THE GHANA FIXED INCOME MARKET BY MR EKOW AFEDZIE (AG. MD, GSE) - PowerPoint PPT Presentation

PRESENTATION ON THE GHANA FIXED INCOME MARKET BY MR EKOW AFEDZIE (AG. MD, GSE)

INT NTRO RODU DUCTIO CTION  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

OB OBJECT ECTIVES IVES OF OF GF 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

GO GOVER ERNING NING COM OMMI MITTE TTEE 1. The first deputy 2. The Head of Financial 3. The MD or Deputy MD 11 MEMBERS: Governor of the Bank of Markets of the Bank of of the Ghana Stock Ghana – chairperson; Ghana; Exchange; 7. Two representatives 5. Two representatives 4. The CEO or Deputy of the Ghana Securities of the Ghana Association CEO of the Central 6. A representative of Industry Association one of Bankers (be an MD or Securities Depository ACI Ghana; whom must be from the executive director level Ltd; licensed dealing of a bank); membership of the GSE; 8. The Director of the Debt Management 9. The Head of GFIM. Division of the Ministry of Finance; and

TEC ECHNIC HNICAL AL COMM MMITT ITTEE EE 1. A representative. 2. Two from the Licensed representatives of 3. A custodian 10 MEMBERS Dealing Membership the Primary Dealer representative; of the GSE; Banks; 7. A representative 4. The Legal 6. A Representative from the Ministry Advisor of the 5. The Head of of the Central of Finance (Debt Ghana Stock GFIM; Securities Management Exchange; Depository Ltd; Office); and 8. A representative from the Bank of 9. Chaired by Ag. Ghana (Financial MD of GSE. Markets);

RUL ULES ES Securities Industry Act, 2016 (Act 929) GFIM Rules

GF GFIM M De Deal aling ing Me Memb mber ers • a Licensed Dealing Member (LDM) of the Ghana Stock • An Institution licensed by the Exchange; and Securities and Exchange • A non-PD bank licensed by the Commission of Ghana to deal • An institution licensed by the Securities and Exchange in securities and authorized SEC to deal in securities but Commission of Ghana to deal by the Bank of Ghana as a does not belong to any of the in securities ; primary dealer; other categories mentioned.

GF GFIM M De Deal aling ing Me Memb mber ers  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.

GF GFIM M ME MEMB MBER ERS  Primary Dealers – 13  Non- Primary Dealers- 11  Licenced Dealing Members-14

cur urrent rent SE SECUR URITIES ITIES • Government of Ghana treasury bills, notes and bonds; and The following securities • Bank of Ghana money or instruments are issued market instruments. and traded on the GFIM : • corporate notes and bonds; • repos.

OTHE OT HER R SE SECUR URITIES ITIES • Quasi-Government of Ghana institutions’ money market instruments, The following securities notes and bonds; or instruments when • local government bonds issued will be traded on (i.e. metropolitan, municipal and district the GFIM : bonds); • supra-national bonds; • Repos.

SE SECURI RITIES TIES - Go Gover ernme nment nt Benchmark Securities: 8 Total number of securities :125 Non-Benchmark Securities: 24 Treasury Notes: 20 Treasury Bills:73 Local US dollar -1 & Eurodollar - 9

SE SECURI RITIES TIES - Go Gover ernme nment nt OUTST OU STAN ANDI DING NG SE SECURI CURITIES IES TENOR OF SECURITY AMOUNT GH ₵ 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 8,665,116,177 15-YEAR 5,812,651,561 20-YEAR 162,131,557 TOTAL 78,088,365,213

SE SECURI RITIES TIES - Corpor porate ate Issuer Number Amount Shelf Raised GHS Registration GHS million million Izwe Loans Ltd 6 80.00 80.00 AFB Plc 18 287.07 300.00 Edendale Properties 6 32.65 50.00 Ltd Bayport Financial 9 308.84 500.00 Services Ghana Home Loans 2 19.00 380.00 PBC Ltd 2 362.30 400.00 ESLA Ltd 3 6,000.00 10,000.00 Bond Savings & Loans 14 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

TRADING ADING INF NFRAS RASTRUC TRUCTURE TURE Bloomberg CSD Capizar EZ E-bond Trade Trade- Capture Window

TRADING ADING INF NFRAS RASTRUC TRUCTURE TURE Trading – Bloomberg E-bond Trade Capture – Settlement CSD Platform – CSD Platform Trading – Capizar EZ Trade

SE SETTLEMEN EMENT Clearing and Settlement System operated by the Central Securities Depository Ltd. Settlement Cycle - T+2 1. Cash Settlement- Bank of Ghana 2. Transfer of securities- Central Securities Depository Ltd .

St Statis tistic tics s of Trades des on GF n GFIM YEAR VALUE TRADED LIQUIDITY % GH ₵ (000) 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 YEAR TOTAL TRADES TOTAL 134,388,403.06 2015 21,946 2016 57,503 2017 107,264 2018 82,820 As at Oct 2019 98,018 TOTAL 367,551

St Statis tistic tics s of Trades des on GF n GFIM Value Traded GHS ‘000 43,828,188.56 37,865,317.84 30,703,703.75 16,768,873.68 5,222,319.23 2015 2016 2017 2018 As at Oct 2019

St Statis tistic tics s of Trades des on GF n GFIM Number of Trades 107,264 98,018 82,820 57,503 21,946 2015 2016 2017 2018 2019

ACHI HIEVE EVEMENT MENTS  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 Repurchase Agreement (GMRA).

FUTURE RE • 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.

THANK YOU