Capital market ready for GH¢4.46bn test - Yamoah

The Ghana Stock Exchange’s (GSE) Managing Director, Kofi Yamoah, has indicated that activities of the exchange will not be threatened by the presence of telecoms operator MTN and four banks seeking to raise a combined GH¢4.46billion from the capital market.

According to him, the fact that the market is open to both resident and non-resident investors gives it limitless capacity to handle big-ticket transactions of such nature.

“A lot of people have the notion that our market hasn’t got the capacity for activities like these; but at the last count, the value under management for private pension funds alone was more than GHC 10 billion.

“As an open market that both resident and non-resident investors alike can participate in, there’s no limit to whatever amount we can handle provided the company gets its act together and investors see it to be a good investment proposition,” he told the B&FT at the exchange’s annual general meeting in Accra.

Telecoms giant MTN recently launched its Initial Public Offer (IPO), seeking to raise an amount of GH¢3.48billion from the capital market within a space of six months.

The move coincides with plans by four banks to raise a combined GH¢1.19billion from the same market to enhance their chances of meeting the new GH¢400million minimum capital requirement.

Access Bank, Agricultural Development Bank (ADB), Republic Bank and Societe General Bank are hoping to raise GH¢450 million, GH¢310 million, GH¢255 million and GH¢170 million respectively.

These activities on the capital market have fueled concerns that they may dry-up investor funds for future transactions.

Responding to a question on whether the market will be able to absorb the transactions’ total value, Mr. Yamoah said: “It will be good to set that record so we can prove to all who have been asking this question that the market is deep enough to accept the IPOs.

“At the end of it all we will have a cause to answer that question, and I believe that we will answer it favorably.”

The Ghana Stock Exchange improved its performance in the year under review to register a surplus of GHC 12.37 million compared to the 2016 figure of GHC 5.38 million.

Market capitalization for all listed securities closed the year at GHC 58.8 billion, representing a 11.48 percent increase when pegged against the GHC 52.7 billion that was raised the year before.

Domestic market capitalization also surged by 45.23 percent to GHC 16.2 billion from the GHC 10.9 billion that was recorded in same period of 2016.

Improvement in macroeconomic indicators positively affected the performance of the exchange, as the Composite Index – which measures entire market output – recovered from the -15.33 percent recorded in 2016 to end the year 2017 strongly at 52.7 percent.

The volume of shares traded within the review year was 323 million at a value of GHC 518 million, compared to the GHC 242 million that was raised on 253 million shares in 2016.

Looking ahead, Mr. Yamoah indicated that the exchange will step-up promotion of the market to issuers and investors as well as advocate for local content listings.

“We are working on further improving market efficiency, confidence and ultimately liquidity. Already, we are supporting development of the market for repurchase agreements…We will also continue to build the capacity of our professionals through training programmes to help grow the capital market.”