Ghana Stock Exchange To Become Fully Automated

The Ghana Stock Exchange (GSE), is to become fully automated in 1999 as part of steps to speed up trading and settlement activities on the floor.

Consultants and designers are already working out the modalities for the transition from the current blackboard-chalk to a computerised electronic system. It is expected that the automation will enhance the depository system (book transfer of ownership of securities) of trading, make the market more transparent, improve market depth and create greater investor confidence as well as lead to higher growth of operations.

At a day's seminar Thursday, organised by GSE, participants were introduced to automated trading, clearing, settlement and depository system.

It was attended by bankers, journalists, stock brokers, licensed dealing members and operators of the market.

The automation programme is being undertaken with support from the World Bank which has sent a consultant who has started work on the automation process.

The absence of a modern automated centralised system is one of the major weaknesses of the securities market in Ghana.

Bill Gorman, a consultant from International Science and Technology Institute, USA, said with the automation of trading, it will be possible for brokers and dealers to trade from their offices and make trading order driven.

"We have developed a design involving all stakeholders," he said. "Our current primary task is to create a request for proposals for bidding documents and plan to implement the system in the next 12 months."

Gorman said GSE needs automation in order to reduce settlement risks, errors, reduce processing costs and cause the local house to rise to "well-accepted international standard."

He stressed the importance of an efficient telephone system to facilitate trade reporting from a buying broker to a selling broker, computer-to-computer communication and broadcast to public.

"There is a serious need for an information network such as leased phone lines, FM Radios, piggyback on TV signal and satellite two-way broadcast," he added.

Yeboa Amoa, managing director of GSE, said the present chalk and blackboard system takes time and where investors buy few shares, the processing share certificates becomes expensive.

"This new system of automation is meant to reduce if not, eliminate it completely," he said. "The market is expanding and there are signs all over the wall. With the introduction of other securities including foreign listings, it is vital to get prepared to meet the challenges the new concept will pose to the market and all who play in it."