Banks must go more public - MD GSE

Accra, Jan. 25, GNA - Banks have the ability to energise the private sector better through public listing offers rather than transferring funds from surpluses, Mr Kofi Yamoah, Managing Director of the Ghana Stock Exchange on Friday said.

"Our banks and insurance companies can do much more to energise the private sector if we will make them raise fresh cash through public listing offers rather than transfers from surpluses."

Speaking at the official listing on the SIC Insurance Company, Mr Yamoah said insurance companies and banks needed to be stronger in cash and capitalised to be able to finance major projects.

He said it would be ideal to witness such a paradigm shift, especially when the oil production starts in Ghana.

"We need to do this task urgently otherwise many downstream oil businesses will be lost to Ghanaian-based companies," he said. Mr Yamoah expressed worry that many large companies in the banking, insurance, telecommunication, energy and mining sectors were still privately held and not publicly listed.

"It does not help us push the wealth creation agenda among the larger investing public," he noted.

According to him, the percentage of the population holding public listed shares and bonds was far below par when compared to even emerging economies.

"Let us as a country make companies in these sectors go public and list. The future benefit of transparency, large local investor-based among others would be crucial to our quest for leadership in the financial services sector in Africa," Mr Yamoah said.

The SIC's initial public offer consisted of 97.8 million Ordinary Shares valued at GH=A229.3 million of which 19.6 million shares valued at GH=A25.9 million was reserved for employees of the SIC. At the end of the offer, applications received from institutions and individuals other than employees of the company, amounted to about 165 million shares valued at GH=A249.5 million, representing 89 percent over subscription.

In effect Government has now sold 60 per cent of its stake in the company to raise GH=A235.2 million. 25 Jan 08