The Ghana Stock Exchange (GSE) has pledged its continuous support to issuers as well as investors to meet their investment goals despite the unpalatable economic situation that the country finds itself in.
According to GSE, whilst Issuers are seeking for long term affordable capital, investors are looking out for a well regulated market to ensure their investments needs are met and safe. Given this, the local bourse assured investors that it will do all within its powers to provide the enabling environment for investors to thrive.
Speaking at the GSE’s ‘Facts Behind the Figures’ forum in Accra, the new Managing Director of GSE, Ms Abena Amoah, noted that the Exchange remains committed to running an efficient market to help companies raise the needed long term capital and ensure the safety of their Investments. She indicated that despite the downturn in the Equities Market, it has witnessed a significant increase in the volume traded this year.
Ms. Amoah said the fixed income market, this year has witnessed a 12 percent growth in volumes traded. She said the aim of GSE is to attract more Corporate issuers to the market to raise more debt to finance their business.
Pushing for More Corporate Issuers on Fixed Income Market
In making available long-term funding to the private sector, the Ghana Stock Exchange (GSE) is pushing for the listing of some 36 new corporate bonds on the Ghana Fixed Income Market (GFIM) in the next five years, thus, at least six new issuers per year.
The corporate bond market is nascent– with a very limited number and type of issuers of 11 listed bonds, with the total amount outstanding being GH¢11.93billion as of 2022, which is small compared to the outstanding government of Ghana bonds at GH¢150billion.
“This market was set up in 2015 and is still relatively in its infant stages; and like many bond markets that are developing, it starts with government securities. We currently have about 11 issuers on the debt market (which have raised about GH¢12.61billion in debt, out a shelf registration of GH¢17.67billion).”
Ms Abena Amoah
Largely, among the reasons for lack of issuer interest in corporate bonds have been the unwillingness of private issuers to meet the high demands attached to listing such as transparency and transaction costs, as well as limited flexibility in public debt markets relative to bank loans.
However, the MD mentioned that the key challenge of the private sector is access to long-term and affordable capital. “Many of the private sectors have maxed-out of their bank loans which are expensive and short-term, and do not afford them to do the long-term projects such as the acquisition of new equipment among others”.
“Today, we have the private pension funds which have about GH¢10billion looking for investment opportunities in listed equities or listed corporate bonds. We are working in partnership with our stockbrokers to get those companies ready which have the right governing structure, right business plan, and gain access to this GH¢10billion to create jobs and grow the economy.”
Ms Abena Amoah
Ms Amoah noted that institutional investors such as pension funds, collective investment schemes and insurance companies are growing but have few investment options in capital market products, since current tradable options are limited to government debt, a few corporate bonds and a few equity listings.
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