GSE, SEC anticipates increased corporate bond issues

BY: Arku Jasmine

Mr Seth Terpker, Minister of Finance ready to ring the bell to signify commencement of trading in the US$1 billion Eurobond at the Ghana Stock Exhange.The Ghana Stock Exchange (GSE) and the Securities and Exchange Commission (SEC) are optimistic the maiden listing and subsequent trading of the country's Eurobond on the bourse will help attract more corporate bonds from local and international issuers.
Currently  two, three, and  five-year government of Ghana (GoG) bonds are listed on the bourse.

Previous issues by  HFC Bank have not been sustained  due to dwindling interest on the issues over the years.

The Managing Director of the GSE, Mr Kofi Yamoah, and the Director-General of SEC, Mr Adu Anane Antwi, are, however, confident that recent developments on the bourse and the country in general could serve as a bolster to issuance of bonds on the market.

"Our hope is that this listing and trading of the Eurobond will turn the attention of more issuers on our market," the DG of SEC told the GRAPHIC BUSINESS after the symbolic listing and start of trading of the country's second Eurobond on the stock exchange.

The US$1 billion Eurobond, issued on July 25, was listed on the GSE on August 28 and that makes the GSE the first bourse in Africa to trade a Eurobond.

Given that the development gives domestic and international investors the opportunity to buy and sell the Eurobond on Ghana's market, the MD of the GSE was confident  that investor interest on the market will rise and could cause more foreign issuers of bonds to direct their attentions to the country.

“The listing will serve as a benchmark to other issues. With it on our market, there will definitely be more activities on the bourse and that presupposes that any issue on it will now attract more investor interest,” Mr Yamoah said in an interview.

“And the more we have of this (Eurobond listings), the more corporate institutions will come to issue bonds and all these will help develop the market,” he added.

Mr Yamoah, however, advised that people should not be surprised if the Eurobond does not witness continuous day-to-day tradings, explaining that  most investors who buy the bond could decide to hold on to it rather than selling.

“If the yield is good, of course, they will prefer not to sell but to hold it till maturity,” he said.

Local investors currently hold about US$16.5 million of the bond, which is due to mature in 2023.

The bond is also listed and being traded on the Irish Stock Exchange (ISE) at a yield of 8.17 per cent as of August 28.

IFC bonds

The maiden listing of the Eurobond on the GSE came days after the International Finance Corporation (IFC) announced in a statement that it had secured the approval of the GSE and the SEC to issue cedi-denominated bonds on Ghana's market.

According to Mr Yamoah, the exchange will record two more listings before the end of this year and mentioned the Vanguard Assurance Company and a fund he declined to disclose its identity as the two institutions currently preparing to float part of their stakes on the bourse.

Mr Yamoah said Intravenous Infusions Limited (IIL), an indigenous pharmaceutical company based in Koforidua, was also working at listing.

The exchange entered its 23 year of trading this year and is currently rated the best performing bourse in Africa.

By Maxwell Adombila Akalaare/Graphic Business/Ghana