Governor Addison optimistic about improved fortunes for Ghana Stock Exchange
The Governor of the Bank of Ghana, Dr. Ernest Addison, has expressed confidence that the positive economic outlook of the country will ultimately improve the fortunes of the Ghana Stock Exchange (GSE), despite its recent sluggish performance. The GSE Composite Index recorded a decrease of approximately 13% at the end of last year, compared to a 43.66% gain in 2021. The Governor’s optimism is based on his view that a robust economy will boost the fortunes of the GSE, which has recently faced headwinds due to a variety of factors.
During a recent courtesy call by a delegation led by the Managing Director of the Ghana Stock Exchange (GSE), Abena Amoah, the Governor highlighted the role of the Domestic Debt Exchange Programme (DDEP) in facilitating fiscal consolidation. The Governor emphasized the importance of macroeconomic stability and sustainable growth, which he believes will be achieved through the private sector’s leadership, supported by an enabling environment provided by the state. Furthermore, he urged the GSE to collaborate with ARB Apex Bank Limited to promote rural and community banks’ listing.
While the GSE’s recent performance has been sluggish, financial analysts, including those at Databank Research, are forecasting a potential return of up to 12% for investors this year. The MD of the GSE, Abena Amoah, highlighted the decrease in equities trading on the local bourse of about 13% in 2022 compared with the previous year. She noted, however, that the largest value of approximately GH¢1.3billion was traded in 2022. This was attributed to MTN Ghana floating more of its shares on the stock exchange. Additionally, the MD stated that about GH¢230billion was traded in securities, which was low compared to the previous year.
The MD of the GSE also commented on the impact of the Domestic Debt Exchange Programme (DDEP) on investor confidence. She noted that the DDEP, implemented by the government as a condition for the International Monetary Fund (IMF) bail-out program, had eroded investor confidence in the country. To address this issue, the MD emphasized the need for increased financial literacy engagements, availability of sufficient investment information, and the diversification of products on the market.
The MD also highlighted the GSE’s admission as a full member of the World Federation of Stock Exchanges in 2022. This move has placed the GSE on par with major players in the global stock exchange space, a significant accomplishment for the GSE.
In addition to the above, the MD of the GSE stated that the GSE intends to collaborate with the central bank and other stakeholders to form a committee for the formalization of the foreign exchange market. Such a move would help to increase transparency and liquidity in the foreign exchange market and provide a conducive environment for investment.
The GSE has recently faced challenges, including a sluggish performance and eroded investor confidence due to the DDEP. However, the Governor’s optimism is based on the positive economic outlook, which he believes will improve the fortunes of the GSE. The MD of the GSE has also outlined several measures aimed at improving investor confidence, including increased financial literacy engagements, availability of sufficient investment information, and diversification of products on the market. The GSE’s admission as a full member of the World Federation of Stock Exchanges is a significant accomplishment and will help to place the GSE on par with major players in the global stock exchange space. Finally, the GSE’s collaboration with the central bank and other stakeholders to form a committee for the formalization of the foreign exchange market is a positive step towards increasing transparency and liquidity in the foreign exchange market.
