With a 56.17 per cent rally in 2024, making it the best performing equities market, analysts say they expect the Ghana Stock Exchange to sustain the gains this year driven by robust corporate earnings, improved investors sentiments. Abena Amoah, the CEO of the GSE, joins CNBC Africa to discuss what to expect in the market and a review of the 2024 performance.
With a 56.17 per cent rally in 2024, making it the best performing equities market, analysts say they expect the Ghana Stock Exchange to sustain the gains this year driven by robust corporate earnings, improved investors sentiments. Abena Amoah, the CEO of the GSE, joins me to discuss what to expect in the market and a review of the 2024 performance. Abena, thank you so much for taking the time to join us today. Thank you very much Esther for having us. First of all, let me congratulate you on winning the award for best stock exchange for economic growth in West Africa. Congratulations on that award. Thank you so much. The whole market deserves this praise. All capital market players worked very hard for this and I'm happy to see our efforts being recognised. Right. Now, I mean, 57.16 per cent on the year, making the GSE the best performing stock market in West Africa. To what would you attribute this performance to? I think the market, a lot of the investments we've been making over the years in terms of engaging the market, executing a lot of financial literacy programmes, bringing some diversification into the market for different products, getting more companies that are profitable, that are responsive to investors, that share information with investors, over the last few years, are beginning to see these efforts are beginning to bear fruit. So we saw that last year there was a lot of search for companies like MTN Shares. The financial stock index was also up 25 per cent, our highest since 2017. And all of these work around engaging our fund managers, engaging with our institutional investors who were looking for new ways to invest after the government GDP, where governments had haircuts on some of the bonds or government bonds, has resulted in this performance that we've seen in 2024. And our work at the GSE is to continue to facilitate and educate the market and bring products that meet investor needs to sustain these type of programmes and provide a real profitable investment opportunity on the market to investors. Right. Now, let's quickly look ahead to 2025. Could you briefly speak on the GSEs or your plans for, key plans for the GSE this year? For 2025, we will continue to focus on our key strategic areas. And here I want to share a few of them with you. One of them is to continue to innovate. Last year we introduced a commercial paper market, as well as in response to the market's demand for other areas in which they can raise capital without necessarily going through the public sector route. We also introduced the OTC market, which can also function as a private market. And so for 2025, our focus is to continue on the innovation angle. And then our key focus, one, is to continue to improve our technology. So this year we will be launching with the CSD, our associate company, a new CSD central securities depository software, which will help investors manage many of their accounts, open accounts, et cetera. And we believe that this will be a big boost to the market. The new CSD system that will go live this year has various functionalities that should see the pickup of products and people on the market. And the GSE itself is also investing in new systems this year. So we are coming to market with an RFP to improve our technology. That is a critical area for us. I wanted to ask you, I mean, your outlook for the IPO market and what the GSE is doing specifically to encourage new listings on the boards. We spent the last four years with the private sector and with government institutions, the state-owned enterprises, to work on a program to prepare them to get them to market. And we are building a healthy pipeline of companies that are going to be able to approach more works. Last year we saw the coming to market of one of our biggest private family-owned companies, Casa Pueblo, which came to the public for the first time and issued a corporate warrant as well, which was hugely successful. We expect this to continue and some of the companies in our pipeline to come onto the market in 2025. Our engagement with also international companies that have significant operations in Ghana, like Atlantic Lithium, and prior to that Asante Group, their secondary listings on the market will continue. So we expect to see more of those happen on the market, giving local investors access to these, to the securities of these companies. The final leg of that is with our state-owned enterprises. As you know, we have a new government in place. One of their key agendas brings back economic prosperity and we believe that the state-owned enterprises can continue to use the GSE as an avenue to raise capital and have stronger governance practices. So these are some of the ways in terms of increasing listings. Right. Now, as you know, it's often said that the stock exchange should be a good reflection of the economy in having key sectors of the economy, companies represented on the boards. Would you say that, to what extent is this a case for the GSE? And are there particular companies that you're eyeing in terms of attracting them to a com list on the boards to better reflect the economy? That's great. No, I do not believe we're there yet. There's still a lot of work for us to do in attracting more companies in the services sector, completing all the companies in the financial services sector, especially in the market. We believe technology, the tech sector is another area we see a lot of companies trying to raise capital outside of Africa. And we believe that our pension funds in Nigeria and Ghana and Kenya can have access to some of these companies. So we've embarked on various workshops, partnering with the Ghana FinTech industry, for instance, our association, for instance, to bring all the key players together and facilitating and doing workshops for these companies. The natural resource sector is an area we've started making inroads to, but we need more of them. So this is work that the team continues to work on. Right. Tell us also what the GSE is doing to help drive investor confidence and also investor education for those who are, especially the small investors, individual investors who are investing in the market, in terms of what their rights are and how they should engage with the listed companies and in terms of how they can seek redress when they have issues with companies. That's excellent. And that is a very important part of piece of the puzzle. And working with our regulator, the Securities and Exchange Commission, we're actually in the middle of overhauling our securities industry law. Overhauling our securities industry law will make it clearer, will bring in new products, and will also enhance the financial literacy initiatives that we're doing. Through our engagement, our programs like the Facts Behind the Figures, we are sharing information widely with the general public to join these forums so they can have access to listed companies and ask questions. We also believe that through technology and some of our investments we'll be doing this year, enhancing this year, will be in technology that gives retail investors access to more information in some of the local languages so that they know their rights, they can experience the best education programs that we have for them at their own fingertips. So these are our plans to enhance all these programs. Right. Right. Let's broaden this conversation a bit. Now, African stock markets are often described as small, underdeveloped, lacking liquidity and depth. Would you say that this narrative is changing, one? And two, how would you describe the level of engagement and collaboration among the exchanges? Perhaps let's stick with the West African equities markets. I think overall the African investors, they are quite sophisticated. What they look for is digestification, is choice, it's a broad range of choice, and I believe programs like the West Africa Capital Markets Integration Project, which is between Ghana, Nigeria, BRVM, which covers the francophone countries, and Capoverd, is an important tool. We believe programs like the African Exchanges Linkage Projects are also important tools to provide those diversified, larger markets for investors. We know the average Ghanaian or Nigerian investor goes online, does some very sophisticated things in currency, in crypto, and all of these other assets. And so ours is to continue to develop markets and to develop products, derivative products, options, et cetera, that meets the needs of these day traders who are looking to take advantage of small movements in the market. We cannot take away the fact that most of our investors invest to hold large institutional investors, domestic institutional investors, and they will have different needs, and their needs will be around better research for them, better access to the companies, so they can take long-term use of these investments. All right, and what is your outlook for the economy this year, and how you see it impacting the listed companies on the GSE, especially how it impacts on their earnings outlook? We believe that we have a new government in place, bringing stability and growth back into the market, and the economy is a big priority for this government. We believe the private sector is able to take up this mandate and work for economic growth and profitability. So we're quite, the outlook for us is positive, so long as all of us in the industry continue our work around bringing additional products, investing in systems, investing in education, having the right legal framework, or regulatory framework, as well as policy framework that supports the growth of the capital markets. Things like our capital gains tax waiver, we are looking forward to working with the new minister of finance to provide some of these opportunities for investors again. So our view on the outlooks for the market in terms of companies coming to market to raise additional capital or new capital is positive, because we are beginning to see a more positive outlook from the private sector. All right, and in that same vein, would you say that the GSE, and perhaps African or West African capital markets, are well positioned to help support the African continental free trade area in terms of, of course, helping companies to raise, companies who are looking to expand beyond their borders into the African, the bigger, broader African market, helping them to raise capital and products that would also help support them? Yeah, I am a complete advocate for capital markets as a tool, a very important tool for economic transformation, and business and capital and good corporate governance, and doing all of that in a sustainable way. It must go hand in hand, and that is the role of our capital markets operators, and that's the role of market infrastructure like stock exchanges, like the GSE. And so our role is clearly defined. Create opportunities, work with policymakers for the framework, economic conditions that support the growth of the capital market. Through these avenues we also believe that the individual African has an opportunity to generate wealth for themselves by investing in these profitable companies. So for AFTA to happen, the point of that is ownership. Ownership of the companies that drive AFTA, and that is where we need the African investor, the Ghanaian investor, the Ghanese investor, et cetera, have to have an opportunity to participate in this growth that we believe AFTA can develop for the whole continent. Right. Abnamos, thank you for your time today. Thank you so much for speaking to us. Thank you for sharing all of that with us today. We appreciate your time on the show. Of course, we wish the GSE another stellar performance this year. I've been speaking to Abna Amua, the CEO of the Ghana Stock Exchange.
Theme: Sustainability of Ghana Stock Exchange's 2024 rally and strategic plans for 2025
The Ghana Stock Exchange (GSE) made headlines in 2024 as the best performing equities market in West Africa, boasting a remarkable 56.17 per cent rally. Analysts and market experts are optimistic about the sustainability of this growth in 2025, attributing it to robust corporate earnings and improved investor sentiments. Abena Amoah, the CEO of the GSE, recently shared insights on the market's performance and future plans in an exclusive interview with CNBC Africa. Abena Amoah commended the entire market for their collective efforts that led to winning the award for the best stock exchange for economic growth in West Africa. She emphasized the importance of engaging the market, executing financial literacy programs, diversifying products, and attracting profitable companies that share information with investors. These strategic initiatives have contributed to the positive performance of the GSE in recent years. Looking ahead to 2025, Amoah outlined key strategic areas for the GSE, including a focus on innovation, technology improvement, and plans to enhance the IPO market. She highlighted the introduction of a commercial paper market and an over-the-counter market in response to market demand. The GSE is set to launch a new Central Securities Depository (CSD) software to streamline investor account management and enhance market operations. In terms of driving investor confidence and education, Amoah underscored the importance of overhauling the securities industry law to provide clarity and introduce new products. She emphasized the role of investor education programs like 'Facts Behind the Figures' and the use of technology to empower retail investors with access to information in local languages. The GSE's efforts to attract new listings and diversify the market reflect a commitment to showcasing key sectors of the economy. While progress has been made, Amoah acknowledged the need to attract more companies in sectors like services, financial services, and technology. Collaborative initiatives with industry stakeholders aim to create a more vibrant and representative stock exchange. Discussing the broader landscape of African stock markets, Amoah highlighted the importance of diversification and collaboration among exchanges. Programs like the West Africa Capital Markets Integration Project and the African Exchanges Linkage Project play a crucial role in providing investors with broader choices and access to larger markets. The GSE continues to develop innovative products to meet the evolving needs of investors. Looking towards the future, Amoah expressed optimism about the economic outlook and its potential impact on listed companies' earnings. With a new government focused on stability and growth, the GSE anticipates a positive environment for companies seeking to raise capital and expand their operations. Policy and regulatory support are seen as essential for fostering a conducive market environment. In the context of the African Continental Free Trade Area (AfCFTA), Amoah emphasized the pivotal role of capital markets in supporting economic transformation and business expansion. By enabling companies to raise capital and encouraging individual African investors to participate in wealth generation, stock exchanges like the GSE are poised to contribute to the success of AfCFTA and drive growth across the continent. As the GSE gears up for another year of opportunities and challenges, Abena Amoah's strategic vision and commitment to market development position the exchange for continued success in 2025.
"Through these avenues, we also believe that the individual African has an opportunity to generate wealth for themselves by investing in these profitable companies."
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