#1GHANA STOCK EXCHANGE PRESENTATION ON THE GHANA FIXED INCOME MARKET BY MR EKOW AFEDZIE (AG. MD, GSE) TUESDAY, NOVEMBER 12, 2019 LAUNCH OF GFIM AND GMRA GFIM GHANA FIXED INCOME MARKET#2GHANA STOCK EXCHANGE INTRODUCTION GFIM is a market that facilitates the secondary trading of all fixed income securities and other securities to be determined from time to time. In August 2015, the market was established by key stakeholders in the financial market led by the Bank of Ghana (BOG), Ghana Stock Exchange, (GSE), Central Securities Depository Ghana Ltd (CSD), Ghana Association of Bankers, the Ministry of Finance, Financial Market Association (ACI Ghana) and Licensed Dealing Members (LDMs) of the Ghana Stock Exchange. ◆ Securities and Exchange Commission is the Regulator GFIM GHANA FIXED INCOME MARKET#3GHANA STOCK EXCHANGE OBJECTIVES OF GFIM Bring about greater efficiency in the secondary bond market Greater transparency in the trading and reportage of fixed income securities in Ghana Better price discovery Improve liquidity in the trading of fixed income securities GFIM GHANA FIXED INCOME MARKET#4GHANA STOCK EXCHANGE GOVERNING COMMITTEE 11 MEMBERS: 1. The first deputy Governor of the Bank of Ghana chairperson; 1 2. The Head of Financial Markets of the Bank of Ghana; 3. The MD or Deputy MD of the Ghana Stock Exchange; 4. The CEO or Deputy CEO of the Central Securities Depository Ltd; 5. Two representatives of the Ghana Association of Bankers (be an MD or executive director level of a bank); 6. A representative of ACI Ghana; 7. Two representatives of the Ghana Securities Industry Association one whom must be from the licensed dealing membership of the GSE; 8. The Director of the Debt Management Division of the Ministry of Finance; and 9. The Head of GFIM. GFIM GHANA FIXED INCOME MARKET#5GHANA STOCK EXCHANGE 10 MEMBERS TECHNICAL COMMITTEE 1. A representative. from the Licensed Dealing Membership of the GSE; 2. Two representatives of the Primary Dealer Banks; 3. A custodian representative; 4. The Legal Advisor of the Ghana Stock Exchange; 5. The Head of GFIM; 6. A Representative of the Central Securities Depository Ltd; 7. A representative from the Ministry of Finance (Debt Management Office); and 8. A representative from the Bank of Ghana (Financial Markets); 9. Chaired by Ag. MD of GSE. GFIM GHANA FIXED INCOME MARKET#6GHANA STOCK EXCHANGE RULES Securities Industry Act, 2016 (Act 929) GFIM Rules GFIM GHANA FIXED INCOME MARKET#7GHANA STOCK EXCHANGE GFIM DEALING MEMBERS • An Institution licensed by the Securities and Exchange Commission of Ghana to deal in securities and authorized by the Bank of Ghana as a primary dealer; • A non-PD bank licensed by the Securities and Exchange Commission of Ghana to deal in securities ; a Licensed Dealing Member (LDM) of the Ghana Stock Exchange; and • An institution licensed by the SEC to deal in securities but does not belong to any of the other categories mentioned. GFIM GHANA FIXED INCOME MARKET#8GHANA STOCK EXCHANGE GFIM DEALING MEMBERS ❖ Any other entity must trade through one of the above mentioned GFIM dealing members. The Bank of Ghana, for monetary policy purposes, shall be permitted to deal in Government of Ghana or Bank of Ghana securities listed on the GFIM. GFIM GHANA FIXED INCOME MARKET#9GHANA STOCK EXCHANGE GFIM MEMBERS ❖Primary Dealers - 13 ❖ Non- Primary Dealers- 11 * Licenced Dealing Members-14 GFIM GHANA FIXED INCOME MARKET#10GHANA STOCK EXCHANGE CURRENT SECURITIES The following securities or instruments are issued and traded on the GFIM: • Government of Ghana treasury bills, notes and bonds; and • Bank of Ghana money market instruments. • corporate notes and bonds; • repos. GFIM GHANA FIXED INCOME MARKET#11GHANA STOCK EXCHANGE OTHER SECURITIES The following securities or instruments when issued will be traded on the GFIM: Quasi-Government of Ghana institutions' money market instruments, notes and bonds; • local government bonds (i.e. metropolitan, municipal and district bonds); • supra-national bonds; Repos. GFIM GHANA FIXED INCOME MARKET#12GHANA STOCK EXCHANGE Total number of securities :125 SECURITIES - GOVERNMENT Benchmark Securities: 8 Non-Benchmark Securities: 24 Treasury Notes: 20 Treasury Bills:73 Local US dollar -1 & Eurodollar - 9 GFIM GHANA FIXED INCOME MARKET#13GHANA STOCK EXCHANGE SECURITIES - GOVERNMENT OUTSTANDING SECURITIES TENOR OF SECURITY AMOUNT GHC 91-DAY 6,765,016,095 182-DAY 3,298,522,073 364-DAY 5,539,838,534 1-YEAR 2,717,367,480 2-YEAR 11,372,792,969 3-YEAR 12,424,090,481 5-YEAR 14,969,301,432 6-YEAR 1,780,734,816 7-YEAR 4,580,802,038 10-YEAR 15-YEAR 8,665,116,177 5,812,651,561 20-YEAR TOTAL 162,131,557 78,088,365,213 GFIM GHANA FIXED INCOME MARKET#14GHANA STOCK EXCHANGE SECURITIES - CORPORATE Issuer Number Amount Raised GHS Shelf Registration GHS million million Izwe Loans Ltd 6 80.00 80.00 AFB Plc 18 Edendale Properties 806 287.07 300.00 32.65 50.00 Ltd Bayport Financial 9 308.84 500.00 Services Ghana Home Loans 2 19.00 380.00 PBC Ltd ESLA Ltd Bond Savings & Loans 14 23 ± 362.30 400.00 6,000.00 10,000.00 62.13 100.00 Quantum Terminal Ltd 1 45.00 140.00 Dalex Finance 1 20.00 150.00 Total 62 7,216.99 12,100 GFIM GHANA FIXED INCOME MARKET#15GHANA STOCK EXCHANGE Two Pet B-USD X-RATE Curncy P EURUSD 11.3620 +.0027 TRUST BGNL CU 14:34 Op 1.3594 Hi 1.3628 Lo 1.3586 99 Actions 99 Save As wy(0) 8/20/2014-01/26/2014 19:00-18:59 TD 2Y SY Max Tick BGNL 1.3620/1.3621 4 97) Edit Close 1.3594 Value 01/21/14 Compare Bloomberg E-bond Oat TRADING INFRASTRUCTURE Download from CSD Trade- Capture Window 18457 8.25 +21.68 25.80% 153.45 DS 56.75 38.59 US 81.50% +3.85 278.95 O 274.05 4.352 32.45 48.14 92.35 13.65% 312.52 +48.79 75.85 175.102 536.78 +7.46 61.76 39.46% 125 130.50 4.35% 65.98 Capizar EZ Trade M GHANA FIXED INCOME MARKET#16GHANA STOCK EXCHANGE Trading - Bloomberg E-bond TRADING INFRASTRUCTURE Trade Capture - CSD Platform Trading Capizar EZ Trade - Settlement - CSD Platform GFIM GHANA FIXED INCOME MARKET#17GHANA STOCK EXCHANGE 1140 3014 6 2.5739 TRAX GUODESTIONS FOR TECH 154% 11601 O 1461 www I || 検索 SETTLEMENT Clearing and Settlement System operated by the Central Securities Depository Ltd. KITY INFORMATION 100 RELATED STOCKS 1509 55275 ADV Settlement Cycle - T+2 1. Cash Settlement- Bank of Ghana 2. Transfer of securities- Central Securities Depository Ltd. GFIM GHANA FIXED INCOME MARKET#18GHANA STOCK EXCHANGE YEAR STATISTICS OF TRADES ON GFIM VALUE TRADED GHC (000) LIQUIDITY % 2015 5,222,319.23 18 2016 16,768,873.68 42 2017 30,703,703.75 53 2018 37,865,317.84 55 As at Oct 2019 43,828,188.56 51 TOTAL 134,388,403.06 YEAR TOTAL TRADES 2015 21,946 2016 57,503 2017 107,264 2018 82,820 As at Oct 2019 98,018 TOTAL 367,551 GFIM GHANA FIXED INCOME MARKET#19GHANA STOCK EXCHANGE STATISTICS OF TRADES ON GFIM Value Traded GHS '000 43,828,188.56 30,703,703.75 37,865,317.84 ווו 16,768,873.68 5,222,319.23 2015 2016 2017 2018 As at Oct 2019 GFIM GHANA FIXED INCOME MARKET#20GHANA STOCK EXCHANGE 21,946 STATISTICS OF TRADES ON GFIM 57,503 Number of Trades 107,264 98,018 82,820 2015 2016 2017 2018 2019 GFIM GHANA FIXED INCOME MARKET#21GHANA STOCK EXCHANGE ACHIEVEMENTS *Creating a secondary bond market which is liquid, transparent and efficient. ❖Creating an investment avenue in fixed income securities for investors. Developed a Bond Module for GSE trading system. Collaborating with Bank of Ghana and Ministry of Finance in developing the Global Master Repurchas Agreement (GMRA). GFIM GHANA FIXED INCOME MARKET#22GHANA STOCK EXCHANGE FUTURE • Introduce Securities Lending & Borrowing. • Promote the corporate bond market. • Developing of other fixed income securities such as Commercial Paper, Municipal bonds. • Creation of Indices. Provision of market information through social media and mobile app. • Collaborate with other stakeholders such as BOG, SEC and MoF to facilitate the establishment of a local credit rating agency. • Investor and Public education. GFIM GHANA FIXED INCOME MARKET#23THANK YOU