Mr Ekow Afedzie, the Managing Director of the GSE, has bemoaned the low participation of Ghanaians on the Ghana Stock Exchange (GSE), noting that Ghanaians prefer ‘get rich quick’ schemes, while foreigners make a lot of money on the local bourse.
The Managing Director of the GSE indicated that the development is concerning, as a lot of value is being repatriated by foreign nationals.
“Most of you [Ghanaians] sat somewhere, not looking at this market. People made as much as 270 per cent, 100 per cent and 70 per cent on this market last year [2021].
“We are sitting here and the guy in the United States of America, Hawaii or China sees that he can make a lot more money on our market but locally, we are not looking at our market.”
Mr Ekow Afedzie
The Managing Director disclosed that only 31 per cent of the market’s value in the equity market is held by local investors, leaving the almost 70 per cent stake in the hands of foreigners. He thus, called on Ghanaians to change the narrative, saying that “it has to change for more Ghanaians to benefit.”
“You saw the returns that investors made. What it means is that, these foreign guys made these fantastic returns yet our own people did not.”
Mr Ekow Afedzie
Mr Afedzie blamed the development on low investor education and financial illiteracy in general but expressed hope that an aggressive investor education by the Exchange would help change the development.
“The youth are the people we should target this year. They need to cultivate an investment culture and move away from betting. They want to get it quick and so, even if they get their fingers burnt, they still go ahead but we need to discourage that.”
Mr Ekow Afedzie
Touching on the performance of the Ghana Stock Exchange last year, the GSE MD attributed the impressive run of the local bourse in 2021 to the turnaround in the economy, following the malaise the COVID-19 pandemic imposed on it.
The MD noted that the Financial Index gained 2,151.85 basis points (bps) in 2021, representing a percentage change of 20.7 per cent in comparison to 2020.
The total market capitalisation, which is the market value of all the companies listed, also went up by 18.61 per cent from GHȼ54.4 billion in 2020 to GH¢64.49 billion.
The total value of traded shares, however, went down by 7.3 per cent to GHȼ533.27 million, with total volume traded also dipping by 30.03 per cent to 486.59 million.
The GSE MD asserted that the impressive performance was underpinned by the positive investor confidence, fuelled by strong earnings and low share prices.
The exchange returned 43.66 per cent to equity investors in 2021, breaking a three-year run in the red that was deepened by the COVID-19 pandemic.
The Ghana Fixed Income Market (GFIM) also witnessed strong growth, jumping by 92 per cent in 2021 over the 2020 close.
On the bond market, he stated that it recorded its best performance last year since it was launched in 2015.
He indicated that total bonds and notes traded increased by 92.62 per cent to GH¢208.81 billion in 2021.
Mr Ekow Afedzie noted that the Ghana Stock Exchange (GSE) is back to winning ways but few Ghanaians and local firms are profiting from the higher returns that the Exchange gives to investors.
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