i. Private Equities (Shares)
ii. Public Equities (Shares)
Regulators:
i. Securities and Exchange Commission (SEC)
ii. Ghana Stock Exchange (GSE) - Ghana Stock Mkt
What does the Investor Gain by Buying Shares:
i. dividend income which is the distributed company profit to shareholders
ii. sometimes bonus shares which are additional shares distributed freely to existing shareholders
iii. possible capital gains when sale of shares is effected
iv. the right to vote at meetings of shareholders
v. share certificates which are accepted as collateral by banks
vi. sometimes a right issue which is a new issue for cash to existing shareholders in proportion to their holdings usually at a preferential price
How does one buy or sell securities on the Ghana Stock Exchange?
1. Securities are bought and sold on the Ghana Stock Exchange through Licensed Dealing Members also known as Stockbrokers.
2. A licensed Dealing Member or stockbroker is a firm which buys and sells securities on behalf of investors for a brokerage fee or commission.
3. An investor cannot personally come to the Stock Exchange to buy shares, stocks, etc., but can only buy them through the stockbrokers.
4. Stockbrokers, apart from buying and selling securities on behalf of clients, also advise clients on the mix or portfolio of investments (shares, stock, etc., ) and provide functional services such as vault for the safe-keeping of securities for clients. They also give up-to-date information about securities to their clients.
5. To buy securities the potential investor must first contact a stockbroker. Once a stockbroker is chosen, the potential investor must decide on the kinds of securities that are of interest to him. The stockbroker will then recommend the shares and stocks which are suitable for his needs, assuming the stockbroker is given the option to make recommendations.
6. After making a decision on the securities to buy, the stockbroker buys the securities at the most advantageous price obtainable at the time of dealing on the trading floor of the GSE.
7. On completion of the deal, in the case of shares, for instance, the stockbroker sends to the buyer a contract note, showing the date of the transaction, the number of shares purchased, the price per share, the commission chargeable, and stamp if any. The final figure will show how much is payable to the stockbroker on receipt of the contract note.
8. When the transaction is completed, a share certificate is issued to the buyer. The procedure for selling securities is similar to buying but the total amount on the contract note shows the sale proceeds payable by the stockbroker to the seller excluding commissions and any charges.