Stand up to the challenges- GSE boss tells stock brokering firms

GSE (fin) Edited by LHA
Story: Boahene Asamoah

THE Managing Director of the Ghana Stock Exchange (GSE), Mr K.S. Yamoah, has urged brokers on the market to brace themselves up for the challenges that confront the capital market.
He said the implementation of the new rule book of the exchange, the expected passage of the Central Depository System (CDS) Bill by Parliament, the automation of the trading as well as the re-denomination of the cedi would pose serious challenges to the market.
In an interview shortly after the listing of Transaction Solutions on the market, Mr Yamoah said “ the challenge for us is to brace ourselves up for these challenges that lie ahead”.
Mr Yamoah said these policies would have a positive impact on the operations of the Ghana bourse, acknowledging that one of the major challenges would be an enhanced public education.
He said the GSE rule book had been reviewed and was expected to be implemented during the course of this year.
He further stated that the passage of the CDS Bill by Parliament would facilitate the easy trading and transfer of share ownership without the use of paper, adding that the purchase and trading of shares would be done through electronic transfer.
Mr Yamoah said the redomination of the cedi would also impact positively on stock market trading as a result of the knocking off of four zeros from the currency.
The managing director said the market was also expected to see some listings on the market to boost the capitalisation of the market as a result of the government’s policy to use the market to divest itself of State Owned Enterprises (SOE).
Companies such as State Insurance Company (SIC) and the Ghana Oil Company Limited (GOIL), Ghana Oil Palm Plantation, Western Telecom (WESTEL) and Ghana Telecom are expected to be divested through initial public offering.
Corporate bodies such as the Trust Bank Limited of The Gambia, British American Tobacco, Camelot as well as HFC are expected to issue right issues during the course of the year.
“These are all expected to make the market vibrant during the course of the year”, a stock market analyst said.
Mr Iddrisu Mahama, Head of EDC Stockbrokers Limited, said with the expected listing of these companies the market capitalisation was expected to increase by about five per cent.
Mr Mahama said although the market was not expected to be as bullish as experienced in 2003 and 2004, it was however, expected to do much better than the five per cent yield recorded last year and predicted a 30 per cent return on investments as a result of the positive outlook.