What are Securities?
Securitis are financial instruments or legal documents signifying either an ownership position in a company (i.e. shares) or a creditor relationship with a company or government (i.e. Stocks and bonds).

What are Stocks, Bonds and Shares?
Stocks and bonds are long-term fixed interest bearing securities issued by Government and companies. When one invests in stocks and bonds, one gets interest income which is paid periodically until the loan matures or is called back by the issuer. The holder of stocks and bonds gets interest even if the issuer does not make a profit.
Shares represent part-ownership in a business concern. Shareholders, therefore, between them own the company, have a vote in how it's affairs are run and if the company makes profit, they are entitled to a share of it. However, the dividend which shareholders receive is dependent on the company's profitability and management decisions.

Who is an investor?
An investor is a person or an institution who uses his savings or borrowings to buy securities.

What does and investor gain by buying shares, stocks, bonds, etc?
By purchasing share of listed companies on the Stock Exchange, investors become part-owners of the companies and thereby gain:

• dividend income which is the company's distributed profit to shareholders.
• sometimes bonus share which are additional shares distributed freely to existing shareholders
• possible capital gains when sale of shares is effected.
• the right to vote at shareholders' meetings.
• share certificates which are accepted as collateral by banks.
• sometimes a 'right issue ' which is a new issue for cash to existing shareholders in proportion to their holdings usually at a preferential price.

Investmest in stocks and bonds, on the hand, gives the investor fixed rates of interest periodically until the loan matures or is called back by the issuer.

How does one buy or sell securitues on the Ghana Stock Exchange?
Securities are bought and sold on the Ghana Stock Exchange through Licensed Dealing Members also known as Stockbrokers.

A licensed Dealing Member or stockbroker is a firm which buys and sells securities on behalf of investors for a brokerage fee or commission. When trading is in listed securities, the stockbroker must be a Lincensed Dealing Member of GSE.

An investor cannot personally come to the Stock Exchange to buy shares, stocks, etc., but can only buy them through the stockbrokers.

Stockbrokers, apart from buying and selling securities on behalf of clients, also advise clients on the mix or portofolio of investments (shares, stock, etc., ) and provide functional services such as vault for the safe-keeping of securities for clients. They also give up-to-date information about securities to their clients.

To buy securitis the potential investor must first contact a stockbroker. Once a stockbroker is chosen, the potential investor must decide on the kinds of securities that are of interest to him. The stockbroker will then recommend the shares and stocks which are suitable for his needs, assuming th stockbroker is given the option to make recommendations.

After making a decision on the securities to buy, the stockbroker buys the securities at the most advantageous price obtainable at the time of dealing on the trading floor of the GSE.

On completion of the deal, in the case of shares, for instance, the stockbroker sends to the buyer a contract note, showing the date of the transaction, the number of shares purchased, the price per share, the commission chargeable, and stamp if any. The final figure will show how much is payable to the stockbroker on receipt of the contract note.

When the transaction is completed, a share certificate is issued to the buyer. The procedure for selling securities is similar to buying but the total amount on the contract note shows the sale proceeds payable by the stockbroker to th seller excluding commissions and any charges.