The Ghana Stock Exchange (GSE) has reported an increase in the number of indigenous investors trading shares on the local bourse.
It said the surge follows the realisation that the GSE was an avenue for locals to invest, build up capital and prosper.
The Managing Director of the GSE, Mr Ekow Afedzie, who said this at the media launch of the 30th anniversary of the exchange in Accra yesterday, added that unlike the past when foreign investors dominated the list of people and institutions owning shares, the trend had changed.
In terms of value, he said, participation from both local and foreign investors was 50-50, compared to 10 years ago when the market was heavily dominated by foreign investors.
He explained that the development was positive for capital market growth and financial intermediation
“Participation in the equity market has changed over the past 10 years. A few years ago, we had more participation from foreign investors, but as we speak now, it is almost 50-50. We are getting more domestic investors in the equity market, which is very good for the country,” he said.
Volumes traded
In terms of volume, Mr Afedzie said the number of foreign investors was a little over 1,000, while that of local investors was close to 220,000, indicating that the equity market was becoming more attractive to local investors.
“The equity market has become attractive to local investors, and going forward, one of our key initiatives is to attract more pension funds to invest in the equity market, other than government instruments,” he said.
He said the GSE was currently in discussions with the State Interest and Governance Authority (SIGA) to get state-owned enterprises (SOEs) to list on the local bourse.
The discussions, when completed, would allow SOEs to trade shares of their companies on the exchange in return for capital to boost their businesses, he said.
“We have been talking to them for a while now and very soon we will hear an announcement from them. Through the Minister of Finance, SIGA and all relevant entities are working towards getting some SOEs to utilise the capital market to raise capital. They can raise the money either by way of equities or by floating shares,” he added.
Demutualisation
On plans for the exchange to demutualise by changing the nature of ownership, a process which has been ongoing over the years, Mr Afedzie said: “We have talked about it for some time now and it will surely come to fruition.”
“Next year, we will see more progress. It is simply changing our status from a guaranteed company to a company listed by shares. When this happens, what it means is that we are going to have shareholders.
“The question, however, is: will it be the panacea to all our problems? As we demutualise, we have to make sure that all the key challenges of the exchange are looked at,” he said, adding that the GSE was taking a second look at the structure of the Ghana Alternative Market (GAX) as part of its strategic plan.
