Understanding the Stock Market (PART 1).
The stock market is a collection of markets and exchanges where issuance, buying and selling of shares of public companies take place. The buying and selling of shares of public companies takes place on stock exchanges or over-the-counter (OTC) which operates under a set of rules. The Ghana Stock Exchange provides a platform for the issuance and trading of stocks of publicly traded companies in Ghana. There are currently shares of thirty-eight (38) public companies from different industries listed on the Ghana Stock Exchange. The Ghana Stock Exchange has two main platforms; the “main market” and the Ghana Alternative Exchange (GAX). In addition, shares of some public companies are traded over the counter.

Stock markets provides regulated environment where participants transact in shares. The Stock Market acts as primary and secondary markets. The primary market allows public companies to sell their shares to the public for the first time through the process of Initial Public Offering (IPO) to raise capital. MTN issuance of shares to the public in 2018 through an IPO at a price of GHS 0.75 per share is considered a primary market activity. The secondary market activities involves the trading in shares of a company after the IPO process. The secondary market allows existing shareholders to sell their shares to new shareholders. A listed company may offer additional shares through right issue to raise additional capital, a listed company may also decide to issue bonus shares to existing shareholders. Additionally listed companies may decide to buy its own shares or delist their shares from the market.

The stock market maintains market and sector indicators which measure the performance of listed stocks. The Ghana stock exchange maintains two official indicators for measuring the performance of the stock market. The GSE Composite Index (GSE-CI) measures the performance of all shares listed on the Ghana Stock Exchange while the GSE Financial Services Index (GSE-FSI) measures the performance of stocks from the financial sector including banking and insurance companies stocks.