Central depository merger in Ghana

December 24, 2013 by

The Central Securities Depository GH and GSE Securities Depository Company are to merge with effect from the beginning of 2014. The Central Securities Depository (GH) Ltd shall be the surviving entity with the effective date of the merger is January 1, 2014. Bank of Ghana will own 82% of the new company and transfer 18% to the Ghana Stock Exchange. The Ghana Stock Exchange will be allowed to increase its shareholding up to 30% within one (1) year at a price existing at the time of the merger.

The merged entity will handle securities listed and unlisted on the Ghana Stock Exchange as well as Government of Ghana and Bank of Ghana Instruments, Cooperate Bonds and Money Market Instruments. It will also operate the registrar services under the licence granted by the Securities and Exchange Commission.

“The merger will provide a common depository platform for the two institutions and harmonisation of trading as well as clearing and settlement practices. This will generate benefits and thus create significant additional value for all market participants,” a release from the Ghana Stock Exchange said.

“The merger will make for a more efficient trading of fixed income and equity securities and reduce operational cost for the merged depository and lower transaction costs for market participants. It will also make the market more attractive to investors. Investors will maintain only one account for all their portfolio. The resources of the shareholders, Bank of Ghana and Ghana Stock Exchange can be pooled together to build a state-of the-art infrastructure to modernise the operations of the depositor.” the release went on to state.

A new Board of Directors will be appointed by the two shareholders to manage the affairs of the company. Stephen Tetteh, maintains his position as Chief Executive Officer while Melvina Amoafo, the current Executive Director of the GSE Securities Depository Company assumes the position of Deputy Chief Executive. All staff of the GSE Securities Depository Company will be absorbed into the new company.

The Central Securities Depository GH Ltd was established in 2004 to manage the issue, redemption and maintain the records of ownership of securities issued by Government of Ghana, Bank of Ghana and the Ghana Cocobod. The Central Securities Depository is wholly owned by the Bank of Ghana.

In 2008, the Ghana Stock Exchange (GSE) established the GSE Securities Depository Company Limited (GSD) as a subsidiary to provide custody for securities listed on the Ghana Stock Exchange and also to provide for the dematerialization of share certificates.

“It has been realised that the capital market in Ghana is not big enough to be served by two depositories. The Ministry of Finance facilitated discussions since 2010 between the Bank of Ghana and the Ghana Stock Exchange towards a merger of the two subsidiaries,” the release said.

In April 2013, a Transaction Advisor was engaged to advise on the process. The Due Diligence Reports and Valuations Reports of the Transaction Advisor were accepted by the Boards of the Bank of Ghana and the Ghana Stock Exchange.

Related posts | Ghana Stock Exchange rated best performing in Africa

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Ghana GDP up strongly to June

December 24, 2013 by

Ghana’s Real Quarterly GDP for the second quarter of 2013 grew by 6.1%, (year-on-year) compared to 6.7% recorded in the first quarter. The Services sector recorded the highest growth of 9.2%, followed by the Industry Sector 2.5%, while the Agriculture sector showed a negative growth of 3.9% (see Table 1).

The positive growth recorded by the Services sector was due to increases in Information and Communication activities, and Real Estate, Professional, Administrative & Support Service activities. Financial and Insurance activities (27.5%), Information and Communication activities (24.5%) and Public Administration (19.7%) were the main contributors to the Services sector.

The main contributors of the Industry sector were Mining and Quarrying (29.1%); followed by Electricity (9.4%) and Construction (6.8%).

Image courtesy of wandee007/FreeDigitalPhotos.net

Image courtesy of wandee007/FreeDigitalPhotos.net

The Mining and Quarrying subsector within the Industry sector, recorded a growth of 3.7% due to the increase in the production of Oil and its development activities and Diamond over the first quarter. However, the manufacturing subsector recorded a negative growth of 19.8 percent, partly due to lower production in the food, beverages, and tobacco division, refined petroleum products, and chemicals and chemical products division.

Key findings of the performance in the Agriculture sector for the 2nd quarter of 2013 compared with the 2nd quarter of 2012 are Fishing (2.9%), the only subsector with positive growth, while the Crops and cocoa (-1.4%), Livestock (-12.6%) and Forestry and Logging (-8.6%) subsectors contributed negatively to the sector.

In the Agriculture sector, economic activity in the crop subsector reflected a positive growth of 1.5 percent due to its seasonal pattern (planting season). Economic activities in the Livestock, Forestry and logging, and Fishing subsectors recorded negative growths partly due to their seasonal patterns.

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GSE: Stocks up for week

November 25, 2013 by

The Ghana Stock Market is up 77.71 percent so far this year to the week ending November 22, a marginal increase over the 77.36 percent gained registered up to the week before with the market index moving up to 2,132.01 points at the end of the week from the prior week’s 2,127.79 points. The financial index that closed at 1,778.22 points at the end of November 15, is now up to 1,782.43 for a 71.41 percent gain for the year to date.

During the week, 8 stocks rose versus 4 that recorded declines a much improved position compared to the prior week when there were 6 declining stocks to 2 that advanced.

ghana-flag150x150Cocoa Processing Company gained 50 percent to end the week at Gina Harrison¢0.02; Ecobank Transnational gained 6 percent to close at Gina Harrison¢0.18; HFC Bank Ltd, the bank that Trinidad’s Republic Bank has 40 percent ownership in, which gained 6.4 percent during the week ending November 15 gained a further 8 percent to close at Gina Harrison¢0.90. The week before it gained 13 percent and is now up 100 percent for the year to date. Mechanical Lloyd Company that sells and services BMW cars and motor cycles, Ford vehicles, Massey Ferguson agricultural machinery and Delphi products gained 5 percent to be up 153 percent year to date. Ayrton Drugs Manufacturing Company recorded a 6 percent gain.

Aluworksm an aluminium continuous casting and cold rolling company, lost 20 percent of its value during the week to close at GH¢0.05 and Benso Oil Palm Plantation lost 19 percent to close at GH¢3.20.

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GSE: Stocks up 77%

November 16, 2013 by

The Ghana Stock Exchange is up 77.36 percent so far this year with the market index moving up to 2,127.79 points at the end of this week.

The financial index is at 1,778.22 points for a 71 percent gain for the year to date. During the week, only two stocks rose versus 6 that recorded declines, an unfavourable position compared to the prior week when there were 10 declining stocks to 8 that advanced. Changes in price was marginal in most cases during the past week.

HFC Bank Ltd, the bank that Trinidad’s Republic Bank has 40 percent ownership in, gained 6.4 percent during the week to close at GH¢0.83, the week before it gained 13 percent. Generally, price movements last week were more pronounced, ranging from a 25 percent drop in the price of Transol Solutions (Ghana), a 9 percent decline in Societe Generale Ghana and 6 percent fall in Ayrton Drugs Manufacturing Company and Ecobank Transnational and a 7 percent gain in Standard Chartered Bank Ghana Ltd.

Related posts: Republic ups stake in Ghanaian Bank |  Ghana chucking along, up 76.72% 

Image courtesy of Domdeen/FreeDigitalPhotos.net

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Ghana stocks now up 71.4%

October 14, 2013 by

Friday 11th October 2013 | The Ghana Stock Exchange closed the week on Friday at 2,056.27 points gaining more than 36 points for the week as 11 stocks recorded prices gains and 2 declined.

The market gained 71.4% year to date according to data from the stock exchange. During the week Guinness Ghana Brewery gained 14 percent as the price moved up by GH¢0.75 to close at GH¢6.20; the PE for Guinness is around 7 times 2013 earnings. Sam Woode Ltd, involved in publishing of educational books, printing and related businesses went up 50 percent but that was from GH¢0.02 to GH¢0.03; the last financial statements seen for Sam Woode is for 2010.

HFC Bank Ltd, the bank that Republic Bank in Trinidad now owns 40 percent, climbed by 5 percent to GH¢0.68 and Mechanical Lloyd Company gained 5 percent to end at GH¢0.33. Mechanical Lloyd are the exclusive agents for the sale and servicing of BMW cars and motor cycles, Ford vehicles, Massey Ferguson agricultural machinery and Delphi products in Ghana.

The Cedi is the Ghana currency, approximately GH¢2 to the US dollar.

Related posts | Big gains in Ghana Stocks | Republic ups stake in Ghanaian Bank | Ghana Stock Exchange rated best performing in Africa

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Big gains in Ghana Stocks

October 6, 2013 by

The Ghana Stock Market is up 68 percent for the year to the end of September, even as interest rates were raised from 11 percent to 21 percent on T-bills in response to depreciation of the local currency. The increase in T-bill rates took effect last year and for most of 2013.

Ghana’s economy grew by 7.9 percent last year and is projected to grow 7 percent in 2013, this according to the statement made by the International Monetary Fund  on Wednesday. Notwithstanding the forecast for strong growth, the funding agency said, “It will be difficult for Ghana to keep its budget deficit below 10 percent this year.” However, the government says its deficit will fall to 9 percent this year from 12.1 percent in 2012.

Bank_Ghana150x150One key risk for the economy of Ghana, an exporter of cocoa, gold and oil, is its current account deficit, which will rise to 13 percent of gross domestic product this year, the IMF said.

Headline inflation stayed within the target range of 8.5 per cent ± 2 per cent in 2012 but has climbed to 11.5 percent in August this year. Monetary policy faced a major challenge of dealing with a rapidly depreciating currency in the first half of 2012. Monetary policy was tightened thus moving rates from 11 percent to 21 percent on Treasury Bills. The exchange rate slipped from 1.64 cedi to the US dollar to 2 cedi to the US dollar.

GhanaStocksIt against this background that several stocks listed on the Ghana Stock Exchange recorded sharp gains with 7 gaining more than 100 percent with the star performer being PZ Cussons, a company that manufactures and distributes soaps and electricals, rising 400 percent and Enterprise Group, a business development and management consultancy company, rising by 298 percent.

See chart for the listed stocks and their gains.

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