GSE expects more indigenous companies to join market

The Ghana Stock Exchange (GSE) is projecting increased participation from domestic businesses, particularly indigenous firms, following the 100 percent fully subscribed bond issuance by Kasapreko PLC, a prominent beverage manufacturer.

Managing Director of GSE, Abena Amoah expressed optimism, stating that the coming on board of a native company of the calibre of Kasapreko should see others follow suit.

“This is the culmination of more than a decade of engagements with one of our very own and we are very optimistic that it will lead to more corporate entities, especially indigenous ones, coming to the market with issuances,” she said.

The company raised a total of GH¢151.05million, marking one of the highest of such on the Ghana Fixed Income Market (GFIM). The sum came from two tranches through a senior unsecured fixed-rate note issuance of its Series 1 bond programme with a total target size of GH¢600million. The first tranche garnered GH¢103.75million and the second tranche raised an additional GH¢47.3million.

This, the GSE boss added, reflects the potential for the Exchange to serve as a springboard for local companies seeking growth and expansion. The move, she further stated, serves as a tangible example for other Ghanaian businesses.

Deputy Director-General, Finance at the Securities and Exchange Commission (SEC), Paul Ababio, corroborated that the success story highlights the GSE’s potential to provide competitive funding opportunities for indigenous companies.

The 3-year bond, maturing in January 2027, attracted investor interest with its 26 percent coupon rate, making Kasapreko’s paper a compelling option for investors, adding that the timing is apt, especially as many businesses struggle to raise capital on account of wider macroeconomic factors which have driven interest to over 30 percent.

“Kasapreko’s success could be a catalyst for our shared vision of fostering a vibrant and inclusive capital market. By encouraging more indigenous companies to list, the exchange aims to unlock the full potential of Ghana’s economy and empower local businesses to achieve sustainable growth,” Mr. Ababio said.

“One crucial advantage of bond issuance is the greater flexibility in repayment options for companies, in contrast to traditional loans obtained from banks and other financial institutions,” he added.

Recognising that strong governance and compliance are paramount investor concerns, the SEC Director expressed confidence that Kasapreko’s Board’s diverse expertise would be a significant draw for investors.

Kasapreko’s Managing Director, Richard Adjei, expressed deep appreciation for the market’s confidence, stating that the successful bond issuance reinforces the company’s ambitious growth plans and belief in the Ghanaian economy.

“As the first manufacturing company to raise a corporate bond in Ghana, we are thrilled to embark on this journey,” he remarked.

Mr. Adjei suggested that investing in Kasapreko extends beyond mere financial gain. It represents an investment in a wholly Ghanaian business with aspirations to expand its portfolio of over 30 brands beyond the current reach of nine markets in West Africa, two in Southern Africa and one in East Africa.