The stock exchange recorded a much higher trading activity in 2017 than in 2016 in both the equity and fixed income market, the Managing Director of the Ghana Stock Exchange Mr Kofi Yamoah said on Tuesday.
The significant gain on the GSE Composite index, which recorded 52.73 per cent in 2017, helped the index to return to positive territory after two consecutive years of decline in 2015 and 2016.
The index registered a negative 15.33 per cent in 2016.
Market Capitalisation was up during 2017 to GH¢58.80 billion while volume and value of shares traded went up to 322.73 million shares and GH¢518.38 million.
There were very high and increased interest in the fixed income market by corporate issuers.
Mr Yamoah attributed the improved performance to improving macro-economic indicators, including declining inflation, falling 91-day Treasury interest rate, and the exchange rate, among others.
There is also generally higher profits by listed companies and the restoration of tax-exempt status of capital gains on listed securities and improved investor confidence in the market.
However, Mr Yamoah said, the successes in performance had not reflected in new equity listings as 2017 registered a blank as far as listings was concerned.
He said the low number of listed securities, 36 equities on the main market and four equities on the Ghana Alternative Market, remained a key challenge but there is hope for some initial public offers in 2018.
Other key challenges include the low liquidity in the secondary market, although there was a slight improvement in 2017, and lack of macro incentives for attracting issuers.
Mr Yamoah said the restoration of the capital gains tax exempt status and the increase in the investment threshold of the National Pensions Regulatory Authority in equities from 10 to 20 per cent as well as the local content initial public offer of a telecom’s shares, would help boost attraction.
Going forward, Mr Yamoah said the GSE would step up promotion of the markets to issuers and investors as well as advocacy for local content listings.
“The GSE would also look to improving market efficiency, confidence and ultimately liquidity and support the development of Ghana’s market for repurchase agreements to enhance the bond market”, he added.
He said the GSE would operationalize a satellite office in Kumasi for running its GSE securities courses and build capacity of market professionals through training and tours.