The Ghana Stock Exchange (GSE) has announced a strategic partnership with the London Stock Exchange (LSE).
The LSE partnership with the Ghana Stock Exchange (GSE) is expected to help develop some of the local capital market’s infrastructure that can sustain and deepen the financial market, as well as move it beyond emerging market status.
President Akufo Addo, who rang the bell on the floor of the LSE on Wednesday this week, to signal the start of the partnership at the ongoing United Kingdom-Africa Investment Summit 2020 in London, explained that Ghana expects the partnership to culminate in increased revenue and resource mobilization for investments on the African continent. Indeed, with the GSE a key participant in the ongoing phased integration of the main stock exchanges in West Africa – involving the GSE itself, the Nigerian Stock Exchange, and the BRVM, which comprises listings from eight francophone countries across the sub-region, as the leading participants – the new partnership between the GSE and the LSE stands to provide benefits for capital market development all around West Africa.
The President was joined in formally signaling the start of the partnership by the UK MP for Africa, Andrew Stephenson; Finance Minister Ken Ofori-Atta and other dignitaries.
Ghana is expected to rely on its well recognized resource endowment and highly functional stock exchange to fully partner the London stock market in attracting portfolio investment into the country and indeed the African continent as a whole.
Meanwhile, President Nana Addo has admitted that in order to cause a real positive economic change, the continent needs to renew its resolve to make itself relevant in the global economy.
He argued that Ghana and the rest of countries on the continent can do better in terms of domestic resource mobilization; moving away from raw materials exports and insisting on processing and adding value to exportable resources.
“In that regard, the LSE can be a pivot in the new relationship with the continent of Africa and Ghana in particular where there is a noble opportunity to mobilize resources for investment in Africa’s infrastructure.” he said.
co-operation with the LSE would assist Ghana’s aspiration to become the financial service hub of Africa.
“Back in Ghana, we are aiming at a Ghana Beyond Aid. This requires that we put together the right economic policies capable of delivering on the Beyond Aid Agenda; our financial systems should be robust enough to support local businesses as well as international investors. We consider co-operating with the LSE as a step in the right direction,” Dr. Bawumia indicated.
Although the GSE has been in the grip of a bear market for the past two years – the all share index fell by 12.25 percent in local currency terms in 2019,- it has been one of the most attractive stock markets in Africa for international portfolio investors since its establishment in late 1990. Indeed in 1993, 1994, 2003 and 2004, it ranked among the best performing stock markets in the world. Its most recent bull market was in 2017 when its all share index rose by 43.8 percent in United States dollar terms, making it the second best performing stock market in Africa that year behind Malawi’s stock exchange.
Already there are some cross-listings of shares that are traded on both the LSE and the GSE, most notably gold mining firm AngloGold Ashanti and upstream oil explorer and producer, Tullow Oil.