GSE rated high

The Ghana Stock Exchange (GSE) was rated as one of the high performing Exchanges in the world in the year under review.

"The Exchange last year grew by 47 percent in cedi terms and 32 percent in dollar terms due to good performance and increased in domestic retail activities, a number of economic and financial experts told the Ghana News Agency (GNA) Business Desk in Accra.

The Exchange established in 1991, has come through difficult years of just 10 listed companies to the current 23 dealing in mining, industry, breweries, manufacturing and banking.

Yoofi Grant, Executive Director of Databank Financial Services Limited said the GSE has come of age and with certain new developments now it is set to be one of the best performing in the world this year.

He said especially the recent cross-border listing of the Trust Bank Limited of The Gambia is a cardinal thing that puts the Exchange in a new realm altogether.

"This development is a good omen, sending signals to other countries that do not have Stock Exchanges that they can still trade and also heighten international interest in the GSE's potential of raising capital for development," he added.

Other financial experts and brokers who spoke to the GNA Business Desk described the market's performance in the year under review as significant in that the All-Share Index increased significantly from 955.95 percentage points from December 2001 to 1,395.31 points in December last year. This compares favourably with 2001's gain of 11.42 percent.

The gain in the index is currently above the prevailing annual interest equivalent on 91-day treasury bill of 26.63 per cent; it is also above the November 2002 12 month's inflation rate of 14 percent.

They commended the strong operating results by the listed companies and their resultant increase in share prices contributing to the market's return of 45.96 percent.

Giving a review of the GSE in the last year, Mr Ekow Afedzi, Manager Marketing, Research and Systems said the Exchange indeed recorded one of its best performances in 2002.

"Indeed it was the best since 1998 when the Exchange was listed as the best in Africa. "The market was bullish throughout the year with most of the listed companies recording positive price changes while the market itself was characterized by very high demand for listed securities and low quantities of offers," Mr Afedzi added.

Total market capitalization of listed equities at the end of December amounted to 6.183 billion cedis recording a 58.4 percent increase over the December 2001 capitalisation of 3.904 billion cedis

Afedzi attributed the increase in market capitalization to the two new listings recorded in the past year - Trust Bank Limited from The Gambia as well as price appreciations in almost all of the listed equities.

The top 10 gainers in the market last year were the Ghana Commercial Bank, Patterson Zochonis, Fan Milk Limited, Mechanical Lloyd Limited, SSB Bank and Ashanti Goldfields Company.

The rest are British American Tobacco, Enterprise Insurance Company and Unilever Ghana Limited. Afedzi said despite the positive gains and bullish market trend the market turnover of shares traded were below that for 2001.

"Volume of shares traded on the Exchange for 2002 was 44.12 million shares valued at 89,410.66 million cedis compared to the 55.30 million shares valued at 92,276.14 million respectively for 2001.

He commended government for introducing the government of Ghana Index-Linked Bonds, saying it fared quite well with a transaction of 20 billion cedis during the period under review.

He said the GSE is very committed to improving the efficiency of the market and professionalism in the industry. "By this we revised our securities courses in the last year and introduced eight new modules for participants."

Afedzi said the Exchange has great optimism for 2003. Consequently, its plans and strategies for the future are geared towards achieving targets that will serve as a pivot for capital mobilization.

He explained that the Exchange would also aggressively pursue listing programme intended to position the GSE as an attractive measure for domestic investors to raise capital.

"The idea is to let domestic investors know that the GSE is a good place to be. Hitherto, the big time players had always been foreigners, but now we want to bring in the domestic investors and increase liquidity at both individual and institutional levels," he added.

Another major move the Exchange would make, he noted, is "to seek funding for the automating and settlement project that has been on the drawing board at a long time. It could be a grant or through some form of private equity arrangement."

The World Bank earmarked 1.4 million dollars in 2000 for the automation project at the Exchange but the money could not be accessed because of the uncertainty that clouded the economy at the time.

The Exchange also aims at boosting the demand and supply of securities on the market and training of staff. "We will also create awareness and increase promotional activities to bring activities here to a larger number of people in the country."

On increasing the number of listed equities, Mr Afedzi said the Exchange is expected to be bigger this year and those following immediately. Government holdings in Coca Cola, Juapong Textiles Limited, Benso Oil Palm Plantation (BOPP), Barclays Bank Ghana, GAFCO, Tema Steel Works, Ghana Oil Palm Plantation, Twifo Oil Palm Plantation and the Ghana Textiles Printing Limited are to be off-loaded to the public through a vigorous divestiture programme already underway. The GSE, according to Mr Afedzi is developing guidelines to fast track the divestiture process.