Business News Mon, 30 Apr 2018

Banks compete for limited fund on stock market

Citi Business News has gathered that banks that have announced their intention of going to the stock market to raise funds to meet the 400 million cedis minimum capital requirement are calculating their time to raise the money due to limited funds.

There have been concerns that investors on the stock market may not provide all the money needed by these banks when the time reaches.

So far, Access bank, Energy bank, Republic bank, among others have all declared their intentions of hitting the stock market to raise money.

According to some financial observers, time of raising funds on the stock market is very important since it will have an impact on the results that could be realized.

The CEO Sambed Financial Consult, Sam Bediako Asante told Citi Business News that investors will look for tangible reasons to put their money into a company.

“Money is scarce and investors are always careful where they put their money. So the performance of a bank will be a key factor. It is very important because it will determine how they gain,” he said.

Contrary to some assertions that the delisting of UT Bank from the stock market after its collapse showed that banks are not performing well on the market, the Managing Director of the Ghana Stock Exchange, Kofi Yamoah rather pointed out that the 2017 good performance of the stock exchange was largely due the financial return of listed banks.

But as the banks compete this year for the limited fund on the market there are fears they may not be able to meet their targets.

The CEO of Republic Bank, which has also announced its intention to raise 255 million cedis from the stock market maintained that external investors can always be called upon to complement what local investors can provide.

“Raising this money is not a problem at all. Republic bank is an international bank worth billions. We can always fall on our mother company to provide the funds,” he assured.

In all this, financial advisors have urged Ghanaians to take advantage of listing of banks on the stock exchange to own part of the banking sector.

Source: citibusinessnews.com
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