Foreigners Hogging GSE Shares?

This month, Ghana's Securities and Exchange Commission (SEC) released some interesting statistics along with its 2005 annual report. Among them was the remarkable fact that non-resident foreigners own 75% of all shares issued on the Ghana Stock Exchange (GSE). According to the GSE's acting director general, such a high level of foreign ownership dries up the market's liquidity because foreigners tend not to be active traders.

I suspect that the vast majority of foreign-owned shares are in the exchange's behemoth, Anglogold Ashanti. This would have little effect on liquidity in other counters. But it would be worth investigating to see if foreigners own majority stakes in firms like Fan Milk or Enterprise Insurance.

Other interesting nuggets in the report:

- 1.5% of Ghanaians are invested in the GSE (15% participation is targeted)

- Encouraging additional listings on the GSE is often frustrated by cultural attitudes toward relinquishing control of private (often family-owned) enterprises

- The GSE will soon launch an effort to formalize the sizeable OTC market. It is currently unregulated.