Green Bond Market, Over-the-Counter and derivative platform to be introduced on GSE

The Ghana Stock Exchange (GSE) has disclosed that it is working to introduced new platforms on the market this year subject to regulatory approvals. This will include Green Bond Market, Over-the-Counter trading and a Derivative Market. 

Managing Director of the GSE, Ekow Afedzie disclosed this to JoyBusiness on PM Express Business Edition with Host George Wiafe on May 13.

According to GSE’s Managing Director, these new initiatives should help improve listing and whip up interest in the Ghana Stock Exchange.

The local bourse boss noted that the Over-The-Counter trading, for instance, will encourage more companies to list, especially for those that don’t want to be exposed to daily trading like other companies on the Ghana Stock Exchange.

On the Green Bond Market, the MD noted that “there is a huge market out there that they are trying to take advantage of.”

“We have already developed the rules for the Over-The-Counter Trading, and we are just waiting for Securities and Exchange Commission’s approval” he added.

Improving market interest and performance

There are concerns that creating these new platforms may actually affect the main market.

But responding to these concerns, Mr Afedzie maintained that these new platforms are needed to give investors the necessary options  a move that help will help developing the Exchange, “don’t forget an exchange exit to serve a different segment of the market”  

The Pandemic and the Ghana Stock Exchange 

Mr Afedzie noted that, on the operational side, the market was not that hit badly, this is because they had instituted measures in 2007. They began the process of automation which ended in 2008, a move that really helped the work from home.  

“This actually ensure that we had an offsite disaster recovery site and systems that allowed us to trade remotely. However, at the initial stages, we were affected because we couldn’t have our face-to-face meeting and engagement with our clients.”

The Managing Director also announced that in terms of market performance, 2020 was one of its best in the 30-year history of the Ghana Stock Exchange. This is despite being a pandemic year.

Mr Afedzie attributed the sterling financial performance to the introduction of the bond market and the performance of some companies listed on the local bourse.

 Another factor that he said contributed to the sterling performance was the fact that there was a lot of that ventured  into treasury bills and bonds trading, “the pandemic also resulted in lot more investors looking for a risk-free market.”

Raising Funds on Ghana Stock Exchange and concerns by small businesses

Mr Afedzie rejected arguments that it is difficult to raise funds on the Ghana Stock Exchange and that the market is the preserve of Blue Chip companies.

He noted that currently apart from the main market, there is also the Ghana Alternate Market GAX, which has more “ relax” rules and listing requirements,  that will allow,  small and medium-size enterprises to come onto the market easily.

“We also want to see how we can attract more companies onto the Ghana Alternative Market,”  Mr. Afedzie added.

He said there are several incentives available for these medium-sized businesses, for them to take advantage and list on the local market.

There is also talk about incubation program that will play on more supporting role to encourage more of these firms to list on the Ghana Stock Exchange.

Listing requirements

  Mr. Afedzie added that the listing requirement for small size businesses on the Ghana Stock Exchange

A company applying for listing on the Main Board of any class of its shares is, as a general rule, expected to meet the following requirements:

Minimum Stated Capital: It must have a stated capital after the public floatation of at least GHc1million in the case of an application relating to the First Official List and GHc0.25 million for the GAX.

Minimum Public Float: Shares issued to the public must not be less than twenty-five per cent (25%) of the number of issued shares of the company.

Payment of Shares: Shares must be fully paid for: Except in very exceptional circumstances, the Exchange will refuse listing in respect of partly paid shares.

Spread of Shares: The spread of shareholders existing at the close of an offer should be in the GSE’s opinion adequate with at least 100 shareholders after the public offer for the Main Board and 20 for the GAX.

Mr Afedzie cited intravenous infusion as one of the companies that came onto the GAX platform that is doing so well.

Delisting and impact on the Ghana Stock Exchange

The Managing Director of the Ghana Stock Exchange however rejected suggestions that some companies delisting raising a lot of questions about the market. He believes that this might be mostly due to decisions by their shareholders to restructure their business, rather than non-performance of the market or not so good market.

“We are however looking forward to at least 5 listing this year, this is due to some engagements and pitching that we have done come from last year” he added.

Mr. Afedzie was however maintained that the performance of the Ghana Stock Exchange can largely be attributed to the performance of the economy, adding that  “ if things are going well, it will largely impact positively on the economy. 

Source: Joy Business

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