Stock exchange to list itself
The Ghana Stock Exchange (GSE) is working at converting the exchange into a publicly-listed entity similar to any of the 38 companies currently trading on the local bourse.
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The process, known us demutualisation, is to allow the exchange to independently raise fresh capital to fund its activities such as expansion and moderinsation.
It will also give the bourse autonomy from government interference while injecting private sector expertise and efficiencies into its operations.
The Chairman of the Governing Council of GSE, Dr Sam Mensah, said at the 25th Anniversary lecture of the GSE that some progress had been made on the demutualisation project initiated last year.
The lecture was on the was on the theme: ‘the Past, Present, and Future of Stock Market Operations in Ghana.’
He said a committee had been set up with a charge to advance the process.
Benefits
He said the demutualisation, when finally completed, would bring significant changes to the operations of the GSE.
“Demutualisation signifies that an exchange has become a for-profit firm in a competitive financial market environment. It has more potential for profit and also for failure than before and like any business, it must stand alone for its financing,” he said.
He was hopeful that a demutualised GSE would help enhance investor participation, by making it possible for both institutional and retail investors to become shareholders of the bourse.
According to him, it would also provide resources for capital investment, as a key rationale for demutualisation was to give the exchange the ability to raise capital through various means, including private or public offerings to a wide range of investors.
African peers
The global trend towards demutualisation has not been lost on exchanges in Africa, as a few bourses such as the Johannesburg Stock Exchange and Mauritius and Bourse Régionale des Valeurs Mobilières (BRVM) have been demutualised.
More recently, Kenya demutualised and Nigeria is at an advanced stage of demutualisation.
Thus, should Nigeria complete that process, the GSE would now be the only stock exchange in West African with a mutual status.
New securities law
The Deputy Minister of Finance, Mrs Mona Quartey, said the ministry had forwarded the draft bill to regulate the securities industry, which it hoped would be passed into law before the first half of the year.
The bill, which has already received Cabinet’s endorsement and awaiting for Parliament to pass into law, seeks to address the weaknesses in the existing law and promote development of the market.
The securities industry is currently regulated by a 21-year-old law, which most stakeholders say is anti-business.
Among other things, the current law does not permit the GSE to share investor information with other international regulators, and also restricts limits investments in the real estate sector to only 10 per cent, something the industry has long criticised.
The passage of the new law is, therefore, expected to put the securities industry in a position to exchange information at both global and regional levels to assist the development of markets, strengthen cross-border transactions and regulations.
It will also enhance investor protection and inspire confidence in the integrity of Ghana’s securities market, the deputy minsiter added. — GB