Friday, December 27, 2013

GSE Market Recap after Christmas

Losses in two banking stocks forced the GSE-Composite index downwards. The index closed the week at 2,142.79 from 2,146.02, bringing the year-to-date change to 78.61%. The financial stock performance benchmark also declined by 4.76 points to close at 1,783.75. 
A total of 0.05 million shares valued at GHS 0.07 million were traded. Trade volume and value declined by 99.59% and 99.74% respectively, from the previous session. HFC dominated trading with a 23.33% share of the total trade volume and 16.64% of the total value traded.
Fan Milk (FML) went up one (1) pesewa to close at GHS 6.61. Losses were recorded in CAL Bank, and GCB.
Courtesy GSE research and CBL.

Thursday, December 26, 2013

MERGER OF GSE SECURITIES DEPOSITORY COMPANY LTD & CENTRAL SECURITIES DEPOSITORY LTD GH

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) also 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.
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.
Highlights of the agreement are as follows:
The Central Securities Depository (GH) Ltd shall be the surviving entity.
Effective date of the merger is January 1, 2014.
The issued shares of 3,500,000 of the CSD will be maintained.
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.
A new Board of Directors will be appointed by the two shareholders to manage the affairs of the company. Mr. Stephen Tetteh, maintains his position as Chief Executive Officer while Mrs. 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 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.
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 cost 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 depository.
The registered office of the new entity will be on 4th Cedi House, Liberia Road, Accra.
Contact Numbers: 0302 689313/4
Courtesy: Ghana Stock Exchange.

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