The market in Ghana is made up of the bond, equity, foreign exchange and the derivative markets. This underlying variable can be referred to as underlying asset.
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Budget performance is expected to improve after the budget deficit drop from 8. Irving Fisher, was one of the early pioneers in this field. The central bank of Ghana shifted gradually from a direct system of monetary controls to an indirect system that utilized market-based policy instruments.
The promotion of private sector— led growth provides a key Bond markets in ghana for reviving the nonoil sectors, as well as for links to stimulate manufacturing.
According to AfDB report this would be done by the means of direct project lending as well as lines of credits to financial institutions. They can be viewed as a channel that mobilises savings from sectors in the economy with surpluses into sectors of the economy in need of funds to finance capital investment projects.
Largely financial institutions aid this type of transaction. On the settlement date, the fund accounts of the participants are debited by their respective amounts and the securities accounts of individual investors are credited with the allotted securities.
They now have a more lager and better primary and secondary money market where they can easily borrow and lend when they are in short of funds or have excess liquidity. Guide to Buying Bonds Procedures for market participation Every Friday, the Bank of Ghana conducts an auction of T-bills on behalf of the Government and the public sector for their borrowing needs as well as for monetary policy purposes.
The country has undergone a process of financial sector restructuring and transformation in the s in order to achieve emerging financial market status. This was to stabilise the cedi and also reduce inflation as a result of more foreign currencies being introduced into the financial markets and also reduce smuggling and illegal trading of currency which was escalating the depreciating of the Cedi against the major currencies such as the US Dollar, the Pound Sterling and the Euro and consequently making the financial markets attractive to investors.
The size of capital market in Ghana in the s in terms of instruments traded and the number of participants was small relative to that of other developed markets. The derivative market in Ghana A derivative instrument according to Glen Arnold is an asset whose performance is based on derived from the behaviour of the value of an underlying asset usually referred to simply as the underlying.
The consequence of the above institutional changes has been an increased competition in the money market and led to the development of new instruments like the REPO in As a result, a greater part of returns on the GSE accrue to foreign investors. The major players in the capital markets are the government, investment banks and Corporations.
The budget initiated a path-breaking approach to Government budgeting with respect to expenditure presentation in the form of a Medium Term Expenditure Framework MTEF.
Conclusion The market in Ghana has down tremendously well for the last few decades is it robust enough to withstand the shocks from external factors such as the slow down of the USA economy as well as the credit crunch across the globe. These may include crude oil, bond, equities, exchange rate, interest rate gold, wheat, just to mention a few.
Following the set criteria the system automatically allots the winning bids and the cost of these bids, which become available online to participants. If price changes seem random and thus unforecastable it is because investors are doing their jobs: The bank is currently expected to issue a five year bond by the end of June this year.
Markowitz argued that investors try to minimize risk while striving for the highest return possible. More powers have also been given to the Central Bank to enable it perform its supervisory functions effectively.
Some few years ago they were only allowed a limit up to ten percent. This has been viewed as a positive development in the market. A Anin pg Positive changes Re-denomination One big boost to the financial market is the re-denomination of the Ghanaian cedi in July West Africa Magazine, 23 Sept The growth The bond market One remarkable achievement of the restructuring is creation and growth of the bond market in Ghana.
Benchmark issues There are 6 potential benchmark maturities: As a result, their investment policies may be biased in favour of short-term projects and away from entrepreneurial ventures A well functioning bond markets tend to make the financial system more complete.
E Bailey- pThe Bond Market in Ghana - Download as Word Doc .doc /.docx), PDF File .pdf), Text File .txt) or read online. Ghana’s bond market is expected to be deepened by move by government to set up a national Bond Market Committee.5/5(2).
Ghana does not have a benchmark yield curve, but the Bank of Ghana and the Ministry of Finance construct a yield curve using yields from primary markets for internal purposes. The auction yields are published on official sites. There is no daily setting of reference yields by the debt management office.
The market in Ghana is made up of the bond, equity, foreign exchange and the derivative markets. Unfortunately the money market dominates the financial markets in Ghana, bringing with it all the problems associated with it.
Ghana and Nigeria have been ranked as the most attractive Local and Euro Bond Markets on the continent, according to a new research carried out by South African-based Rand Merchant Bank.
The Research comes in the wake of the recent ranking of Ghana’s economy as the second fastest growing economy on the continent.
The African Financial Markets Initiative (AFMI) is the African Development Bank (AfDB) response to domestic resource mobilization through local currency bond markets development.
Ghana Stock Exchange, 5th Floor, Cedi House,Liberia Avenue, P.O. Box GPAccra.Download