Business News of 2013-12-31

Central Securities Depository to start operations next year

The Central Securities Depository Ghana (CSD) and the GSE Securities Depository Company Limited (GSD) have been merged into one entity to be known as the Central Securities Depository Ghana Limited.

Per the merger, the Bank of Ghana will own 82 per cent of the new company and transfer the remaining 18 per cent to the Ghana Stock Exchange (GSE).

The merger will provide a more efficient trading of fixed income and securities and reduce operational cost for the merged depository and lower transaction cost for market participants.

Again, investors will maintain only one account for their investment portfolio while the resources of the shareholders (Bank of Ghana and GSE) will be pooled together to build a state-of-the-art infrastructure to modernise the operations of the depository.

Speaking at the signing of the merger agreement in Accra, the Governor of the Bank of Ghana, Dr Henry Wampah, said the merged entity would handle all securities listed on the GSE as well as Government of Ghana and Bank and would operate share registration services under license granted by the Securities and Exchange Commission (SEC).

According to him, as at the close of business on Tuesday, December 23, 2013, a total of 75,978 securities accounts had been opened in the GSD and 76.25 per cent of listed companies securities had been dematerialised into the GSD system.

“We cannot discount the role of this in the improvement of trading volumes and values on the Ghana Stock Exchange and its eventual contribution to the 2013 GSE Composite Index growth of 78.23%, the highest among African securities exchanges in 2013,” he said.

Dr Wampah also used the occasion to commend the executives of the two entities as well as other people who worked tirelessly to ensure the measure was a success.

The Chairman of the GSD board, Mr Franklin Asafo-Adei, for his part, said the merger would provide a common depository platform for the two institutions and harmonise trading as well as clearing and settlement practices.

“This will generate benefits and thus create significant additional value for all market participants,” he said.

The merger will make for a more efficient trading of fixed income and equity securities and reduce operational cost for the merged depository and lower transaction cost for market participants.

Mr Asafo-Adei said 76 per cent share certificates had been dematerialised and 75,978 securities accounts had been opened, enhancing trading volumes and values.