The Ghana Stock Exchange (GSE) has added its voice to the growing list of frustrated capital market players who have called on the government to, as a matter of urgency, constitute a board for the Securities and Exchange Commission (SEC).

Albert Essien, Board Chairman of the GSE Council, told the B&FT at the exchange's recent annual general meeting in Accra that: "The government says it is sorting that out but that is a huge challenge to the capital market today. I think that it could have come earlier."

A number of companies were expected to list on the local bourse this year. However, the listing process and timelines have been derailed by the absence of a board at the securities industry regulator.

The laws regulating the securities industry stipulates that all new listings “including the listing of new tranches of existing corporate bonds, and equities“ and the registration of investment advisory firms, asset management firms, and the creation of mutual funds, have to be approved by the board of the SEC.

But since the change of government and the dissolving of all boards including the board of SEC, several investment and asset management firms that seek to establish mutual funds have been left in limbo.

One major transaction that is believed to have been stalled by the absence of a SEC board is the Over the Counter (OTC) listing of 35percent of MTN shares as a result of the telco giant's acquisition of the 4G network.

Investment advisors and brokers have told the B&FT that corporate institutions including Ghana Home Loans, Edendale Properties, and African Financial Business (AFB) that have already listed their bonds on the stock market, but are looking to raise more capital, are also hampered.

Mr. Essien noted that with increased excitement and optimism, the market has taken a positive turn this year as compared to the negative growth experienced over the past two years.

He is of the view that with such optimism, many investors are looking to cash in but the lack of a board at SEC is dampening the renewed confidence of the market. "A key challenge is the fact that the full complement of the commissioners of SEC is still not in place," he said.

Kofi Yamoah, Managing Director of the exchange added that: "The only unfortunate aspect is that the Securities and Exchange Commission doesn't have its full complement of commissioners in place and we hope that would also come sooner than later so that we can have the full gamut in place for the second half of 2017," he said.

The former Director General of the SEC, Dr Adu Anane Antwi, in a recent interview with the B&FT said: "When the board is not there, nothing can be done. If I want to raise capital, I first look at the timing and if I believe the market is good and favourable I should be able to go. But if I go for approval and there is no board then I have a challenge. The board should be put in place."

The stock market performance in 2016

Despite the negative performance of the stock market in 2015 and 2016, the market has taken a dramatic turn for good with market watchers attributing it to the positive macroeconomic environment.

Mr. Yamoah said the improvement in the macroeconomic environment that had seen inflation and interest rates trending downwards and the cedi relatively stable this year offered hope for the Exchange.

"We count on the fact that the macroeconomic environment would continue to be good this way and on the basis of that we expect much more improvement as far as secondary market activity is concerned," he said.

The GSE Composite Index, which measured the performance of the entire market, ended 2016 with a negative 15.33percent on the back of subdued performance by listed banks. The volume of shares traded stood at 253million shares valued at GH¢242million compared to 246million shares valued at GH¢247million in 2015.

The market capitalisation of listed securities at the end of December 2016 was GH¢52.7billion compared to GH¢57.1billion in 2015, representing a decrease of 7.75percent. Also, domestic market capitalisation fell by 2.75per cent at GH¢10.9 billion compared to GH¢11.2billion in 2015.