The Director General (DG) of the Securities and Exchange Commission (SEC) of Ghana, Adu Anane Antwi, on Monday attributed the low liquidity on the Ghana Stock Exchange (GSE) to Ghanaian culture.

adu_anane_antwi? ?He observed that Ghanaians were generally not willing to dispose of property, no matter the condition or whatever financial opportunities were available to them.

Reacting to questions from the media on the cause of low liquidity on the Accra bourse, Antwi said the practice had made people with shares on the GSE hold tightly to them rather than trade in them.

?From our culture, anybody who sells houses or other property is considered a big fool,? he remarked.

The lack of liquidity on the GSE has been one of the worries of traders and brokers in recent times as in many cases institutional shareholders do not allow trading in their shares.

?Just as some ladies like to keep their collection of shoes, some Ghanaians won?t sell their landed property or trade their shares on the GSE,? he observed at the launch of this year?s Capital Markets Week celebration.

He added however that the subprime mortgage crisis, which started the global financial crisis, would not affect a country like Ghana since people generally kept their property to themselves, a practice that was not good for the GSE.

Deputy Managing Director (DMD) of the GSE Ekow Afedzie allayed lingering fears that there were incentives such as the waiver of the Capital Gains Tax for those who bought and traded shares on the exchange.

The SEC requires all listed companies to have a minimum of 100 million shares on the GSE.

?Henceforth, all newly listing companies would therefore be required to issue at least 100 million shares; with that, there will be more shares to be traded in on the bourse to ensure a higher liquidity,? Afedzie said.

He continued that the market was quite responsive to developments around the country, as demonstrated by the growth in its Composite Index.

?The GSE Composite Index grew by 44. 49 percent in the first quarter of 2013, compared with the 8.03 percent growth in the same quarter of last year, and this has been due to the good performance of its listed companies,? he explained.

The Financial Index (FI) on the bourse also grew by 49.23 percent in the first quarter, compared with the 5.50 percent growth experienced in the first quarter of last year.

Afedzie conceded that the reaction of the market to circumstances was not swift enough because there were not many people wanting to buy and sell on the exchange.? Enditem.

 

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