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

11 MEMBERS:

• 1. The first deputy

Governor of the Bank of Ghana – chairperson;

• 2. The Head of Financial

Markets of the Bank of Ghana;

• 3. The MD or Deputy MD
• f the Ghana Stock

Exchange;

• 4. The CEO or Deputy

CEO of the Central Securities Depository Ltd;

• 5. Two representatives
• f the Ghana Association
• f Bankers (be an MD or

executive director level

• f a bank);
• 6. A representative of

ACI Ghana;

• 7. Two representatives
• f 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

• f Finance; and
• 9. The Head of GFIM.

TEC ECHNIC HNICAL AL COMM MMITT ITTEE EE

10 MEMBERS

• 1. A representative.

from the Licensed Dealing Membership

• f 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
• f the Central

Securities Depository Ltd;

• 7. A representative

from the Ministry

• f Finance (Debt

Management Office); and

• 8. A representative

from the Bank of Ghana (Financial Markets);

• 9. Chaired by Ag.

MD of GSE.

RUL ULES ES

Securities Industry Act, 2016 (Act 929) GFIM Rules

GF GFIM M De Deal aling ing Me Memb mber ers

• 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

• ther 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

• r 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

The following securities

• r 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.

OT OTHE HER R SE SECUR URITIES ITIES

The following securities

• r 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.

SE SECURI RITIES TIES - Go Gover ernme nment nt

Benchmark Securities: 8 Non-Benchmark Securities: 24 Treasury Notes: 20 Treasury Bills:73 Local US dollar -1 & Eurodollar - 9 Total number of securities :125

SE SECURI RITIES TIES - Go Gover ernme nment nt

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

OU OUTST STAN ANDI DING NG SE SECURI CURITIES IES

SE SECURI RITIES TIES - Corpor porate ate

Issuer Number Amount Raised GHS million Shelf Registration GHS million

Izwe Loans Ltd 6 80.00 80.00 AFB Plc 18 287.07 300.00 Edendale Properties Ltd 6 32.65 50.00 Bayport Financial Services 9 308.84 500.00 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 E-bond CSD Trade- Capture Window Capizar EZ Trade

TRADING ADING INF NFRAS RASTRUC TRUCTURE TURE

Settlement – CSD Platform

Trading – Bloomberg E-bond Trade Capture – 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 GH₵ (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

St Statis tistic tics s of Trades des on GF n GFIM

5,222,319.23 16,768,873.68 30,703,703.75 37,865,317.84 43,828,188.56 2015 2016 2017 2018 As at Oct 2019

Value Traded GHS ‘000

St Statis tistic tics s of Trades des on GF n GFIM

21,946 57,503 107,264 82,820 98,018 2015 2016 2017 2018 2019

Number of Trades

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