The Ghana Stock Exchange (GSE) has since 1990 been gradually facilitating the development of the capital market in Ghana. The Exchange has put in place facilities for businesses and the Government to raise long-term capital as well as for investors to obtain liquidity, reasonable capital safety and diversity of investments. Since its establishment, many companies as well as the government have raised funds through the floatation of company shares and bonds to the general public.
The Ghana Stock Exchange was established in 1989 as a private company limited by guarantee under Ghana's Companies Code, 1963. The Exchange was given recognition as an authorized Stock Exchange under the Stock Exchange Act of 1971 (Act 348) in October 1990. The Exchange however, changed its status to a public company limited by guarantee in April 1994. Trading on the floor of the Exchange commenced in November 1990.
Types of Securities Traded:
Ordinary Shares (Common Stock)
Debt Securities - Corporate- Government
Trading in securities on the Exchange takes place three times a week on Mondays, Wednesdays and Fridays starting at 10:00am. Over the counter trading is however allowed in Ashanti Goldfields Company's shares and others. Trading is carried on the Floor of the Exchange under the Continuous Auction Trading System (CAT).
A minimum fee $1,500 is charged on trade value not exceeding $10,000. For trades greater than $50,000, a declining rate from 2.5% to 1% as the trade value increases, is applied.
Regulations Affecting Foreign and Non-Resident Investors
There are a few regulations affecting foreigners and non-resident investors. Exchange Control permission has been given to non-resident Ghanaians and foreigners to invest through the Exchange without any prior approval. However, one external resident portfolio investor (whether individual or institutional) can hold only up to 10% of any security approved for listing on the Exchange. Furthermore, the total holdings of all external residents in one listed security shall not exceed 74%. There is free and full foreign exchange remittability for the original capital plus all capital gains, returns and related earnings.
There is a 10% withholding tax (which is also the final tax) on dividend income for all investors, both resident and non-resident. Capital gains on listed securities are, however, exempt from tax until November 2005. There is also no stamp duty.
GSE All Share Index over the past nine years increased from 77.65 in November 1990 to 961.01 by the end of October 2001. It ended with a whooping gain of 69% making the Exchange the best performing in Africa for the year 1998. This is to complement GSE's achievements as the 6th best performing market in 1993 with an index gain of 116% and best among all the emerging markets in 1994 with an index gain of 124%.
Total market capitalization increased from $30.46 billion in November 1990 to $3,913.85 billion as at October 31, 2001.
Total volume of shares traded from November 1990 to October 31 2001 were 569 million valued at $558,845.75 million.
Over $330 billion has been raised by 12 companies through the Exchange since November 1990.
The Exchange seeks
To intensify its efforts in increasing listings and promote fund mobilization;
To encourage privatization of SOE's on the Exchange;
To encourage the listing of corporate and government debt instruments; and development new products such as collective investment schemes;
To enhance it capacity building by upgrading the knowledge of its staff and market operators both locally and externally to enhance professionalism in the industry;
Automation of trading, clearing, settlement and depository system to raise the efficiency of the securities market for all users.
For further information contact
The Managing Director
Ghana Stock Exchange
5th Floor, Cedi House, Liberia Road
P.O. Box 1849
Tel: 233-21-669914, 669908
Telex: 2722 stocex