Govt. Bonds to be traded on stock exchange

Secondary trading and listing of the Government of Ghana Index-Linked Bonds (GGILB) will commence today on the Ghana Stock Exchange (GSE).

This follows the approval by the Governing Council of the Exchange for the listing of GGILBs of ?949.43 billion and subsequent issues of the GGILBs after the initial listing. According to a statement issued by the Exchange, the listing would mark a major milestone in the development of the GSE and the capital market.

“The issuance of the GGILBs will surely deepen the debt market end of the stock market, set new benchmarks for future corporate and other government bonds as well as enhance activity on the market,” the statement said.

The current issues are three-year inflation protected Government of Ghana bonds, which would be repaid by the government in 2004. Interest would be paid semi-annually. The GGILBs have a real coupon rate of 5-6 per cent.

“The principal and each interest payment will be adjusted in line with changes in the Consumer Price Index to take account of inflation after the GGILBs are issued.”

GGILBs would be traded over the counter and would be carried out five times a week by registered dealers called government securities dealers. GGILB trading would be settled on the same day. The Exchange said 18 dealers have so far registered to carry out secondary market activity in the GGILBs.

The statement said the issuance of the bonds started on September 7 and represented the government’s efforts to restructure the domestic debt.

It said it was expected that about 50 per cent of domestic debt of about ?6.1 million would be converted under the exercise and listed on the GSE. About ?1 trillion of the GGILB are expected to be issued and listed by the end of December.