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GHANA STOCK EXCHANGE Bringing Companies and Investors Together .

GHANA STOCK EXCHANGE Bringing Companies and Investors Together. Presentation at ASEA Conference CAIRO – EGYPT 10 – 12 Sept. 2005. By EKOW AFEDZIE GENERAL MANAGER GHANA STOCK EXCHANGE. INTRODUCTION. Ghana is a peaceful developing country on the West Coast of Africa.  The capital is Accra.

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GHANA STOCK EXCHANGE Bringing Companies and Investors Together .

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  1. GHANA STOCK EXCHANGEBringing Companies and Investors Together. Presentation at ASEA Conference CAIRO – EGYPT 10 – 12 Sept. 2005 By EKOW AFEDZIE GENERAL MANAGER GHANA STOCK EXCHANGE

  2. INTRODUCTION • Ghana is a peaceful developing country on the West Coast of Africa.  The capital is Accra. • Ghana is a democratic country – (Multiparty Democracy). • Ghana has a population of approximately 20m. • Prudent macroeconomic policies and strong agricultural performance have sustained steady economic growth over the past 5 years. • Reforms have improved the business and regulatory environment.

  3. INTRODUCTION • GSE upholds all related internationally accepted principles. • Good rule book – Listing, Membership, Trading, Clearing & Settlement Rules. • GSE committed to transparency & adequate disclosure. • Securities and Exchange Commission exists as a regulator to protect market and investors.

  4. OVERVIEW OF GHANA STOCK EXCHANGE • The Ghana Stock Exchange commenced operations in 1990. – Incorporated as a Company Limited by guarantee. • The Exchange has no owners but members - two categories of members :- • Licensed Dealing Members (16) • Associate Members (33)

  5. OVERVIEW OF GHANA STOCK EXCHANGE cont’d • Structure • Sixteen (16) Licensed Stockbroking firms • Twenty eight (28) Listed Companies • Three (3) Registrars • Two (2) Custodians • Products • Ordinary Shares (28) • Corporate Bonds (4) • Government Bonds (3)

  6. OVERVIEW OF GHANA STOCK EXCHANGE cont’d • Trading • Continuous Auction System – but Manual • Clearing and Settlement • Manual but centralized • Settlement period is T + 3

  7. OVERVIEW OF GHANA STOCK EXCHANGE cont’d • Central Securities Depository Currently in operation but for Government Securities. - Equities to be introduced in 2006.

  8. OVERVIEW OF GHANA STOCK EXCHANGE cont’d • Listing – 3 Categories - 1st, 2nd and 3rd Official Lists • Provisional Listing approach permitted.

  9. OVERVIEW OF GHANA STOCK EXCHANGE cont’d • Market open to non-resident foreigners (NRF). • One NRF has a maximum holding limit of 10% per listed security – maximum holdings of all NRF holdings in one security is 74%. (can be exceeded only when prior approval is granted). - Restrictions however do not apply to 3 companies. • Free and full foreign exchange remittability. • Taxation - 10% final dividend withholding tax for all investors - No Capital gains tax - No stamp duty on transfer of shares.

  10. MARKET PERFORMANCE • Index Performance (% change) • Up by - 45.96% in 2002 • - 154.67% in 2003 • - 91.33% in 2004 • - -28.14% in 2005 (5/9/05) • Great returns made by investors in the last four years.

  11. MARKET PERFORMANCE con’t • Market Capitalization • - ¢92,128.40 billion on September 5, 2005 (equivalent of US$10,171 million). • Volumes and Values • as at September 5, 2005 • - Volume: 856.93 million • - Value: ¢1,868.02 billion

  12. STRATEGIC INITIATIVES FOR GROWTH • Pursuit of listings more aggressively. - 4 IPOs in 2004 and expecting more in the coming years. - Privatization of large State Owned Enterprises in the offing. - More banking stocks expected shortly.

  13. STRATEGIC INITIATIVES FOR GROWTH • Creating incentives for listing - Corporate tax rebate of 5% for newly listed companies during the first 3 years. - Discount on listings fees for small companies. • Positioning the exchange as an attractive investment avenue to improve liquidity and increase trade volumes. - Extensive educational campaign. - Removing restrictions on non-resident foreign investors.

  14. STRATEGIC INITIATIVES FOR GROWTH • Improving efficiency of the market - Bank of Ghana has established a Central Securities Depository for all securities (equities to be admitted therein shortly). - Automation of trading, high on the agenda in 2006. - Major review of entire GSE Rule Book almost completed.

  15. CONCLUSION • The vision is to make Ghana Stock Exchange more relevant in the economic development of Ghana through facilitation of long-term funds mobilization. - Expertise available - Economic Environment favourable for long term investments. - Investors invited to experience the Ghanaian hospitality as well as good returns on investments. Thank You

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