Equities are financial assets which entitle investors to have a share in the net asset of a firm and also participate in the firm's profit in a form of dividends. In other words, the shares indicate part ownership of investors in a limited liability company. Government cannot issue equity security because it is not a limited liability company. Unlike debt securities holders of equity securities may qualify for voting rights which are tied to the number of shares they hold. There are various forms of equity securities but the common types of equity securities issued in Ghana are the ordinary share, preference share and exchange traded fund (ETF).
Preference shareholders receive dividends before common shareholders and also during periods of liquidation preference shareholders receive their benefits before ordinary shareholders. Preference shareholders cannot compel a firm to undergo liquidation due to the firm's inability to pay dividends and also not all preference shares have voting rights.
ETFs are securities traded on exchanges like shares but track the combined value of a portfolio or basket of underlying assets such as share, commodities and bonds. ETFs afford investors the opportunity to own creation units that entitle them to the commensurate value of the underlying assets in quantities that would not have been possible if they were to purchase the actual assets. In other words, ETFs are indexed linked securities which are interconnected to a market index, a commodity etc that tracks the yield and return of its benchmarked index. In August, 2012, the first ETF, NewGold ETF was issued by ABSA Capital in Ghana and listed on the Ghana Stock Exchange.