APA – Accra (Ghana) The Managing Director of the Ghana Stock Exchange (GSE), Ms. Abena Amoah, has announced that the GSE will launch its Commercial Paper Market (CPM) product before the end of the third quarter of this year in order to diversify the products on the exchange and promote its liquidity,
Amoah told the participants at a seminar with the theme ‘Developing a Commercial Paper Market in Ghana’ to educate players in the banking and financial sector on the CPM product, that Commercial Paper (CP) was essentially a short-term debt instrument to help companies to raise money with tenure of not more than one year to meet their short financial needs.
She explained that the decision to introduce the product followed the high demand by companies and players in the financial sector for such a product. Ms Amoah disclosed that the private pension funds has over GH¢51 billion assets under management and these funds have to be deployed to accelerate the socio-economic development of the country.
According to her, a private market exists for CP but there is no visibility for the market.
“What we are going to do is an organised CPM with rules about who can participate in the market, what kind of investment the issuer qualifies for the market, rules on documentation and information,” the report by the Ghanaian Times quoted the Managing Director of GSE as saying.
It added that Ms. Amoah explained that the exchange has currently completed the guidelines and rules on the CPM and is awaiting approval from the Securities and Exchange Commission (SEC) to roll out the product.
She also stated that there will be rating agencies which will rate the companies that enter the CPM to assess their financial capacity and determine whether they are credit worth and capable of paying back the monies they raised.
GIK/APA