GSE to promote cross border alliances

The Ghana Stock Exchange (GSE) is to promote cross-border alliances with two sub-regional exchanges as part of a five-year strategic plan to help boost trading activities.

The Exchange Board Chairman, Mr William Panford Bray told the annual general meeting of the governing council that the Exchange would forge partnership with the Bourse Regionale des Valeurs Mobilieres and the Nigerian Stock Exchange in line with moves towards ECOWAS integration.

He said as part of its short-term plans the Exchange would liase with the Ministry of Finance and the Divestiture Implementation Committee to channel the state divestiture process through the exchange.

The Exchange, he said, would also step up its promotion activities to prospective listed companies with a view to achieving a critical mass of listed securities. '

'The current number of listed equities remained very low''.

There are currently 22 listed equities on the bourse, following the voluntary de-listing of UTC Estates from the official list of the exchange in September last year.

Mr Bray said the Exchange would continue to market current products and services aggressively through expansion of its trading activities beyond Accra.

"It shall also research and introduce other products such as metropolitan and municipal bonds."

He said a lot of preparation has gone on, resulting in the conversion of a significant part of government 91-day instrument into medium-term government bonds, which might be listed on the exchange.

The first auction of the Ghana Government Index-linked Bonds was held in the first week of September. According to the Finance Minister Mr Osafo-Maafo, it would be listed on the bourse in December.

Mr Bray said the Exchange would work closely with the government to re-instate the automation of Clearing, Settlement and Depository project under the World Bank's Non-Bank Financial Institutions Project to enhance the Exchange's services and make it globally competitive.

The World Bank cancelled the project last year because of the negative impact the country's economic problems have had on the performance of the Exchange.

It cited the reason for the cancellation as low stock market capitalisation both in absolute terms and as a percentage of Gross Domestic Product, low turnover and high transaction cost that it feared would increase with the proposed investment in new technology.

On the performance of the Stock Market, Mr Bray said its activities were severely affected by the unfavourable macro environment last year.

The GSE-All Share Index rose marginally by 16.55 per cent against interest rate on Treasury Bills of 38 per cent. Turnover Volume of equity transactions totalled 30.72 million valued at 50.6 billion cedis compared to 49.6 million valued at 69.6 billion cedis for 1999.

Total market capitalisation increased to 3,655 billion as at the end of December last year from 3,205 billion cedis in 1999, an increase of 14 per cent.