All is set for Ghana to witness the launch of its first public Commercial Paper (CP) market
tomorrow May 10, 2024, marking a significant milestone in the country’s financial landscape.
This new platform will offer companies a fresh avenue to secure short-term borrowing.
CP market is the latest initiative by the Ghana Stock Exchange (GSE) as it seeks to diversify its products and help promote liquidity. It is essentially a short-term debt instrument that enables companies to raise money and pay back within not more than one year, to meet their short-term financial needs.
Ghana has previously had a private commercial paper market but the one yet to be organized will be completely regulated participation and investment points.
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“What we are going to do is an organised Commercial Paper Market with rules about who can participate in the market, what kind of investment the issuer qualifies for the market, rules on documentation and information,” Abena Amoah, the Managing Director of the Ghana Stock Exchange(GSE) told the Ghanaian Times in an interview last year.
The inclusion of a CP market within the framework of the stock exchange instills a heightened sense of confidence and security for both issuers and investors.
Winston Nelson Jr., President of the Ghana Securities Industry Association emphasised the significance of this development in addressing a longstanding need.
“The CP market fills a gaping hole in the architecture of the Ghana Fixed Income market. It is our hope that it becomes the go-to-market for financing working capital needs of businesses”, he told The Accra Times.
The GSE, established over three decades ago, has been proactive in fostering growth and
innovation within the financial sector. Both the equity and fixed-income markets have seen
significant growth, while alternative markets have been established to support the growth of smaller enterprises, nurturing them towards eventual listing on the main stock market.
The stock market marked a major milestone in April this year when its market capitalization reached an all-time high of GH¢80.32 billion on the back of gains in share prices across various companies.
