The Chairman of the GSE Council, Dr Sam Mensah has reiterated the Exchange’s call on government to reconsider and restore the market incentives that were granted to both local and foreign investors.
Speaking at the GSE’s 26th annual general meeting (AGM) in Accra, Dr Mensah said the introduction of the Income Tax Act 2015 had taken away all tax incentives that were in place to make the capital market attractive to investors.
The incentives included capital gain tax exempt status for listed securities, a three per cent rebate that companies listing on the Exchange enjoy for the first three years and the GSE’s own corporate tax exempt status even though the GSE is a company limited by guarantee.
“We are respectfully again asking the government for these market incentives to be reconsidered and restored to the status quo ante,” he told members of the Exchange at the AGM.
The meeting was, among other things, to review the performance of the Exchange and approve the appointment of independent Council members.
On market performance, Dr Mensah said the GSE Composite Index, which measures the performance of the entire market, fell 11.77 per cent in 2015 compared to the positive return of 5.4 per cent in 2014.
He attributed the negative out-turn to the difficult economic conditions in 2015, including the energy crisis and the depreciation of the cedi, which took a heavy toll on the listed companies on the bourse.
Dr Mensah said the subdued performance was also reflected in the market turnover.
The volume of shares traded for 2015 stood at 246 million shares valued at GH¢247 million compared to the volume and value of 207 million and GH¢346million the previous year.
The Market capitalisation of listed securities at the end of December 2015 was GH¢57.1 billion compared to GH¢64.4 billion around the same period in 2014, representing a decrease of 11 per cent.
Also, domestic market capitalisation fell by 19 per cent at GH¢11.2 billion compared to GH¢ 13.9 billion in 2014.
Despite the difficult economic and market conditions, the Exchange recorded a surplus of GH¢2.55 million.
On the Integration of the West African markets, Dr Mensah said the programme is making sustained and steady progress as seen in the number of online real-time cross-border trades between Ghana and Nigeria under the sponsored Access Phase.
He said the West African Capital Market Integration Council had decided that the second phase of the project, the common passport and Mutual Recognition, would be implemented in March 2017.
Meanwhile, Dr Mensah said the GSE’s quest to demutualize has made significant progress with an expert committee in place to study the roadmap.
He said demutualisation would impact positively on GSE and make it attractive to companies that are not already on the market.