Ghana Stock Exchange to transform to company limited by shares
The Ghana Stock Exchange (GSE) expects to change its legal status from a mutual entity limited by guarantee to a company limited by shares by end of the year.
The process known as demutualization will change the ownership structure of the GSE from a non-profit member-based organisation into a profit-making corporation with share ownership structure.
Mr. Albert Essien, the Chairman of the Council of GSE, who announced this at the 29th AGM of the GSE, said consultations are currently ongoing with all stakeholders to ensure that the model for demutualization would be acceptable by all members.
He said the decision to demutualise the organisation was to meet best international practices.
Mr. Essien said the GSE would hold an Emergency General Meeting (EGM) to seek shareholders approval, once consensus was reached on the way forward.
He disclosed that, as part of the transformation agenda, GSE is in the process of finalising a three-year strategic plan to guide the medium-term operations of the Exchange.
Mr. Essien said a consulting company, Dwenimmen Group, has been contracted for the exercise and market-wide meetings were held with stakeholders for inputs into the strategic plan.
“The idea is to ensure that the strategic plan addresses effectively stakeholders` expectations and also lays out the transformational agenda of the GSE,” he said.
Mr. Essien said the Exchange has established a working relationship with the Singapore Stock Exchange. He also said GSE is in the process of signing a Memorandum of Understanding(MoU) with the Nairobi Stock Exchange, saying these alliances are aimed at exchanging ideas, technology and capacity building for the mutual benefits of all parties.
Touching on the performance of the Exchange, the Chairman of the GSE Council said the GSE Composite Index, which measured the performance of the entire market, ended the year with a negative 0.29 return compared with the 52.73 per cent recorded in 2017.
Volume of shares traded for the year 2018 was 201 million shares valued at GHC 659 million compared to the volume and value of 322 million shares worth GHC518 million recorded in 2017.
Market capitalisation for all listed securities stood at GHC 61.1 billion at the end of 2018 up from GHC 58.8 billion in 2017, representing an increase of 3.97 per cent.
Domestic market capitalisation also gained 56.28 per cent during the period, at GHC 25.4 billion compared to GHC 16.2 billion at the end of 2017.
“The Exchange once again continued to improve its financial performance and recorded a surplus of GHC11.97 million in 2018, a little lower than the surplus of GHC 12.37 million recorded in 2017. The GSE Reserve Fund also continued to grow,” Mr. Essien said.
Mr. Kofi S. Yamoah, the Managing Director of the GSE, said the GSE is on the path of strong sustainable growth.
“Even with lower world investor sentiment impacting the local market and the vulnerabilities of the Cedi against the US dollar, the Exchange achieved just about the same level profit after tax of GHC 11.97 million as was in 2017 and grew its net liquidity by 133 to GHC 18.93 million,” he said.
Mr. Yamoah said a number of far reaching initiatives are on line for 2019, including steps towards demutualization, plans to acquire a market surveillance system and support towards the introduction of formal repurchase agreement (REPO) market.
Source: GNA