- The Washington Times - Wednesday, November 23, 2005

ACCRA, Ghana

Two minutes before the opening bell sounds at the Ghana Stock Exchange, soft gospel music rains down and the trading floor remains virtually empty. Josephine Quaye, dressed in a smart brown pinstripe pantsuit, is the lone trader on the floor.

When the buzzer-like opening bell rings, she’s busily scribbling on red “sell” cards and filling in blue “buy” cards and will be the first to write up her offers and bids on the seven whiteboards scattered around the room.

Miss Quaye’s colleagues will trickle in slowly over the next 15 minutes, until the doors are firmly locked in an attempt to wean brokers off “African time.” They’ll seal their deals with the uniquely West African “slap and snap” handshake: a slap of the palm finished with a snap of the middle finger.

Barely an hour later, it’s all over. More than 20,000 shares from 28 companies, some selling for as little as six cents, have changed hands.



Despite its size and the fact there are only two computers in the room, Ghana’s 15-year-old stock exchange was judged one of the fastest performing for the past two years running.

“We can’t compare ourselves to Toronto or New York,” general manager Ekow Afedzie laughed. “But in terms of returns, people make more money here.”

For a country that only recently lost its Highly Indebted Poor Country status and receives $7 billion in foreign aid, and where citizens earn an average yearly income of $290, it defies logic that there’s money for playing the market.

But two years ago, the GSE had a U.S. dollar return of 144 percent, outpacing 61 other markets worldwide, according to Databank Financial Services.

Last year, Ghana led the world with a compounded index return of 256 percent. Its market capitalization, the dollar value of outstanding shares, is about $10 million and a provisional listing category means local companies are slowly joining the fray.

“It’s picking up, the understanding is picking up,” said Alfred Bortey, a trader licensed by the exchange who has worked at the GSE with three of the country’s 14 brokerage houses over the past nine years.

Mr. Bortey said more than half of his clients are Ghanaians. The rest are foreign investors, who are limited to owning 10 percent of any security listed on the exchange.

The exchange currently has three wholly locally owned companies, including an Internet technology company, a pharmaceutical manufacturer and a vegetable oil processor.

In fact, when two of the three companies went public, their stocks were oversubscribed by a minimum of 50 percent.

“That is a trend we want to see,” Mr. Afedzie said. “We want to see local companies use [the exchange], raise the money and expand. That will raise the economy.” That’s the real importance of the exchange, he said: It builds local companies without relying on foreign parent companies or hefty bank loans.

The challenge has been convincing average Ghanaians to take a gamble on the stock market, said the trading floor’s presiding officer, Elizabeth Mate-Kole.

“The average Ghanaian is used to T-bills — treasury bills — where there’s no risk,” she said.

When interest rates plummeted in 2001, the stock exchange surged as Ghanaians looked for a better place to put their money.

Now, trading has gone up from 11 companies traded twice weekly to 28 companies traded daily, making the market less volatile and the trade volumes greater.

Listed companies include the Accra Brewing Co., makers of the light and ubiquitous Club beer, and Fan Milk, an ice cream maker whose output is hawked by boys on the street in single-serving plastic bags.

The highest share prices belong to the banks and Anglo Ashanti, the gold mining company that provided the electronic signboard displaying the day’s stock prices.

The signboard is the only thing that goes down when the electricity fails 20 minutes into trading: The stock exchange is not yet automated, and the room is cooled by an ocean breeze blowing through the windows.

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