By Kofi Ahovi
Trading in bonds on the Ghana Stock Exchange (GSE) would by the end of this year go electronic, Business Week has gathered.
This is to make trading in bonds on the bourse more efficient while meeting international standards. Currently trading in bonds are done over the counter and manually.
All dealers and brokers would be given access to the system and both Bloomberg and Thompson Reuters would also disseminate trading information in real time to enable foreign investors get trading information on time.
Speaking to the General Manager GSE, Ekow Afedze, he noted that the electronic bond trading would also help in developing an active secondary market, which requires a high quality set of rules and regulations, a clearing and settlement system and competent banking system participants, but added that most of these have already been met.
A secondary market would ensure a deep and liquid bond market that would provide government and corporate institutions with opportunities to issue long-dated instruments and to effectively manage their debts.
Major efforts have been made since 1996 to provide the requisite infrastructure to facilitate the primary issue and secondary market trading in government securities including bonds. These include the introduction of a primary dealer system and an electronic auction bidding system, the establishment of a Central Securities Depository, and introduction of a gross settlement system, a bond trading system and a securities depository for the GSE.
Currently, automation of the GSE is almost complete and this would facilitate the commencement of electronic bond trading.
With the return of a proper yield curve, government has been able to do four successful three year fixed rate bond issues.
Currently, the total value of the bonds listed on the GSE is about GHc1.9 billion, nearly all of it in the form of government treasury bonds. There are 78 government bonds currently listed on the GSE, with tenors ranging from two years to five years but only three private sector corporations have issued corporate bonds. These include HFC and Standard Chartered Bank.
Government, between 2007 and 2008, did come close to issuing seven year bonds but macro-economic instability destabilized it plans.
Trading in bonds on the Ghana Stock Exchange (GSE) would by the end of this year go electronic, Business Week has gathered.
This is to make trading in bonds on the bourse more efficient while meeting international standards. Currently trading in bonds are done over the counter and manually.
All dealers and brokers would be given access to the system and both Bloomberg and Thompson Reuters would also disseminate trading information in real time to enable foreign investors get trading information on time.
Speaking to the General Manager GSE, Ekow Afedze, he noted that the electronic bond trading would also help in developing an active secondary market, which requires a high quality set of rules and regulations, a clearing and settlement system and competent banking system participants, but added that most of these have already been met.
A secondary market would ensure a deep and liquid bond market that would provide government and corporate institutions with opportunities to issue long-dated instruments and to effectively manage their debts.
Major efforts have been made since 1996 to provide the requisite infrastructure to facilitate the primary issue and secondary market trading in government securities including bonds. These include the introduction of a primary dealer system and an electronic auction bidding system, the establishment of a Central Securities Depository, and introduction of a gross settlement system, a bond trading system and a securities depository for the GSE.
Currently, automation of the GSE is almost complete and this would facilitate the commencement of electronic bond trading.
With the return of a proper yield curve, government has been able to do four successful three year fixed rate bond issues.
Currently, the total value of the bonds listed on the GSE is about GHc1.9 billion, nearly all of it in the form of government treasury bonds. There are 78 government bonds currently listed on the GSE, with tenors ranging from two years to five years but only three private sector corporations have issued corporate bonds. These include HFC and Standard Chartered Bank.
Government, between 2007 and 2008, did come close to issuing seven year bonds but macro-economic instability destabilized it plans.
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