The Ghana Stock Exchange (GSE) will launch the commercial paper (CP) market on Friday May 10, 2024, providing investors with a much-needed alternative investment option amid the limited choices available on the market.

The domestic bourse sees the introduction of the commercial paper market as a crucial step in accommodating the increasing demand for diversification within the capital market. By offering this new investment avenue, the GSE says it aims to provide investors with additional opportunities and enhance the safety net against risks of default.

The commercial paper market is expected to offer a critical alternative for both investors and borrowers while enhancing liquidity in the debt capital market. The launch highlights the importance of developing a well-functioning commercial paper market for investors and borrowers in a thriving economy.

Preparation for the launch

The GSE has been collaborating with Stanbic Bank Ghana and the legal firm Bentsi-Enchill Letsa & Ankomah (BELA) to develop a robust framework for the effective operation of a commercial paper market in Ghana.

Globally, commercial paper markets have proven to be a practical, convenient and cost-effective means for businesses to raise short-term funding. Commercial paper issuances are ideal for fulfilling temporary cash flow gaps, meeting working capital needs and addressing immediate financial obligations.