From my role in investment advisory at major Ghanaian banks, I’ve dealt with GSE listings and dividend processes under SEC regulations. Post-DDEP, understanding these is key for portfolio management.

(i) Dividend (5 marks)

A dividend is a distribution of a company’s profits to shareholders, typically as cash or stock, approved by the board and paid per share. In Ghana, it’s governed by the Companies Act, 2019 (Act 992), and announced via GSE. For example, banks like Standard Chartered pay interim/final dividends from retained earnings, signaling financial health and attracting investors. Types include cash (direct payment) and scrip (additional shares). It reduces retained earnings but boosts shareholder loyalty, with tax implications under Income Tax Act (dividends taxable at 8% withholding).

(ii) Ex-Dividend Date (5 marks)

The ex-dividend date is the first trading day when a stock trades without the right to the upcoming dividend; buyers on or after this date don’t receive it, while sellers before do. Set by GSE (usually 2-3 business days before record date for settlement), it causes a price drop approximating the dividend amount. For instance, if a share trades at GHS 10 with a GHS 0.50 dividend, it might open at GHS 9.50 ex-div. This ensures fair allocation, per SEC rules, and affects trading strategies like dividend capture.

(iii) Capital Market (5 marks)

The capital market is a platform for long-term (over 1 year) fund raising and trading, including equities, bonds, and derivatives. In Ghana, the GSE and over-the-counter markets facilitate this, regulated by SEC. It enables companies to issue shares/bonds for expansion (e.g., IPOs under SEC guidelines) and investors to seek growth/capital gains. Features: higher risk/return than money markets, liquidity via secondary trading, and role in economic development (e.g., funding infrastructure post-DDEP). Intermediaries include brokers and investment banks.

(iv) Money Market (5 marks)

The money market deals in short-term (up to 1 year) debt instruments for liquidity management, like T-bills, commercial paper, and repos. In Ghana, managed by BoG via auctions, it helps banks meet reserves and corporates manage cash. Low risk, low return, high liquidity; e.g., 91-day T-bills yield around 15% in 2025. Regulated under BoG’s Monetary Policy, it stabilizes rates and supports fiscal operations, contrasting capital markets by focusing on preservation over growth.