The Ghana Stock Exchange like most Exchanges in the world operated amidst the uncertainties in the global economy which were characterized by the slow recovery of the 2008 recession of the American economy and the current debt crisis in the euro zone which resulted in major austerity measures and bail outs in some countries. The Ghana Stock Exchange was however resilient and the effects of these uncertainties were mostly felt only in the last quarter of the year resulting in a negative return on index at the end of the year. Trading volume and values for the year 2011 were however higher than that recorded in 2010.
In 2011, the Ghana Stock Exchange implemented some major changes in its trading activities. To complement the automated trading regime, the Exchange extended its trading hours to afford dealers increased contact hours with their clients during the trading day and also to afford non-resident investors in time zones different from Ghana, greater opportunity to reach out to their local brokers. The new trading hours become 09.30hours GMT to 15.00 hours GMT from the existing 09.30hours GMT to 13.00hours GMT. This was expected to also help improve liquidity in the market place.
The Ghana Stock Exchange (GSE) also introduced a new method of calculating closing prices of equities on the market. Closing prices of listed equities from January 4, 2011 were calculated using the volume weighted average price of each equity for every given trading day. Hitherto, closing price was based on the last transaction price of listed equities. Two new indices were introduced on January 4, 2011 to replace the GSE All-Share Index which tracks price changes in the listed equities. The new indices were the GSE Composite Index (GSE-CI) and the GSE Financial Stocks Index (GSE-FSI).
These changes notwithstanding, trading volume and values of 419.79m shares and GH¢446.56m respectively recorded over the period of Jan-December 2011 were significantly higher than the volume of 330.13million shares and value of GH¢151.13million recorded over the same period in 2010. The volume of shares traded went up 27% while value of shares traded in 2011 represented 295% over the volume and values achieved in 2010 respectively.
The GSE-CI recorded -3.10% with 969.03 points whiles the GSE-FSI recorded -13.69% with 863.09 points at the end of December 2011. The GSE-CI however recorded its highest return of 18.89% (1188.91points) in June 2011.
Market Capitalization went up by136.59% from the December 2010 value of GH¢20.12billion to GH¢47.35billion. The increase was due mainly to the listing of Tullow Oil Plc and some additional listings.
In terms of primary issues, Tullow Oil Plc was the only IPO to be listed on the Exchange during the period under review. The company sold 3.53million shares at the IPO and raised GH¢109.48million. This brought the number of listed companies to 34. The Exchange recorded two de-listings: Accra Brewery Ltd and CFAO Ghana Ltd.
The GSE Securities Depository continued its educational drive towards immobilization of share certificates. At the end of December, 2011aproximately 49.37% of total listed shares had been mobilized and 64,845 accounts had been opened by investors in the Depository.
PROSPECTS FOR 2012
The key issues for the Exchange in 2012 include:
1) To reposition the GSE strongly in Ghana’s financial sector;
2) Listing of the first Exchange Traded Funds (NewGold ETF) on the GSE;
3) GSE Securities Depository to provide pre and post IPO services;
4) Develop and launch an Alternative market for the listing and trading of Small and
Medium scale industries;
5) Continue with our advocacy for a local content for Ghana which will ultimately
require companies in a number of sectors such as telecom, mining, energy, oil and
the financial sector to become public listed companies sharing their future with the
investing public.
