GSE hints of commercial paper market in 3rd quarter

Abena Amoah, the Managing Director of the Ghana Stock Exchange (GSE) has disclosed that her outfit will launch its Commercial Paper Market (CPM) product before the end of the third quarter of this year.

According to the Managing Director of the Ghana Stock Exchange, the move is to diversify the products on the GSE and help promote liquidity on the Accra bourse.

Speaking at a seminar dubbed ‘Developing a Commercial Paper Market in Ghana’ to educate players in the banking and financial sector on the CPM product, Ms Amoah explained that Commercial Paper (CP) is 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.

The Managing Director noted that the decision to introduce the product is as a result of the high demand by companies and players in the financial sector for such a product.

Ms Amoah indicated that the private pension funds has more than GH¢51 billion assets under management and these funds have to be deployed to accelerate the socio-economic development of the country.

Abena Amoah stated that a private market existed for CP but there was 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 Managing Director of GSE explained that the GSE 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.