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27.11.2007 Business & Finance

Capital market asked to finance new businesses

The Chairman of the Security and Exchange Commission (SEC), Professor G.K.A. Ofosu-Amaah, has called for a systematic planning and revitalisation of the capital market in the country to finance new business ideas, innovation, entrepreneurship, industrial growth and infrastructural development.

He says fighting poverty and creating wealth does not come by chance, but through well orchestrated planning and consistent execution of strategies towards the creation of investment opportunities for all economic agents in a country.

He stated that "the capital market must indeed be seen as holding the key to Ghana's economic take-off and future".

Professor Ofosu-Amaah, who made the call in Accra at the second securities industry week, said what the world was witnessing in India, China, Malaysia, among other emerging economies, were not miracles in themselves, but it was as a result of adherence to critical economic tenets.

The theme of the year's celebration is, "Paradigm Shift in Wealth Creation: The role of the Capital Market".

Professor Ofosu-Amaah said these new socioeconomic developments were being brought about by conscious efforts of governments, entrepreneurs, ordinary citizens and other key players.

He recounted the success stories of the Initial Public Offers (IPOs) of companies that listed on the Ghana Stock Exchange (GSE) and noted that "the growing trend by our local collective investment schemes to invest in financial assets abroad are glowing testimonies of a pent-up demand for limited financial assets in the Ghanaian economy.

"This rear's securities week is, therefore, calling on all stakeholders, particularly the government and private sector entrepreneurs to take advantage of this pent-up demand for securities to raise capital by issuing more securities or financial assets to finance corporate growth and development of the country's infrastructure," he added.

Professor Ofosu-Amaah urged companies to strictly adhere to market rules and regulations and to ensure the full and adequate disclosure of information to investors.

He also called for the avoidance of conflict of interest to ensure transparency, fairness and integrity of the securities market in the country.

"It is imperative that we collectively provide fair, orderly and efficient market for trading of securities as well as fair and equal treatment of investors without any form of discrimination or coercion," Professor Ofosu-Amaah added.

He said the commission was not comfortable with recent isolated developments with regard to certain off-market transactions that were clearly against established trading rules of exchange.

Professor Ofosu-Amaah did not elaborate, but cautioned those responsible for giving approvals for such transactions to carefully weigh that against the yardstick of market transparency, fairness, efficiency in terms of price discovery and equitable treatment of investors.

The board chairman also urged issuers of secu¬rities and market operators to desist from taking the law into their own hands and becoming arbiters and judges in their own court without recourse to the regulators.

The Finance Minister, Mr Kwadwo Baah-Wiredu said the government had realised that access to relatively cheaper source of capital had been a major hindrance to the private sector development in the country.
''This has made the sector unresponsive to all the positive stimuli provided by the favourable macroeconomic environment," he said.

"Difficulties in accessing capital at a lower cost have caused not only the private sector, but all of the entire economy to lose many opportunities that have availed themselves of Ghana to improve on her export performance and competitiveness, employment creation and revenue generation for an expanded economy," he noted.

Mr Baah-Wiredu congratulated the commission on initiating the securities week to demystify the capital market as well as making it a place for wealth creation and the development of the country.

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