Accra, Aug. 21, GNA - Pre-trading on the Ghana Stock Exchange (GSE) before the official trading on the bourse is not an illegality, contrary to some speculations in a section of the media.

Mrs Elizabeth Mate-Kole, General Manager of Operations at the GSE, who made this known on Tuesday, during a day's capacity-building workshop for members of the International Federation of Economic Journalists (IFEJ), in Accra, said pre-trading was a normal practice among many nations.

She stressed that the daily pre-opening period for trading was to allow the previous day's surplus to be put on the stock to be traded.

Mrs Mate-Kole was reacting to a statement made by Mr Kwabena Situ, a Senior Audit and Advisory Manager of Deloitte Ghana (DG) during a workshop organized on July 31st, by his outfit and the Association of Chartered Certified Accountants, Ghana, which suggested that the GSE's pre-trading operations, was not in conformity to global stock exchange trading standards.

Mr Situ was of the opinion that the pre-trading exercise had the tendency to distort prices on the bourse since, according to him, the price a company closed its trading activity on the previous day was different from what it begun its operations with the following day.

Mr Situ suggested that the price changes had the potential to mislead an investor.

He suggested that pre-trading needed to be discontinued since it was not done anywhere in any active trading platform in the global financial industry.

The GSE runs a daily pre-opening trading session that boosts liquidity before the official opening at 10:00 hours.

It is suggested that the time also affords non-resident investors in different time zones the opportunity to do business with their local brokers.

Mrs Mate-Kole called on journalists to research and verify whether pre-trading was an illegality.

Mr Ekow Afedzie, Deputy Managing Director of GSE, said the activities of the bourse were overseen by the Council as well as the Security and Exchange Commission.

He called on journalists to focus their reportage on how to generate activity on the stock exchange and how to encourage more companies to enlist on it.

In a related development, it was announced at the day's workshop that the GSE would see the listing of its first commodity backed Exchange Traded Funds (ETFs) on Wednesday, August 22, 2012.

The move follows the decision of South African group Absa Capital to list its gold-backed ETFs to help broaden the range of securities on the bourse.

This makes the GSE the fourth to list the NewGold ETFs after primary listing in South Africa and other listings on bourses in Nigeria and Botswana.

The fund is expected to open on an initial offering split into 400,000 units, to test demand in the market before future possible expansion.

Mr Kofi Yamoah, Managing Director of the GSE said the listing on the bourse would help diversify the stock exchange from the equities and bonds that currently dominate it.

"It is a means to deepen and broaden the security types that are available and traded on the bourse,' he said, adding that, the listing will also provide the learning platform for the development of other ETFs in the future.

Mr Yamoah said it would help boost capacity of dealers, fund managers and other market players.

NewGold, Africa's largest ETF, is the best performing ETF on the continent over five years, with a return of 22.55% per year, a two year return of 24.76% and a return over three years of 21.66%.

As at 1 August 2012, NewGold's assets under management were US 2.15 billion dollars.

It is the only gold-backed ETF on the continent and is a simple and cost effective way of investing directly in physical gold bullion through a GSE listed share.

The listing is in line with Absa Capital's overall strategy to expand its suite of products and services in sub-Saharan Africa.

GNA