Business News of 2014-07-07

GSE records gains in 2013

The Ghana Stock Exchange ended 2013 with no listing but recorded a high of 2,145.20 points, representing a gain of 78.81 per cent, compared to 23.81 per cent for 2012.

The financial stocks on the GSE index also gained 71.81 per cent in 2013, as against 20.48 per cent in 2012, growing on the back of a strong full-year results posted by many of the listed companies, as well as demand from institutional investors, particularly local 2nd tier private pension fund managers.

Chairman of the Council of the GSE, Dr Sam Mensah, at the annual general meeting of the GSE in Accra, said the volume and value of shares traded in 2013 were significantly up from the previous year.

Total trades in shares were 313.02 million, valued at GH¢465.14 million. The respective figures for 2012 were 218.19, valued at GH¢102.20 million. For listed debt securities, the value traded in 2013 was GH¢5,109.32 million.

Total market capitalisation and the domestic market capitalisation went up 6.8 per cent and 76.6 per cent respectively in 2013 to close at GH¢61.16 billion and GH¢11.69 billion.

Financial performance

The group (made up of the exchange and its wholly owned subsidiary- the GSE Securities Depository Company Ltd), for the financial year ending December 31, 2013, improved its surplus-after-tax to GH¢1,226,586 from the 2012 level of GH¢418,277. This was mainly on account of improved trading activities and greater cost control.

Facts behind figures

In 2013, eight companies appeared on the facts-behind-the-figures programme. They were CAL bank Limited, which appeared twice; Ecobank Transnational Incorporated; HFC Bank Limited; Produce Buying Company (PBC); Societe Generale Ghana limited; Standard Chartered Bank Ghana Limited; Tullow Oil Plc and UT bank Limited.

The facts-behind-the-figures programme provide listed company officials a platform to meet stockbrokers, the financial press and the investing public to shed more light on their operations.

Depository

Following mutual recognition of the benefits to the parent companies, the GSE and the Bank of Ghana (BoG) set up a technical committee to oversee the merger of their respective depositories- the GSE Securities Depository Company Ltd (GSD) and the Central Securities Depository (GH) Ltd (CSD).

A transaction advisor was appointed, and on December 24, 2013, an agreement was signed to merge the two depositories, effective January 2014.

The initial shareholding of the merged entity is 82 per cent for BoG and 18 per cent for Exchange, with an option to the Exchange to purchase an additional 12 per cent at the merger valuation by December 2014.

Liquidity

Measures instituted in 2010 such as the new minimum number of issued shares for listed securities, the insistence on the minimum public float of 25 per cent for new companies listing and the drive by the depository to get investors to dematerialise their share certificates continue to improve liquidity.