Capital Markets
From The Report: Ghana 2020
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Sector stabilisation and reform are key focuses within the capital markets arena. While the regulator is taking steps to shore up market confidence in light of recent banking and asset management reforms, the long-term ambition of authorities is to introduce new products and services to attract the capital flows necessary for a deeper and more sustainable market. Ghana’s principal exchange is the Ghana Stock Exchange (GSE), which as of the first quarter of 2019 had 33 companies listed on its main board. In terms of market capitalisation, the GSE is dominated by the mining and petroleum sectors, which accounted for 52.5% of the total in 2018. The financial sector is the second-biggest component, contributing 23.85% to total market capitalisation, followed by ICT (15.88%), food and beverages (2.71%), and distribution (2.66%). This chapter also contains interviews with Cecilia Hesse, Managing Director, Temple Investments; and Ekow Afedzie, Managing Director, Ghana Stock Exchange.

Articles from this Chapter

Overview

Restoring stability: The authorities work to attract sustainable flows of capital to the country’s stock exchange
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As Ghana enters an election year in 2020, sector stabilisation and reform are key focuses within the capital markets arena. While the regulator is taking steps to shore up market confidence in the short term in light of recent banking and asset management reforms, the long-term ambition of exchange authorities is to introduce new products and services that will attract the capital flows necessary for a deeper and more sustainable market. Market Progress Although limited capital markets…

Analysis

Continuing growth: Fixed-income market to remain buoyant in 2020
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Ghana’s fixed-income market has experienced significant growth. As of end-September 2019 domestic fixed-income securities issued on the Ghana Fixed-Income Market (GFIM) totalled GHS104bn ($20.1bn), against GHS102.4bn ($19.8bn) over the same period in 2018, marking growth of 2%. Comparatively, the equity market experienced a year-to-date decline of 5.8%, to a market capitalisation of GHS57.6bn ($11.2bn). Sovereign Debt Domestic debt issuances by the government dominate the fixed-income market, with a total outstanding value of GHS77.4bn ($15bn) as of the third quarter of 2019. Government issuances accounted for 35% of total debt securities…

Analysis

Recovering market: Regulatory reforms to facilitate equity market activity
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The equity market experienced reduced performance in recent years, with the Ghana Stock Exchange (GSE) Composite Index returning -0.29% and -10.44% in 2018 and September 2019, respectively. This is down from a high of 52.37% in 2017. Market capitalisation as of end-September 2019 was GHS56.3bn ($10.9bn), down from GHS66.1bn ($12.8bn) one year earlier. The downturn in the equity market can be attributed to rising yields in the fixed-income market and capital flight from foreign investors dumping local securities to take advantage of rate hikes by the US Federal Reserve. Additionally, local retail investors have been selling their stock…

Interview

Renewed confidence: Cecilia Hesse, Managing Director, Temple Investments, on the future of the fund management segment
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Interview:Cecilia Hesse What is the current outlook for the fund management segment in Ghana? CECILIA HESSE: Even though we saw a reduction in total assets under management (AUM) in 2018, the past eight years have seen significant growth in AUM for fund managers. The 2017-18 banking crisis drove retail investors to move a significant amount of their assets from fund managers to Tier-1 banks. This, together with fund investment losses, resulted in a fall in AUM from GHS35.2bn ($6.8bn) to GHS19.5bn…

Interview

Expand and enable: Ekow Afedzie, Managing Director, Ghana Stock Exchange (GSE), on facilitating broader economic development
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Interview:Ekow Afedzie What main objectives does the GSE want to achieve through its three-year strategic plan? EKOW AFEDZIE: By 2023 we want to achieve three key things. First, we want to be recognised as a demutualised entity that is innovative and competitive. Second, we aim to be the preferred platform in the provision of finance and investment for both the public and private sectors. Lastly, in the regional and global context, we want to be recognised as the preferred entry point market…