Dr Charles Akomea-Bonsu and Frank Sampong
The study discusses the importance of stock market development, determinants of stock market development and the benefits of a successful development, with particular emphasis on emerging markets. The rational is that, for the Ghana Stock Exchange (GSE) to experience increasing investments there is the need for its successful development. The study has therefore reviewed growth analysis of the Ghana Stock Exchange All Share Index, Market Capitalisation and share traded volumes on the Exchange. As growth indicates how well an exchange may have performed, it also gives prediction as to the future trend movement of the total market; recognising that there is other factors aside growth analysis that provides indication of stock market performance. The study found that the Ghana Stock Exchange (GSE) All Share Index, market capitalisation and share traded volume in the years under review have grown considerably. It was also found that the Ghanaian economy has enjoyed continuous economic stability, with a single digit inflation rate of 9.6% and real GDP growth rate at 6.4%. Thus, macroeconomic stability is found to be crucial in the developmental process. It is envisaged that the current automation project of the GSE will improve market efficiency and liquidity. It was further found that, the GSE has supported the economy of Ghana through the funds received by listed firms from listing. As businesses regularly require funds to grow and expand, the GSE have progressively provided listed companies this opportunity. The overall effect is the increasing economic activities being enjoyed by the country. The recommendations of the study include the integration of the GSE into the international market as a result of current trend in globalisation. It also recommends regular market reviews to resolve market irregularities; and the pursuance of continually sound macroeconomic stability by the Ghanaian government.