CAPITAL MARKETS 101
Capital markets are markets for the trading of financial instruments such as stocks, mutual funds and bonds. Capital markets serve as a means of channeling funds from investors to users of capital such as government, businesses and individuals.
Capital markets are made up of primary markets and secondary markets. With primary markets, new stock and bond issues are sold to investors while secondary markets trade existing securities.
In considering capital market securities (i.e. securities with maturities greater than one year) let’s delve more into Shares, Bonds and Mutual Funds.
SHARES
Shares are units of ownership interest in a company or financial assets. The two main types of shares are common shares and preferred shares.
Currently, there are forty-four (44) stocks/ shares listed on the Ghana Stock Exchange.
| STOCK | NUMBER OF LISTED STOCKS | EXAMPLES |
| COMMON SHARES | 37 | EGH, GOIL, SOGEGH, FML |
| GHANA ALTERNATIVE MARKET | 4 | MMH, HORDS, IIL |
| PREFERRED SHARES | 1 | SCB PREF |
| DEPOSITORY SHARES | 1 | AADS |
| EXCHANGE TRADEABLE FUNDS | 1 | GLD |
BONDS
Bonds are debt investment in which an investor loans money to an entity either corporate or governmental, which borrows the funds for a defined period of time at a variable or fixed interest rate. An owner of a bond is a creditors of the issuer.
Below are a few examples of Government of Ghana 3-year and 5-year bonds.
| Issue No. | ISIN | Value(million) | Coupons % | Maturity |
| 1434 | GHGGOG039579 | 570.70 | 23.47 | 21/05/2018 |
| 1456 | GHGGOG041005 | 994.86 | 24.5 | 22/10/2018 |
| 1347 | GHGGOG032681 | 649.96 | 19.04 | 24/09/2018 |
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There is still a whole universe yet to explore in terms of the above securities. Contact a FINANCIAL ADVISOR TODAY for more details.Â
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