The Ghana Stock Exchange is strategising to evolve from a frontier market status to an emerging market one, Ekow Afedzie, Managing Director of the GSE has revealed.
This is part of a three-prong strategy that the GSE has adopted for the year 2020 which it believes will enable it reach the 100-listing benchmark in the not-too-distant future.
An emerging market is a market that has some characteristics of a developed market, but does not satisfy the standards to be termed a developed market. A frontier market, however, is a market which is more developed than the least developing countries’, but too small, risky, or illiquid.
“In our strategy going forward, we want to transition from what we called a frontier market, that is where we are, to an emerging market, and once we become an emerging market, we become attractive for local and foreign investors; and that will also go a long way to facilitate the development of the financial hub that the government intends to create in order to attract investors to Ghana”, he said at the listing ceremony of the first merger of three pharmaceutical entities; Dannex, Ayrton and Starwin Plc on the GSE.
Secondly, Mr Afedzie said his outfit wants to become the preferred market for raising long-term capital and also providing the avenue for investments.
Thirdly, he said: “We will make sure to carry out a lot of education – comprehensive and sustainable education – over the period to make the exchange more visible and also to encourage investments and savings culture.”
He urged local companies, in particular, to take a cue from the three merged entities to raise long-term funds from the capital market to fund their businesses, but added that the listing of the firms will also bring transparency and disclosures to their operations.
In terms of performance, though the equity market registered a negative return for investors in 2019, it registered GHS624 million of shares traded, the second-highest in 2019. Forty firms are listed on the main equity market
For the bond market, GH55.9 billion of bonds were traded on the bond or fixed-income market.
Eighty government securities are presently listed on the bond market and 10 corporate bonds.
The total market value is GHS87 billion.
The GSE has three markets – the main market, the alternative market and the bond market.
The merged pharmaceutical entities will trade under the name Dannex, Ayrton and Starwin Plc.