A total of GH¢2 billion was raised on the Ghana Stock Exchange (GSE) in 2018. This is as against the 2017 financial year when no capital was raised on the local bourse.
The amount was raised through the listing of two new companies which raised a total of GH¢1.15 billion and the floating of additional shares from nine other companies.
The nine companies, which included Access Bank, Societe Generale, Republic Bank, and Standard Chartered Bank, raised a total amount of GH¢906 million.
The two new companies which listed on the bourse last year are MTN Ghana which listed on the main exchange after raising a record GH¢1.14 billion and Digicut which listed on the Ghana Alternative Market (GAX) after raising GH¢28 million.
This was disclosed by the Managing Director of the GSE, Kofi Yamoah, at a press briefing in Accra last Thursday.
The market also witnessed 19 new corporate notes and bond listings valued at GH¢1.07 billion in 2018, compared to the 18, valued at GH¢6.38 billion in 2017.
The 2017 figure includes the GH¢5.39 billion E.S.L.A proceeds.
The number of Government of Ghana notes and bond listings also rose to 58, valued at GH¢21.33 billion, against the 56 valued at GH¢17.11 billion recorded in 2017.
Ghana Fixed Income Market
The Ghana Fixed Income Market (GFIM) recorded a total GH¢55.125 million, compared to GH¢44.295 million in 2017.
These included two Government of Ghana forex bonds listed with a value of US$221 million.
The face value of corporate notes and bonds listed in 2018 was GH¢6.343 million against the GH¢5.527 recorded in 2017.
Several Government of Ghana, Bank of Ghana, and Cocoa Bills were also listed.
Failure of Energy Bank
Despite the successes on the exchange as far as listing was concerned, there were also some negatives. For instance, the Initial Public Offer (IPO) of Energy Bank failed because the bank was unable to raise the required amount to enable it to list on the market.
The bank wanted to raise GH¢348 million and the minimum amount to be raised for the offer to have been declared successful was GH68 million but the bank failed to raise this amount.
Explaining reasons behind the failure, the Deputy Managing Director of GSE, Ekow Afedzi, said: “When we say a company is raising capital what it means is that the money is being raised from the investing public and not the exchange.”
“So the public must be interested in your company. They must be interested in the future of the company and there are so many reasons that will influence their decision,” he explained.
He said some of the reasons that influenced the decision of the investing public were the economy, investing environment, and interest rates.
“If you look at the environment in 2018, you will know why people were not interested in buying shares. People were interested in guaranteed returns and fixed income instruments,” he stated.
GSE 2018 performance
The GSE composite index was flat in 2018 as it recorded a negative growth of -0.29 per cent while the GSE financial index lost 6.79 per cent, compared to the 52.73 per cent and 49.51 per cent respectively which was recorded in 2017.
The Market, however, witnessed strong interest from corporate for the issuance of fixed income securities and also witnessed a flurry of corporate actions, including rights and bonus issues by listed banks towards meeting the new GH₵400 million capital requirement.
The year 2018 also saw a representation of the telecom industry on the local bourse following the listing of telecom giants, MTN.
On the down side, three non-performing equity securities were de-listed.
Touching on why the composite index and the financial index underperformed, Mr Yamoah said it was due to high interest rates, the stronger US dollar against the cedi, focus on recapitalisations and the BoG’s cleaning of the banking sector, and mixed results of some of the key securities that drive the GSE composite index.
Outlook for 2019
On the outlook for 2019, he said the GSE intended to support the BoG, Central Securities Deposits, MoF and dealers in finalising work and implementing repurchase agreement transactions on the Ghana Fixed Income Market.
He said it was also looking at introducing securities lending and borrowing, working on the deployment of mobile application for secondary trading of listed securities, and improving market compliance by dealers and issuers through the use of technology.