Analysing the vital role played by Stock Exchanges

Stock Exchanges play a critical function in today ‘s free-market economic systems. They facilitate capital transportations from less productive to more productive companies supplying resources for turning industries and lending to the overall growing of the economic system. However, stock exchanges have non ever been what they are today.

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History

In the 2nd half of the twentieth century, there was a recognizable market for covering in securities in Ghana. The thought of set uping a stock exchange in Ghana took several old ages before it was eventually launched in July1989 as a private company limited by warrant under the Companies codification of Ghana, 1963 ( Act 179 ) . This was bit by bit formalised under the chairmanship of Dr. G. K. Agama who was so the governor of the bank of Ghana with other 10 member National Committees. The Company subsequently became a recognized authorised Stock Exchange under the Stock Exchange Act of 1971 ( Act 384, )

The Ghana Stock Exchange ( GSE ) was incorporated in July 1989 with trading commencing in 1990. It presently has around 35 listed companies and 5 corporate bonds. The fabrication and brewing sectors dominate the exchange. A distant tierce is the banking sector while other listed companies fall into the insurance, excavation and oil sectors. Most of the listed companies on the GSE are Ghanese but there are some multinationals.

All types of securities can be listed. Criteria for naming include capital adequateness, profitableness, Spread of portions, old ages of being and direction efficiency. Since its origin, the GSE ‘s public presentation has varied well. All listings are included in the chief index. In 1993, the GSE was the 6th best index executing emerging stock market, with a capital grasp of 116 % . In 1994, it was the best index executing stock market among all the emerging markets, deriving 124.3 % in its index degree.

It recorded its highest turnover of equities in volume in 1997, with 125.63 million portions. In 1995 index growing was a dissatisfactory with 6.3 % , partially because of high rising prices and involvement rates. Growth of the index for 1997 was 42 % and at the terminal of 1998 it was 868.35.7 to 91.45 million in 1998, 49.57 million in 1999 to 30.72 million in 2000. In 2001, the volume increased to 55.3 million, fell to 44.12 million in 2002, inched up to 96.33 million in 2003 and 104.35 million in 2004. The All-Share Index, by the stopping point of 2006 topped public presentation of stock markets in the universe with output of 154.7 per centum. The Exchange in 2009 recorded a 58.3 per centum addition in excess of income over outgo of 1.64 million Ghanese cedis as against 0.24 million Ghanese cedis recorded in 2008 which was among the best worldwide.

Listed Companies

There are about about 35 listed companies on the Ghana Stock Exchange. Some of the listed companies with their trading symbols are

AngloGold Ashanti Limited ( AGAs ) , Accra Brewery Company Ltd ( ABL ) , Enterprise Insurance Company Ltd ( EIC ) , Aluworks Ltd ( ALW ) , Cal Bank Ltd ( CAL ) , Ecobank Ghana Ltd ( EGB ) , Cocoa Processing Company ( CPC ) , African Champion Industries Ltd ( ACI ) , Ecobank Transnational Incorporation ( ETI ) , Fan Milk Ltd ( FML ) , Standard Chartered Bank Ghana Ltd ( SCB ) , SIC Insurance Company Limited ( SIC ) , Starwin Products Ltd ( SPL ) , Sam Wood Ltd ( SWL ) , Trust Bank Ltd ( TBL ) , Total Petroleum Ghana Ltd ( TOTAL ) , Unilever Ghana Ltd ( UNIL ) ,

Merchandise Buying Company Ltd ( PBC ) , Mechanical Lloyd Company Ltd ( MLC ) , Ghana Commercial Bank Ltd ( GCB ) , HFC Bank Ltd ( HFC ) , Ghana Oil Company Ltd ( GOIL ) , Clydestone Ghana Ltd ( CLYD ) , ECT.

Structure of Ghana Stock Exchange

There are three classs of members, viz. Licensed Covering Members, which is a corporate organic structure licensed by the Exchange to cover in all securities. Associate Members who besides deals with the demands of the rank but is non licensed to cover in securities and Government Securities Dealers which is a corporate organic structure approved by the Bank of Ghana and registered by the Exchange to cover merely in authorities securities.

Functions of Ghana Stock Exchange

The Ghana Stock Exchange purposes at continuing the highest criterions of market unity, professionalism and best patterns in the behavior of concern in order to reenforce investor assurance. The fiscal services Act is intended as a system of ordinance covering the full Stock Exchange, from the largest bank to the smallest investing adviser. It is intended to guarantee that

Facilitate the just trading of bonds, stocks and other types of securities to the populace for purchase and gross revenues and stipulates the types of companies that can name their stock.

to command the granting of citations on the securities market in regard of bonds, portions and other securities of any company, corporation, authorities, municipality, local authorization or other organic structure corporate,

To understate the hazard of puting by guaranting that the houses which obtain a citation abide by high criterions and conform to strict regulations.

To co-operate with associations of stockbrokers and Stock Exchanges in other states and to obtain and do available to members information and installations likely to be utile to them or to their clients

Purpose of Ghana Stock Exchange

its aid authorities to raise capital for development undertakings, substructure undertakings such as sewerage and H2O intervention works or lodging estates

It creates investing chances for little investors by enabling them to ain portions of the companies as big investors and to bask similar rates of return.

Companies can spread out merchandise lines, addition distribution channels, hedge against volatility, increase its market portion or get other necessary concern assets.

Stock Exchange has aid Ghana in redistribution of wealth through stock monetary value additions and dividends get a opportunity to portion in the wealth of profitable concerns

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