… as GH¢200bn GFIM set for boost
Regulator of asset managers, the Securities and Exchange Commission (SEC), has added another feather to its hat following the launch of a financial technology tool – CediManager – which had been subjected to its regulatory sandbox framework.
The CediManager, an investment application developed and owned by Fincap Securities Limited, an investment banking and advisory firm, aims to allow investors to trade fixed income securities – Treasury bills, notes, bonds and cocoa bonds – remotely.
In his address at the formal launch, Director-General of the SEC, Daniel Ogbarmey Tetteh – who was represented by Head of Department (HoD) in charge of Broker-Dealers and Advisors at the SEC, Francis Boadu – said the commission had long-identified technology as the primary driver of a wholesome financial and investment landscape.
He noted that this informed the SEC’s decision to introduce guidelines in 2020, saying: “It is in recognition of this that the commission – pursuant to its mandate to promote the growth of an efficient, fair and transparent market that seeks to encourage more creativity so that promising innovations, products and services can be tested in the market with prospects for wider adoption in the country and abroad – issued the regulatory sandbox guidelines”.
The DG said his outfit will continue to keep a keen eye on developments in the rapidly-evolving digital assets space, and was optimistic about the further deployment of technology to deepen the capital market.
He stated that this will be crucial to the actualisation of the Capital Market Master Plan (CMMP), which he said is progressing steadily with the activation of a steering committee and four working groups drawn from a wide range of stakeholders.
The Head of the Ghana Fixed Income Market (GFIM), Augustine Simons, said the application will help demystify and simplify trading in government securities. “We are very glad that this product has come to the market as it will deepen investor participation in the fixed income segment, and drive innovation,” he said, noting that the segment has grown exponentially since inception, with room for further growth.
Since its introduction in 2015, GFIM saw trade volumes rise from 5.2 billion to 16.9 billion in the following year. The market’s volume of trade grew by 81 percent in 2017 to hit 30.7 billion and reached 37.9 billion in 2018.
The upward trajectory continued in 2019 and 2020 as volumes reached 55.5 billion and 108.4 billion respectively. 2021 saw a 95.21 percent appreciation over the previous year at 208.8 billion, valued at GH¢; and at the end of July, was already 11 percent higher than the comparable period in 2021.
On his part, Chief Executive at Fincap, Geoffery Maison, said the application was borne out of the desire to “take investments to the doorsteps and fingertips of investors”.
He said his outfit was alarmed by data from the SEC which suggested that as much as 90 percent of regulated investment outlets were centred in Accra, with some regions scarcely having any, adding that the comparatively lower risk associated with fixed income makes it ideal for all classes of investors.
“With an opportunity to leverage modern technology, we decided to bridge the gap between excess public funds and the capital market, where there was a growing but low patronage of investments… Approximately only 58 percent of adults in Ghana own a transaction account, as millions are geographically excluded from the coverage of most investment firms… According to our research, aside from the Greater Accra Region, some regions had less than ten investment firms; some, none. Adults in these disconnected areas must travel to physical locations miles away from their residences to invest,” he explained.
“Potential investors hold on to their funds while the markets stay begging, with great investment opportunities remaining untapped… The tedious process of investing has also been a deterrent to the public – the long queues at the offices of investment firms, the long-read documents requiring that you read before you sign, and the complex explanations from the customer representatives,” Mr. Maison added.