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19.01.2005 Business & Finance

Ghana stock exchange registers another sterling performance

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Accra, Jan. 19, GNA - Ghana's stock market surpassed most of the world's emerging markets once again as its key performance indicator, the Ghana Stock Exchange (GSE) All-Share Index, gained 91.33 per cent in 2004.

The All-Share Index moved up from 3,553.42 points at the beginning of the year to reach 7,045.40 points.

Mr Kofi Yamoah, Managing Director of the GSE, told Journalists and Stock Brokers in Accra on Wednesday that the gains on the Exchange were above the prevailing annual interest rates equivalent on the 91-day Treasury Bills, which stood at 17.8 per cent at the end of the year. He attributed the high yielding gains on the market to stable macro-economic indicators made up of interest rates on treasury instruments, inflation rates and exchange rates. Other contributory factors were outstanding results posted by many listed securities and sustained high demand from the local investing public.

Some of the current macro-economic indicators are a decline in inflation from 23.6 per cent to 12.3 per cent as at November 2004 and only a 2.5 per cent depreciation of the cedi against the dollar. Mr Yamoah said market capitalization rose from 12,617 billion cedis to 97,614 billion cedis during the year with the huge increase attributed to the listing of AngloGold Ashanti Limited in replacement of Ashanti Goldfields Company Limited and four other listings. During the period under review 104.4 million shares valued at 655.9 billion cedis were traded compared to the 96.3 million shares valued at 389.3 billion cedis in 2003.

The figures, Mr Yamoah said, represented the second highest volume and highest in value traded on the Exchange in a particular year since its establishment.

He identified Ghana Commercial Bank, Accra Brewery Limited, CAL Bank and Cocoa Processing Company as the most actively traded shares on the floor.

On the whole, five dealers in share transactions contributed to the successes of the year under review.

Strategic African Securities Limited, NTHC, Databank Brokerage Ltd, Ecobank Stockbrokers Ltd and Merban Stockbrokers were the five dealers that accounted for nearly 80 per cent of the transactions in 2004. The GSE registered five new listings and four existing companies raised fresh capital.

The Initial Public Offerings (IPO) raised a total of 159.3 billion cedis while the existing companies raised 67.1 billion cedis through rights issues.

Benso Oil Palm Plantation, Cal Bank Limited, Starwin Products Limitd, Clydestone Ghana Limited were the companies that gave IPOs with Golden Web Ghana Limited listing provisionally.

Mechanical Lloyd Company Limited and Accra Brewery Limited gave the rights issues while Anglogold Ashanti Limited and Guinness Ghana Breweries Limited resulted from mergers.

Bonds traded on the floor were apportioned between Home Finance Company (HFC) and the Government Index-Linked bonds as 73,417 dollars and 35 billion cedis, respectively for the whole of 2004.

Trading for the previous year was higher at 606,600 dollars and 123 billion cedis for HFC and the government, respectively.

On the Exchange's operations, Mr Yamoah said the GSE continued its manual but centralized clearing and settlement of the T+3, which is the trading day plus three days in 2004. However, the system would be phased out when the listed securities are admitted to the Bank of Ghana-sponsored Central Securities Depository.

"The Depository will have far reaching benefits for the enquiry market once listed equity certificates and new securities to be traded are by law immobilized in it," he said. He added that it would eliminate many of the bottlenecks and risks associated with much paperwork in post-trading processes and registration.

Mr Yamoah said in 2005, activities on the Exchange would focus on redrafting the GSE's rulebook and seek regulatory approval for its implementation.

The need to redraft the rulebook was a result of unforeseen problems that arose from dispute resolutions and some mergers. The GSE would also focus on sustained inflow of new listings, automated trading system, raising public awareness through education and promotion and to complement the Securities Exchange Commission's efforts at raising the level of compliance so as to ensure greater public confidence in the market.

Mr Yamoah advised the investor public to always seek counsel from licensed brokers in order to take the right decisions in the investment profiles.

Listed equities on the bourse now stand at 30 but some companies including TV3, Scancom and State Insurance Company have stated their intention to list in the course of the year.

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