The Securities and Exchange Commission (SEC) has cautioned prospective investors to desist from investing in fraudulent schemes that promise high rates of return.
Known as Ponzi schemes, they generate returns for older investments by acquiring new investors which continue as long as there are new investors and usually collapse on themselves when the new investments stop.
The Director General of SEC, Mr Adu Anane Antwi, gave the caution at a forum as part of activities marking the capital week celebration in Accra.
The 2014 celebration was on the theme: �The Capital Market: Creating Wealth for All.�
�We have all become people who want to make money today, so if someone comes and says I am giving you 20 per cent on your investments, you will go to any extent to invest there,� he explained.
Citing cases involving financial institutions such as Piram and R5 which absconded with people�s investments, he accordingly advised that prospective investors take their time when making such decisions.
�Take your time when it comes to such offers, and if you have any issues call the toll free lines of the commission,� he advised.
There is therefore the need for intensified investor education so people can understand the essence of investments adding that currently, there were about 35 Collective Instrument Schemes comprising both mutual and unit trust funds available to investors.
Mr Anane Antwi said there was the need for the establishment of a cocoa-backed security that would inure to the benefit of the investors anytime cocoa prices went up adding that, �people will always pray that cocoa prices should go up.�
GSE on GAX
The Ghana Stock Exchange (GSE) in a bid to encourage Small and Medium Enterprises (SMEs) to list on the exchange has introduced the Ghana Alternative Market (GAX) for that market.
A senior executive of the GSE, Mr Augustine Simmonds, said a listing support fund wasin place to meet the upfront costs of advsiors for SMEs wishing to list on the GAX.
The fund, he said, was set up with initial contributions from the African Development Bank (AfDB), the GSE and the Venture Capital Trust Fund (VCTF) and added that there was no listing cost.
Market capitalisation of the GSE stood at GH�64,515.25million as of September 2014 up from the GH�56,430.09 during the same period in 2013.
Going forward, the GSE, he said, was poised to reposition itself as the preferred choice of raising long-term capital in the market.
�We will also grow our existing business, develop new ones as well as promote integration of the West African capital markets,� he added.
A seasoned Investment Banker with Databank, Reverend Ogbamey Tetteh, who also spoke of the importance of financial literacy said it was important for people to understand that time in the market was better than timing the market.
�In investing, you pay the price but what you get is value, so you need to spend less, save more and invest your savings,� he added.
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