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14.05.2007 General News

GSE Council to decide on share pricing

By myjoyonline

The Ghana Stock Exchange (GSE) Council is expected to take a decision on whether share prices should be quoted to four or two decimal places.

At a meeting in Accra recently, involving GSE officials and the brokers, no decision to choose one of the two options was reached. The final decision must be made before the end of June.

However, in an interview with BusinessWeek, Philip Abodoh of First Atlantic Brokerage indicated that trading to two decimal places means there would be changes in value, in which investors would lose huge sums of their investment.

He cited, as an instance, the share price of Super Paper, which trades at ยข225 and when the new cedi is introduced will become 2.25 pesewas, thus causing investors to lose the 0.25 pesewas.

He noted however, that trading to four decimal places means that the losses in old currency and the gain in new cedis will be the same, and there will not be changes in value.

According to him, trading to four decimal places in the new cedi, the Super Paper share will be quoted at 0.0225 Ghana cedis, which means that there will be no drop in any figure.

He said the final decision by the Council would erase any doubts in investors' mind.

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