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Redenomination: GSE to Quote Share Prices to four decimal places

Mon, 4 Jun 2007 Source: GNA

Accra, June 4, GNA - Beginning July, the Ghana Stock Exchange will quote the share prices and market capitalization of listed equities on the bourse to four decimal places in line with the currency redenomination, which officially commences on July 1, this year. Consequently, the Exchange's Official List on Friday June 29 will have two versions of trading results - one quoted in cedis and the other in Ghana cedis. The Ghana Cedis version will show all values in the redenominated currency in readiness for trading on Tuesday, July 3, 2007.

Mr. Kofi Yamoah, Managing Director of the Ghana Stock Exchange, who announced this at a forum for listed companies, said the decision was arrived at following extensive discussion with all stakeholders and the Bank of Ghana.

The forum was organized by the Ghana Stock Exchange and the Securities and Exchange Commission to share with company executives recent developments on the Ghanaian Capital Market and their impacts on listed companies.

It was also to provide a platform for exchange of ideas for further development of the capital market.

Mr. Yamoah said the change would also affect the reporting of Earnings per Share on the GSE Official List, which will be in the new Ghana Cedi to four decimal places.

Apart from HFC Bank Corporate Bonds, which value will continue to be reported in dollars after the redenomination, the SCB Medium Term Notes and the Government of Ghana two year, three year and five year bonds are to be quoted in Ghana Cedis up to four decimal places and in millions up to four decimal places respectively.

On the automation of the trading platform, Mr. Yamoah said five bids were received and evaluation would be carried out to select a winner for the contract to be signed.

He said all things going well, the implementation of the automation programme would commence in September and completed by December 31, 2007.

Some of the advantages to be derived from an automated trading include efficient price discovery arising from disclosure of depth of market and automated matching of single orders, significant increases in trading volumes, ability to promptly disseminate trading related information and data and linkage of automated platform to the Central Securities Depository to facilitate clearing and settlement of trades.

Mr. Ekow Acquaah-Arhin, Deputy Director General, Securities and Exchange Commission drew attention of the companies to the provision of timely information, which he said was the lifeblood of capital markets. He wondered why information on new products, new markets and the adoption of new technologies were not released to the market on a timely manner, adding that this often gave rise to suggestions that the market was non-responsive to information.

Mr. Acquaah-Arhin asked the companies to make more widely available quarterly estimates of profits and also draw public attention to difficulties that would make them unable to meet the targets.

On the Securities Industry Law, he said efforts were already underway to expunge or replace some provisions of the law, found to be inimical to the growth of the market. He said although laws were necessary for the smooth running and orderly growth, they should not be a fetter to the development of the country's markets. During discussions, some of the representatives of companies asked the Exchange officials to deal with the issue of high transaction cost in trading of equities. They held that this could lead to a situation where trading activities would not be done through the bourse and companies could eventually lose track of who actually were their shareholders. 04 June 07

Source: GNA