSE Composite and Financial Stock Indices.

“I’m happy to share that our Composite Index is up 30.75 percent as of yesterday, making us third best in Africa so far this year, whilst our FSI continues to improve as well. We ended the year 2022 with a YTD return of -12.38 percent and -4.61 percent for the Composite Index and Financial Stock Index, respectively,” Amoah stated. 

65% drop in volumes, values traded

The macro-economic challenges had resulted in volumes and values trading significantly lower in 2023 compared to 2022. The CEO of the GSE revealed that 69 billion securities had been traded in 2023 compared to  196 billion in the same period in 2022 on the GFIM; and 424 million versus 1.3 billion on the equities market.

Exchange promises more, inspires investors 

The GSE says it is ready to unveil an array of products and initiatives to diversify investment avenues, embolden investors, and invigorate the market’s vibrancy.

The products and initiatives include commercial paper market; over the counter market; Securities Lending and Borrowing; Asset-backed Securities (ETFs); Margin Trading; Market Making; and Underwriting and Issuing House Rules. 

Amoah encouraged regulatory bodies to adopt agile frameworks that facilitate innovation, market stability, and investor protection, as the GSE launches new products and initiatives. 

She disclosed that the Exchange had engaged over 50 companies in the private sector through direct interactions and their umbrella associations to screen those who had the potential for listing and developing a pipeline of potential issuers.

“Our engagement with State Interest Governance Authority has continued in earnest to get some SOEs listed and we are optimistic that a few of them will list in 2024,” the MD said.

SEC on financial literacy for Ghanaians 

Daniel Ogbarmey Tetteh, director general of the Securities and Exchange Commission (SEC), in his address, encouraged all the market operators, especially brokers and fund managers to invest time and resources to help close the financial literacy gap, lamenting that “a lot of people are held hostage by myths, misconceptions and in some cases, patent lies on financial matters.

“It is conceivable that financial decisions based on such myths or misconceptions would, in the face of adverse circumstances, crumble like a pack of cards,” the SEC boss stated. 

He cautioned the investing public to also assume the responsibility for increasing their financial literacy by taking more interest in opportunities to learn about the financial markets and products as well as ask questions of financial service providers and seek clarity and confirmation from the regulator.

SEC on resilience of market operators, investors

Speaking to the theme, Tetteh maintained that in the dynamic landscape of the capital market, brokers, dealers and issuing houses emerged as linchpins of resilience and adaptability.

“Beyond their conventional roles in transactions, these entities act as architects of financial fortitude, fostering economic growth by encouraging diverse entities to enter the market and raise capital,” he maintained. 

Tetteh advised that the expertise of  brokers, dealers and issuing houses in underwriting and advisory services should form the bedrock for new issuers navigating the complex financial terrain. 

He added that brokers and issuing houses should serve as educators, imparting valuable market insights to investors and contributing significantly to enhancing financial literacy.