GHANA STOCK EXCHANGE Bringing Companies and Investors Together. Presentation at ASEA Conference CAIRO – EGYPT 10 – 12 Sept By EKOW AFEDZIE GENERAL MANAGER GHANA STOCK EXCHANGE

INTRODUCTION Ghana is a peaceful developing country on the West Coast of Africa. The capital is Accra. Ghana is a democratic country – (Multiparty Democracy). Ghana has a population of approximately 20m. Prudent macroeconomic policies and strong agricultural performance have sustained steady economic growth over the past 5 years. Reforms have improved the business and regulatory environment.

INTRODUCTION GSE upholds all related internationally accepted principles. Good rule book – Listing, Membership, Trading, Clearing & Settlement Rules. GSE committed to transparency & adequate disclosure. Securities and Exchange Commission exists as a regulator to protect market and investors.

OVERVIEW OF GHANA STOCK EXCHANGE The Ghana Stock Exchange commenced operations in – Incorporated as a Company Limited by guarantee. The Exchange has no owners but members - two categories of members :- ­ Licensed Dealing Members (16) ­ Associate Members (33)

OVERVIEW OF GHANA STOCK EXCHANGE cont’d Structure ­ Sixteen (16) Licensed Stockbroking firms ­ Twenty eight (28) Listed Companies ­ Three (3) Registrars ­ Two (2) Custodians Products ­ Ordinary Shares (28) ­ Corporate Bonds (4) ­ Government Bonds (3)

OVERVIEW OF GHANA STOCK EXCHANGE cont’d Trading ­ Continuous Auction System – but Manual Clearing and Settlement ­ Manual but centralized ­ Settlement period is T + 3

OVERVIEW OF GHANA STOCK EXCHANGE cont’d Central Securities Depository Currently in operation but for Government Securities. -Equities to be introduced in 2006.

OVERVIEW OF GHANA STOCK EXCHANGE cont’d Listing – 3 Categories - 1 st, 2 nd and 3 rd Official Lists Provisional Listing approach permitted.

OVERVIEW OF GHANA STOCK EXCHANGE cont’d Market open to non-resident foreigners (NRF). One NRF has a maximum holding limit of 10% per listed security – maximum holdings of all NRF holdings in one security is 74%. (can be exceeded only when prior approval is granted). - Restrictions however do not apply to 3 companies. Free and full foreign exchange remittability. Taxation -10% final dividend withholding tax for all investors -No Capital gains tax -No stamp duty on transfer of shares.

MARKET PERFORMANCE Index Performance (% change) Up by-45.96% in % in % in % in 2005 (5/9/05) Great returns made by investors in the last four years.

MARKET PERFORMANCE con’t Market Capitalization -¢92, billion on September 5, 2005 (equivalent of US$10,171 million). Volumes and Values as at September 5, Volume: million -Value: ¢1, billion

STRATEGIC INITIATIVES FOR GROWTH Pursuit of listings more aggressively. -4 IPOs in 2004 and expecting more in the coming years. -Privatization of large State Owned Enterprises in the offing. -More banking stocks expected shortly.

STRATEGIC INITIATIVES FOR GROWTH Creating incentives for listing -Corporate tax rebate of 5% for newly listed companies during the first 3 years. -Discount on listings fees for small companies. Positioning the exchange as an attractive investment avenue to improve liquidity and increase trade volumes. -Extensive educational campaign. -Removing restrictions on non-resident foreign investors.

STRATEGIC INITIATIVES FOR GROWTH Improving efficiency of the market -Bank of Ghana has established a Central Securities Depository for all securities (equities to be admitted therein shortly). -Automation of trading, high on the agenda in Major review of entire GSE Rule Book almost completed.

CONCLUSION The vision is to make Ghana Stock Exchange more relevant in the economic development of Ghana through facilitation of long-term funds mobilization. -Expertise available -Economic Environment favourable for long term investments. -Investors invited to experience the Ghanaian hospitality as well as good returns on investments. Thank You