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GSE All-Share Index
Closing Level 819.14 31 May 99
Previous close 819.14 28 May 99
12 month high 1201.08 6 May 98
12 month low 818.17 7 May 99
All-time high 1201.08 6 May 98
All-time low 55.49 17 May 91
Major movements 1999
Guinness Ghana Ltd 16.9%
Fan Milk Ltd 13.6%
Ghana Commercial Bank -23.1%
Accra Brewery Ltd -23.5%
SSB Ltd -26.0%

Share price performance charts
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Ghana Stock Exchange
BACKGROUND

GHANA Stock Exchange (the Exchange) was incorporated in July 1989 with trading on its floor commencing in November, 1990. Since then, the Exchange has been progressively strengthening its facilities for businesses and the Government to raise long term capital as well as for investors to obtain liquidity, reasonable capital safety and diversity of investments.

The Exchange is governed by a Council with representation from Licensed Dealing Members (LDMs), Listed Companies, Banks, Insurance Companies, Money Market and the General Public. The Exchange also has a well qualifed and experienced management team.

During the five years of the exchange's operation, it has contributed considerably to the development of the capital market in Ghana and as a result the entire financial market is undergoing a transformation.
MEMBERSHIP

From an initial three promoters, the Exchange currently has fifty-two members made up of eleven Licensed Dealing Members (licensed stockbroking firms) and forty-one Associate Members.

LDM status is open to companies incorporated in Ghana under the Companies Code, 1963 (Act 179) and partnerships incorporated under the Incorporated Private Partnership Act, 1962 (Act 152). An LDM must have minimum fixed capital of C100 million and liquid funds of at least C10 million per director or partner. They must obtain a Certificate of Specification before commencing operations and finally, the firm must be licensed by the Securities Regulatory Commission.
LISTING

There are currently twenty (20) listed companies - all equities. All types of securities including foreign registered companies' securities can be listed. Three lists are available and small and medium sized companies are provided for. The criteria for listing include capital adequacy, profitability, spread of shares, years of existence, management efficiency etc.
TRADING AND SETTLEMENT

Trading takes place on the floor of the Exchange three times a week on Mondays, Wednesdays and Fridays starting at 10.00am. Trading in Ashanti Goldfields' shares also takes place over-the-counter. Trading on the floor of the Exchange has been under the call-over system since its inception. Delivery and Settlement system is centralised but not automated. The settlement period is currently T + 10 working days. A minimum of C850 is charged on trade value not exceeding C10,000. For trades greater than C50,000 a declining rate from 2.5% to 1% as the trade value increases is applied.
MARKET PERFORMANCE AND DEVELOPMENTS

The Exchange has so far performed remarkably well. Even though it is relatively much younger than most of the other African Stock Exchanges it seems to enjoy increasingly more attention and interest. There has been coverage by most of the major electronic and printed media interested in global financial news.

In terms of index performance, the Ghana Stock Exchange was the 6th best performing emerging stock market with capital appreciation modestly put at 116% for 1993.

Then in 1994, the Exchange was the best index performing stock market among all the emerging markets gaining 124.3% in its index level. However, in 1995, the index increased by a meagre 6.3% due mainly to high levels of inflation and interest rates prevailing in the country during the period. This year there has however, been an improvement.

As at 30th August, 1996, the index has risen by 20% and inflation is falling. The average rate of capital appreciation of 70% per annum since 1990 easily exceeds the annual rate of inflation in Ghana's economy for the period.

Steady improvements are being recorded continuously in trade volumes and values. From 1990 to 1992, only 4 million shares at about C350m were traded on the Exchange. However in 1994, alone, 93 million shares worth C73b changed hands. 55 million shares worth C27 billion were traded in 1995. This year, so far 24.2 million shares worth C22 billion have been sold in secondary trading.

Primary market activities too, have been on the ascendancy. Over Cl24 billion had been raised through the Exchange as at August 1996.

The simultaneous listing of Ashanti Goldfields Co. Ltd. (AGC) on the Ghana Stock Exchange and on the London Stock Exchange and the subsequent listing on New York, Toronto and Zimbabwe Stock Exchanges have given the Exchange a whole new international dimension and stature.

With its current market capitalization of some US$2 billion, the Ghana Stock Exchange, in terms of market capitalization, has become one of the largest sub-Saharan Stock Exchanges.

Significant developments have also taken place since the Exchange began its operations. The opening of the market to non-resident Ghanaians and foreigners in June 1993 was a big boost to the development of the market. Exchange Control permission was given to foreigners and non-resident Ghanaians to invest through the Exchange without prior approval. This has attracted a number of top-rated foreign institutional buyers.

The Government has also used the Exchange to privatise some state owned enterprises and banks. Notably amongst them were the Government's off-loading of its shares in Ashanti Goldfelds Company Ltd. (one of the largest mining companies in the world) and Ghana Commercial Bank one of the largest Banks in sub-Saharan Africa).

A long term debt market is being developed to enable the Government and corporate bodies to issue long term debt instruments. A comprehensive educational programme has been developed to upgrade the skills of professionals in the securities market.

The Exchange has improved upon the efficiency of its information dissemination and is now hooked to Reuters to enable investors have access to the Exchange's trading results and other developments. The Exchange is also on Internet and communication has been made easier both locally and internationally through e-mail.
OUTLOOK

The Exchange expects the Government to divest more State Owned Enterprises and Banks through the Exchange. The Exchange also expects more listings from the private sector. The forthcoming issues include National Investment Bank, Aluworks Ltd. and Home Finance Company Ltd. Housing Bonds.

Some corporate and government bonds are also expected to be issued and listed as part of the capital market's ongoing long term debt development programme.

Work on an automated Trading, Clearing and Settlement system is to commence soon. It is aimed at enhancing the efficiency of the trading, clearing and settlement system. As at now, the Exchange operates a centralised manual clearing and settlement system. Plans are also underway to develop some new financial products such as pooled funds, commodity futures and other derivatives.

Apart from the above prospective developments, various measures are also being adopted to develop the markets and they include: improving the legal/regulatory framework; improving market surveillance, conflict resolution and enforcement mechanisms and otherwise enhancing investor protection within the Exchange; and enhancing the skills and professionalism of the Exchange's personnel as well as those of all market operators at all levels; expanding the coverage of the Exchange's promotional activities within Ghana and abroad as well as market-related professional education and training programmes.

The Government, on its part, continues to pursue measures in the areas of taxation, macroeconomic policy, institutional and legal reforms as well as improvement in the infrastructure, among others, to enhance the investment environment.

All these measures being adopted and prospective developments should improve the attractiveness of the Ghana Securities Market as a foreign portfolio investment destination.