Ghana Stock Exchange holds AGM
GSE All-Share Index slips as poor run of bourse continues
Accra (Greater Accra) 22 June 2000
The Bank of Ghana said on Thursday that it has no hand in the fixing minimum deposits by banks as the financial sector, like all other sectors of the economy, is market regulated by official policy.
"However, when matters of concern detrimental to the interest of customers of the banking system as a whole arise, the Central bank intervenes to resolve the issue."
In a written answer to a questionnaire submitted by the Ghana News Agency (GNA), the Central Bank said the banking system has been deregulated under the current free market concept.
"The banks are free to mobilise deposits and determine deposits and determine the price/interest to pay to depositors based on the cost of mobilisation."
Some depositors of Barclays Bank and Standard Chartered Bank have complained bitterly about the stiff rise in minimum savings deposits to 500,000 cedis early this year saying it cuts out salaried workers.
Comparative figures of other banks are Merchant Bank, two million cedis and Ecobank, one million cedis. Metropolitan and Allied Bank has 100,000 cedis for current account and 50,000 cedis for savings account.
The minimum deposit of Ghana Commercial Bank, Agricultural Development Bank, SSB Bank and International Commercial Bank is 50,000 cedis while Prudential Bank requires 20,000 cedis.
Barclays Bank with effect from May 1, stopped paying interest on foreign currency accounts fed with notes because "foreign notes have no investment opportunity locally."
The Bank, in a letter from its Treasury Department, said the Bank of Ghana does not pay interest on foreign deposits lodged with it.
"Handling foreign notes and coins is becoming increasingly expensive for the bank, as these notes have to be repatriated abroad to obtain value."
The Central Bank said sometimes certain developments in the banking system need to be observed to determine the direction in which the economy is moving.
"It could be a positive development which could be stifled if enough opportunity is not allowed for benefits to come out clearly."
The Bank of Ghana noted that some customers could afford the high minimum deposits while others "would find themselves out of reach."
"Customers who cannot afford would have to look elsewhere. This means good business for those banks with lower minimum deposit requirements.
"As a central Bank, we would want to ensure that customers are served satisfactorily by all banks. The banks' ability to do this is largely influenced by their cost of operations."
On whether the high minimum deposits would discourage the public from using the banking system, the Central bank said there is no evidence to suggest that this is the case. On the contrary, it said, deposit levels keep rising.
"In any case, the Bank of Ghana continues to monitor the system and would act to prevent harmful practices," it said.
GRi./
Accra (Greater Accra) 22 June 2000
The free-fall of the beleaguered cedi has continued as the scarcity of foreign currency keep plaguing the foreign exchange market.
The cedi has seen one of its biggest falls yet this week with big losses against the main foreign currencies.
The currency, which ended last week against the dollar at an average of 5,000 cedis for selling and 5,300 for buying at the forex bureaux, was being exchanged on Wednesday at 5,200 cedis for selling and 5,500 for buying.
The pound sterling was being bought at 7,800 cedis and sold at 8,000 cedis compared with 7,500 cedis for buying and 7,800 for selling at the weekend.
"There is no foreign currency in the system, demand is high and people are not selling to us," one forex bureau operator told the GNA. He added that, "business are slow these days".
The government has announced strict measures, including identification of foreign currency buyers and ceilings to daily purchases, to check capital flight.
But these have not checked the unbridled fall of the cedi.
The government announced the measures as the cedi, which started the year at 3,500 cedis, plunged to about 5,500 cedis on the black market and triggered a chorus of calls on the authorities to remedy the situation.
GRi.../
Accra (Greater Accra) 22 June 2000
The Ghana Stock Exchange (GSE) recorded a surplus income of 203 million cedis as at the end of December 1999 compared with 31.9 million cedis the previous year.
The Chairman of the Governing Council, Mr Norbert Kudjawu, giving the figures at the 10th Annual General Meeting (AGM) in Accra said total income went up by 57 per cent from 1.3 billion cedis to 2.04 billion cedis.
Operating expenses similarly rose by 45 per cent from 1.27 billion to 1.84 billion cedis in 1999 while operating income was 1.6 billion cedis.
Mr Kudjawu said the Management and Council of GSE were concerned about the mismatch between actual operating income and operating expenses saying other income has enabled the bourse to record surpluses over the past three years.
He said the performance of the exchange was affected by the downward trend in the economy last year, as a result of declining commodity prices and rising crude oil prices.
This, he said, led to a fall in major indices of the exchange.
The GSE All-Share Index, the main market indicator, recorded a 15.2 per cent fall in 1999. It went down from a high of 868.35 points in 1998 to 763.16 points. Total market capitalisation also declined from 3,245.6 billion cedis in 1998 to 3,205.3 billion cedis.
Mr Kudjawu said the bourse was putting in place measures, especially in the areas of business development, through close collaboration with the Securities Regulatory Commission and the Government to promote more divestiture through the exchange.
Other measures include changing the current call-over trading arrangement to a continuous auction trading system and stepping up collaboration with stock exchanges in other countries in Africa.
Mr Kudjawu said the review last year of the rulebook of the GSE would further enhance investor protection and confidence in the activities of the exchange.
He, however, said that the success of these measures depends to a large extent on the government's macro-economic policy adding that, "the Council is aware of government's initiatives to address the macro-economic situation."
Mr Kudjawu said the exchange has retained its membership of the African Stock Exchanges Association as well as the International Federation of Stock Exchanges.
He asked new members who have been appointed to the Governing Council to make their expertise available to the exchange to enable it to attain greater heights.
GRi../
Accra (Greater Accra) 22 June 2000
The Ghana Stock Exchange All-Share Index slipped on Wednesday after remaining constant at two previous trading sessions as the downturn in the market continued.
Market capitalisation also fell as the bourse, which has been plagued by the absence of big time investors, continued to reel under intense bearish sentiments.
Bids and offers traded remain low in an offer-driven market. There was no trading in 11 equities while there were no bids in 12 equities. Big time players like Mobil Oil Ghana Limited and Ashanti Goldfields recorded no bids.
In the broader market there was only one price change - Unilever Ghana Limited (UNIL) - which lost one cedi to close at 1,849 cedis.
Only Accra Brewery Limited returned a positive pressure. There was negative pressure on 11 equities while the remaining nine equities had no pressure on them.
The GSE All-Share Index fell by 0.03 points to close at 816.45 down from 816.48 while the market capitalisation slipped marginally at 3,563.87 billion cedis from 3,563.93 billion cedis as a result of the one cedi-loss by UNIL.
Shares on offer were nominally up at 2.2 million from 2.1 million, bids went up at 135, 800 from 126,700 and traded volumes inched up marginally at 40,900 on the strength of the sale of 27,100 recorded by Ghana Commercial Bank (GCB).
Below are the closing prices of listed equities in cedis:
ABL 530
AGC 18,600
ALW 2,600
BAT 440
CFAO 38
EIC 1,880
FML 1,200
GBL 1,400
GCB 978
GGL 990
HFC 910
MGL 200
MLC 150
MOGL 17,500
PAF 300
PBC 520
PZ 800
SCB 22,000
SPPC 150
SSB 1,990
UNIL 1,849 -1
UTCE 125
CMLT 422
GRi../