By Ebenezer Chike Adjei NJOKU [email protected]
Managing Director of the Ghana Stock Exchange (GSE), Abena Amoah, has pointed to the performance of the equities front as well as improving activity on the debt market as evidence of a turnaround in investor sentiments.
Speaking during a ceremony to mark the listing of Letshego Ghana Savings and Loans’ GH¢500million Medium-Term Note Programme on the GSE’s Fixed Income Market (GFIM), she highlighted the performance of GSE’s Composite Index, which had closed trading on Monday, April 15, 2024, with a 1-week gain of 1.51 percent, a 4-week gain of 4.61 percent, and an overall year-to-date (YtD) gain of 11.95 percent.
The bullish trend further extends to the fixed-income market, which is demonstrating signs of a post-DDEP (Domestic Debt Exchange Programme) recovery. YtD trading volume has jumped significantly to GH¢40.69 billion, compared to GH¢24.76billion for the same period in 2023.
“This resurgence not only reflects renewed investor confidence but also underscores the market’s ability to navigate challenges and seize opportunities,” Ms. Amoah remarked.
Letshego’s listing, she continued, is a prime example, injecting depth and diversity into the market while attracting new investors and bolstering liquidity.
Ms. Amoah’s optimism extends beyond the current listing. She announced the impending launch of a Commercial Paper Market at the GSE, alongside a suite of new products and services. These include securities lending and borrowing, asset-backed securities, margin trading, market making and updated underwriting and issuing house rules.
These advancements, coupled with the ongoing fixed-income market recovery, she added, represent a strategic leap toward a more dynamic and liquid market with increased investor participation.
The focus, the GSE MD explained, is not just on creating a wider range of investment opportunities but also on establishing Ghana as a regional hub for innovative financial solutions.
This, she believes, will contribute to sustainable economic growth.
“Together, we are poised to chart a prosperous course for the Exchange, fostering lasting value and prosperity for all stakeholders involved,” she stated.
Proof of confidence
Similar sentiments were expressed by Letshego’s Country Chief Executive Office, Nii Amankra Tetteh, who said the successful outing – oversubscription at a competitive rate – has cemented his outfit’s reputation as a trusted issuer in the domestic growing capital market, since its entry in 2015.
“This successful funding round is a testament to the confidence and trust placed in the Letshego Ghana brand by our investors,” he said of the issuance, which had Stanbic Bank and Black Star Brokerage acting as joint lead arrangers and co-sponsoring brokers.
The issuance, consisting of a 2-year fixed-rate note and a 4-year floating-rate note, garnered strong investor interest despite a challenging economic climate with high-interest rates. Notably, the bond attracted bids exceeding GH¢141million, surpassing the target amount by 41 percent.
This level of participation, with nearly 16 percent coming from new investors, underscores Letshego Ghana’s established reputation as a reliable issuer in Ghana’s dynamic capital market, Mr. Tetteh noted.
He added that the success of this bond offering highlights the growing importance of domestic capital markets as an alternative funding avenue for Ghanaian businesses. It further reinforces Letshego’s position as a valuable provider of inclusive financial solutions.
The pricing of the notes reflects this confidence, with the fixed-rate option set at 22 percent and the floating-rate note priced at the 182-day T-bill rate with a 100 basis point spread.
“This capital injection allows us to expand access to much-needed financial solutions for more Ghanaians, fostering economic and social impact through productive lending across communities,” Mr. Tetteh further stated.
