Edward Domina Attafuah
Kwame Nkrumah University of Science and Technology | College of Humanities and Social Sciences
The problems facing the manual scheme of trading which the automated trading system (ATS) seeks to solve includes; having effortless access about the latest news. Again, with the open outcry system, there is a challenge in the operational and informational efficiency of the market. Automated trading system is needed to address the short comings of the manual system of trading. The inefficiencies of the manual trading such as low liquidity will increase cost of trading and the capability to purchase and vend securities. However, automation enables more shares to be traded to improve liquidity on the marketplace as well as position the exchange to compete favourably on the international market by boosting investor confidence to attract extraneous stockholders to the market. The stock markets low income routine is due to the presence of the open outcry systems. Automation is advertised to be part of the procedures on exactly how to stimulate the growth of the Ghana stock market. Automation estimates to minimize the charges and inadequacies allied with the open outcry system of trading in this manner increasing trade action, refining market transparency, liquidity and income in the stock markets by accelerating processes. The study analysing the Efficiency of the Ghana Stock Exchange (GSE). The study relies wholly on secondary data from the Ghana Stock Exchange website (GSE), Ghana statistical service (GSS) and the Bank of Ghana (BOG) online database. The data include Volume of stock traded before and after automation as well as monthly time series data spanning from 2005-2018 which is analyzed with multivariate regression technique. The study concludes that automation has an impact on market efficiency; it further concludes that there is a positive impact of automation, exchange rate and interest rate on the volume of stock traded. Again, the study concludes that the macroeconomic policies of the economy are characterized by volatile and generally high inflation, high interest rates and large exchange rate swings. The study recommends that the trading instructions of the exchange must be change to assist stockholders with the skill to make their own trading verdicts, independent of the services of a certified stockbroker. This has the benefit of accelerating transactions, minimizing commission charges, and improving market volumes and capitalization whiles improving rivalry in the market. This will also allow the exchange to respond quickly to varying trends in market basics in real time. Also, since efficiency thrives immensely on information flow, data on the exchange should be made easily accessible to the public especially potential investors so as to enhance the efficiency of the market. Again, continuous education and training should be conducted for stake-holders and industry players on the Automation Trading System of the GSE.
Keywords: Stock Market Performance, Stock Market Performance, Ghana Stock Exchange, Ghana statistical service (GSS)