GSE lines up four more for GAX

The Ghana Stock Exchange (GSE) has lined up four more companies to be listed on the Ghana Alternative Exchange (GAX) next year.

The interest expressed by the four entities will bring the total number of companies who have expressed “firm interest” in listing on the GAX to six.

The four new companies include Intravenous Infusions Limited, a manufacturer of intravenous pharmaceutical infusions; Juaben Oil Mills; and Domod, an aluminium products maker.

“We already have two who are going to list, and four or fiveothers have expressed firm interest. They include Intravenous Infusion Limited, Juaben Oil Mills, Domod, and co. -- all lined up for 2014. We believe that work will start in earnest for any of these companies so that in 2014 they actually do the public offer and list on GAX,” Mr. Kofi Yamoah, the Managing Director of the GSE, told B&FT.

“We have seen so much interest in the area. Going into 2014 we expect to see many more companies on the GAX. That is one contribution we can make to the small- and medium-scale enterprises (SMEs). We will still continue to follow up on other companies who should be and are qualified for the main bourse,” he said.

The concept of the alternative market is to address complaints by SMEs about the stringent criteria that make it impossible to use the main stock market to raise equity for their businesses.

The GSE is targetting SMEs with a minimum stated capital of GH¢250,000 and that have been in operation for at least a year. It will also consider “greenfield” companies that have the potential to be profitable.

Ordinarily, a company should have been in operation for at least three years with a minimum stated capital of GH¢1million to qualify to list on the main exchange. And once listed, the entity is required to publish its financial statements quarterly.

For the new SME market, listed entities will be mandated to publish their statements half-yearly. The GSE has also set up a GH¢1million revolving fund to support the listing expenses of SMEs on the GAX.

One of the key factors the GSE reckons is holding back most SMEs from using the market to raise capital is the conservative posture adopted by entrepreneurs in the country.

Dr. Sam Mensah, Chairman of the GSE, told B&FT in an earlier interview that “it goes back to the issue of capital market or equity culture; in countries where this culture has developed over a long period of time, when entrepreneurs are looking for capital they think ‘capital market’.

“Here, entrepreneurs have not developed that culture so they are not used to sharing and opening up their businesses -- especially with first-generation businesses, as we are a relatively young country.”