GHANA STOCK EXCHANGE Bringing Companies and Investors Together.

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GHANA STOCK EXCHANGE Bringing
Companies and Investors Together.

• Presentation at ASEA Conference
• CAIRO EGYPT
• 10 12 Sept. 2005

By EKOW AFEDZIE GENERAL MANAGER GHANA STOCK
EXCHANGE
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INTRODUCTION

• Ghana is a peaceful developing country on the
  West Coast of Africa.  The capital is Accra.
• Ghana is a democratic country (Multiparty
  Democracy).
• Ghana has a population of approximately 20m.
• Prudent macroeconomic policies and strong
  agricultural performance have sustained steady
  economic growth over the past 5 years.
• Reforms have improved the business and regulatory
  environment.

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INTRODUCTION

• GSE upholds all related internationally accepted
  principles.
• Good rule book Listing, Membership, Trading,
  Clearing Settlement Rules.
• GSE committed to transparency adequate
  disclosure.
• Securities and Exchange Commission exists as a
  regulator to protect market and investors.

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OVERVIEW OF GHANA STOCK EXCHANGE

• The Ghana Stock Exchange commenced operations in
  1990. Incorporated as a Company Limited by
  guarantee.
• The Exchange has no owners but members - two
  categories of members -
• Licensed Dealing Members (16)
• Associate Members (33)

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OVERVIEW OF GHANA STOCK EXCHANGE contd

• Structure
• Sixteen (16) Licensed Stockbroking firms
• Twenty eight (28) Listed Companies
• Three (3) Registrars
• Two (2) Custodians
• Products
• Ordinary Shares (28)
• Corporate Bonds (4)
• Government Bonds (3)

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OVERVIEW OF GHANA STOCK EXCHANGE contd

• Trading
• Continuous Auction System but Manual
• Clearing and Settlement
• Manual but centralized
• Settlement period is T 3

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OVERVIEW OF GHANA STOCK EXCHANGE contd

• Central Securities Depository
• Currently in operation but for Government
  Securities.
• - Equities to be introduced in 2006.

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OVERVIEW OF GHANA STOCK EXCHANGE contd

• Listing 3 Categories
• - 1st, 2nd and 3rd Official Lists
• Provisional Listing approach permitted.

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OVERVIEW OF GHANA STOCK EXCHANGE contd

• Market open to non-resident foreigners (NRF).
• One NRF has a maximum holding limit of 10 per
  listed security maximum holdings of all NRF
  holdings in one security is 74. (can be exceeded
  only when prior approval is granted).
• - Restrictions however do not apply to 3
  companies.
• Free and full foreign exchange remittability.
• Taxation
• - 10 final dividend withholding tax for all
  investors
• - No Capital gains tax
• - No stamp duty on transfer of shares.

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MARKET PERFORMANCE

• Index Performance ( change)
• Up by - 45.96 in 2002
• - 154.67 in 2003
• - 91.33 in 2004
• - -28.14 in 2005 (5/9/05)
• Great returns made by investors in the last four
  years.

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MARKET PERFORMANCE cont

• Market Capitalization
• - 92,128.40 billion on September 5, 2005
  (equivalent of US10,171 million).
• Volumes and Values
• as at September 5, 2005
• - Volume 856.93 million
• - Value 1,868.02 billion

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STRATEGIC INITIATIVES FOR GROWTH

• Pursuit of listings more aggressively.
• - 4 IPOs in 2004 and expecting more in the
  coming years.
• - Privatization of large State Owned
  Enterprises in the offing.
• - More banking stocks expected shortly.

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STRATEGIC INITIATIVES FOR GROWTH

• Creating incentives for listing
• - Corporate tax rebate of 5 for newly listed
  companies during the first 3 years.
• - Discount on listings fees for small
  companies.
• Positioning the exchange as an attractive
  investment avenue to improve liquidity and
  increase trade volumes.
• - Extensive educational campaign.
• - Removing restrictions on non-resident foreign
  investors.

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STRATEGIC INITIATIVES FOR GROWTH

• Improving efficiency of the market
• - Bank of Ghana has established a Central
  Securities Depository for all securities
  (equities to be admitted therein shortly).
• - Automation of trading, high on the agenda in
  2006.
• - Major review of entire GSE Rule Book almost
  completed.

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CONCLUSION

• The vision is to make Ghana Stock Exchange more
  relevant in the economic development of Ghana
  through facilitation of long-term funds
  mobilization.
• - Expertise available
• - Economic Environment favourable for long term
  investments.
• - Investors invited to experience the Ghanaian
  hospitality as well as good returns on
  investments.
• Thank You