Financial sector analysts have backed the decision by the Ghana Stock Exchange (GSE) to suspend companies that fail to comply with the rules of the stock market.
According to them, the move will improve the efficiency of the local bourse and attract more investors.
The GSE, last Friday suspended five companies for failure to comply with some regulations.
It has since cleared two, CLYD and TRANSOL after they had corrected their anomalies.
The other three still on suspension are African Champion Industry Limited (ACI), Pioneer Kitchenware Limited as well as Golden Web Limited.
Speaking to Citi Business News on the matter, the General Manager for IFS Capital Management Limited, Manfred Bressey was also hopeful that the stock will continue its positive growth at least towards the end of the year.
“The performance of the companies that are on the stock in the first quarter and second quarter gave an indication that something good is happening in the stock market, so people are investing in it”.
He added, “You don’t have stock markets dipping consistently for four years so there’s some intuition that the year will be good and it’s a year with a new government, with renewed hope and also the energy crisis that used to hit companies is over so all these combinations of factors can inform an experienced banker that this year is likely to go well”.
Mr. Bressey further attributed the relatively stable nature of the stock market for its good performance as compared to other investments.
“If the fixed income or money market is going to go down, theoretically people will go looking for other sources of investment , so the treasury bill which was 22% has come down to 12 %, so people who do not want to keep their money there begin to look for other opportunities to go into”.
By: Anita Arthur/citibusinessnews.com/Ghana