SEC to unveil Capital Market Master Plan

The Securities and Exchange Commission (SEC) will soon launch a 10-year strategic Capital Market Master Plan (CMMP) to deepen the country’s financial markets.

The plan hinges on four main pillars; creating diversity of investment products and enhancing liquidity in the securities market; increasing the investor base (through investor education); strengthening the infrastructure and improving market services, improving regulation, enforcement and market confidence.

The Deputy Director of SEC, Mr Paul Ababio, who announced this during a webinar on the theme, ‘Investing after the Financial Sector Clean-up’ yesterday said the commission had also broken down the strategic plan into three main strategic priorities.

These are education (public, employees and market operators), enforcement and market development.

“If you have rules and you don’t enforce them it can lead to a lack of confidence in the market. So, some of the actions we have taken recently are to show that as a regulator, together with other law enforcement agencies we will drive rules and regulations,” he said.

Mr Ababio said SEC was working to develop the capital market which would reflect in the products to be introduced over time.

“The master plan is tied to the real economy, so, we have mapped it to the various priorities which transcend the political cycle. Some of the priorities as a country are to increase manufacturing and the agricultural value chain.

“So, the Ghana Commodity Exchange (GCX) is one way we are looking to help people invest in agric,” he said.

He said the SEC had also prioritised strengthening of institutions and the rule of law based on the country’s stable democracy.

“How do we use it to drive the financial sector? Part of it really is achieving gender balance and education,” he said.

Another national priority, he said was technology adoption to enhance efficiency, and there the SEC was at the forefront of digitised trading on the capital market.

Mitigating risk

A Senior Lecturer at the University of Ghana Business School, Dr Elikplimi Komla Agbloyor, noted that there was risk in every venture but the most important was to be able to reduce it and manage during an investment.

“Risk drives returns. If you take impossible risk then you will reap impossible returns. You shouldn’t look for extreme returns when investing.

“If you invest in vehicles that promise you 12 and 15 per cent a month, that is outrageous. Nobody can really generate such returns for you with guarantee,” he urged.

As a risk mitigation measure, he said investors should try to avoid real chances of loss, and protect against anticipated risk factors, among others.

“Effective diversification and asset allocation strategies can reduce risk, sometimes without sacrificing expected return,” he said.

Need for investment

The maiden edition of the webinar on Investing after the Financial Sector Clean-Up was organised by Tesah Capital, an investment management company, to share knowledge on investment with the public and its clients.

The Managing Director of Tesah Capital, Mrs Eugenia Basheer, noted that the more knowledge people gained, the more empowered they became on their investment.

She said Tesah was incorporated in 2010 and envisaged a partnership with its clients that would result in creating and growing generational wealth.

She stated that the negative effects of the financial sector clean-up between 2018 and 2020 could not be ignored although it might have achieved its objective.

She said there had been causalities and many people understandably were apprehensive about investment.

“Not investing means losing great potential income, missing the chance to acquire a property, a secured retirement or the chance to leave a legacy of wealth.

“Investing is the only proven way in which you can sit back and watch your money grow for you. Investing, therefore, has not lost its benefit,” she said.