‘Use capital market to raise long-term finance’

BY: Arku Jasmine

The Ghana Stock Exchange (GSE) has called on the key state institutions such as the Volta River Authority, Electricity Corporation of Ghana, the Gridco and metropolitan authorities to use the exchange to raise long-term capital to finance their operations.
According to the exchange seeking short-dated funds to finance long-term projects do not augur well for the development of business and enterprises which some key corporations and companies find themselves in.

The Chairman of the Governing Council of the GSE Dr Sam Mensah speaking at the 23rd  annual general meeting of the exchange in Accra stated that the exchange had made wide ranging  recommendations  to government  which if implemented  would see a significant  growth  in the domestic market bond market.

Giving the market performance for the period under review, Dr Mensah said  volume of  shares traded  during 2012  stood at 218 million valued at GH¢102.1 million down from the 2011  numbers  of 419 million shares valued at GH¢446.6 million.

These Dr Mensah explained was due to the macroeconomic difficulties coupled with the fact that 2012 was an election year which resulted in a major  slow-down  on the local bourse.

The return  on the market as measured by  the GSE Composite Index for 2012  stood at 23.81 per cent  against a negative 3.10 per cent for 2011 while  the GSE Financial Stock Index  recorded  a gain  of 20.48 per cent  with a negative  growth of 13.69 per cent for 2011

Market capitalisation at the end of 2012 was GH¢57.3 billion, an increase of 21 per cent over the value of GH¢47.3 billion at the end of 2011.

At the beginning of 2012 the exchange commenced the publication of the domestic capitalisation of the market in addition to the overall market capitalisation.

The domestic  capitalisation  excludes  the value  of companies  that have  their primary  listing  on other  international  markets  and only  have a secondary listing  on the market.

These companies include the likes of Tullow plc, AngloGold Ashanti Ltd, Golden Star Resources and Ecobank Transnational Incorporated.

By Lloyd Evans/Graphic Business/Ghana