Accra, July 14, GNA – Mr Augustine Simons, Head, Ghana Fixed Income Market (GFIM), Ghana Stock Exchange (GSE), says the growth in local investors’ holding Government debt securities is a good signal for investment and development.
He said this at the back of the fixed income market recording year-on-year increase since its commencement in 2015, and a major transition from the market being predominantly foreign to locally dominated.
As of 2015, when the GFIM started, 70 per cent foreigners and 30 per cent locals took part in the market, but that had changed to 78 per cent locals against 22 per cent foreigners as of 2021.
The volume of trade on the market, which stood at 5,222,319,227 in 2015 increased to 5,222,319,227, before a further increase to 5,222,319,227 in 2017.
In 2018 it increased to 5,222,319,227; then 55,552,592,770 in 2019; 55,552,592,770 in 2020, and a further increase to 208,807,923,727 last year.
Speaking to these developments on the market, Mr Simons said: “We are having our local investors showing more interest in holding government’s paper and it means that anytime the Government comes out to issue paper the locals are ready to hold.”
He added that: “There’s so much liquidity in the instruments on the market as issued by the government, which means that the Government can always issue paper to do developmental projects.”
He said this in an interview with the Ghana News Agency on the sidelines of a day’s workshop for journalists in Accra.
The workshop was organised by the Ghana Stock Exchange in partnership with the Institute of Financial and Economic Journalists (IFEJ) on the Bond Market and Ghana’s Fixed Income Market Operations.
Mr Simons underscored the growth in local participation in holding Government paper could also reduce the pressure on the forex of corporate auctions like coupon payments and principal payments, when the debt was matured.
He said that: “If the Government comes out to issue an infrastructure bond for instance, or have to redo the motorway, it means that we have the local capacity to be able to take that fund and that will mean that the pressure on the forex will be low.”
The Head of GFIM explained that the establishment of the market had raised the level of efficiency on the secondary bond market, better price discovery, transparency and improved liquidity in the trading of fixed income securities.
Ms Abena Amoah, Deputy Managing Director, GSE, explained that the workshop was to provide journalists with the requisite information to make them better appreciate the securities market.
This in turn would enable them to do informed reports and educate the public to take part in trading on the market to provide an efficient securities market for national economic development through access to capital and investment.
The training was attended by 30 journalists, drawn from the print, broadcast and online media in the country.
Mr Raymond Bulley, the President of IFEJ, remarked that the training would be helpful to the journalists and urged them to ensure that they use the knowledge gained to do well informed reports.
GNA