GSE to reinstate ‘suspended’ PBC, other firms soon

GSE to reinstate ‘suspended’ PBC, other firms soon
Source: Ghana | JoyBusiness | JAD
Date: 30-09-2019 Time: 05:09:40:pm
Acting Managing Director, Ghana Stock Exchange, Ekow Afedzi

The Ghana Stock Exchange (GSE) says it would soon reinstate Produce Buying Company (PBC) onto the market. 

This is based on some progress made by the companies in question to comply with the listing rules. 

The Acting Managing Director of the GSE, Ekow Afedzi who disclosed this to JoyBusiness was however silent on the exact date that the GSE would finalize the process.

Suspension of PBC from the GSE     

The GSE in September last year announced the suspension of the listing status of Produce Buying Company, PBC.

This follows the company’s inability to publish its financial results since the end of its financial year in September 2018. 

According to the Exchange “PBC has also failed to redeem the Tranche P4 of its note program which matured on December 6, 2018.” 

The Exchange's Rules and disclosure policy as set out in Parts VI and VII of the Rules “empowers the GSE to suspend listing or compulsorily de-list securities where the company has failed to comply, or is unable, or unwilling to comply for any reason whatsoever with the Exchange's requirements on continuing listing obligations and also where the company has failed to comply with its Listing Agreement or other agreements with the Exchange.”

Status of other firms on GSE’s watch list

Mr Afedzi also disclosed that some other firms that were recently put on its watch list would have status fully restored on the market. 

He argues all these moves would help improve liquidity on the stock market in the coming months.

Some new initiatives by the Ghana Stock Exchange 

The Ghana Stock Exchange is also working to introduce some new initiatives to boost market interest and also support a lot of businesses and small enterprises to come onto the exchange. Some of them include;

1. Establishments of over the counter platform and Business Incubation

GSE to establish an Over-The-Counter Platform  

Ekow Afedzi indicated that they are working to establish an Over-The-Counter platform for businesses very soon. 

The move would allow companies that are not necessarily listed on the Ghana Stock Exchange. Normally it refers to the process of how securities are traded for companies that are not listed on the formal exchange. 

Securities that are traded over the counter traded via a broker-dealer network as opposed to on a centralized in some cases these securities do not meet the requirement of any formal exchange. 

Mr Afedzi tells JoyBusiness this is part of the strategies that they are adopting to bring about more excitements on the market just like over-development exchanges. 

He believes that it could be a strategy to encourage some of these enterprises to turn onto the platform, “Its all the aim of one person investing and others going out to raise capital through the exchange.”  

Listing Rural Banks on the Ghana Stock Exchange

He also disclosed to JouBusiness they are working to encourage the listing of Rural Banks on the Exchange. 

However, this would be done through the Over- The- Counter platform which would be a preparatory platform for them to come to the alternate market and even the Ghana Stock Exchange. 

Mr Afedzi indicated that some engagements have been done to aid or support this move.

The Acting Ghana Stock Exchange Boss also disclosed that the about 5 companies are expected to list on the Alternate Market of Ghana Stock Exchange that’s GAX.    

Business Incubation platform for firms in the country …

One of the major challenges that have affected the Ghana Stock Exchange’s quest to encourage more listing is this the financial status of some of these small businesses or how they run their businesses. That is why the Exchange is looking at establishing business incubation for businesses.  

Mr Afedzi tells JoyBusiness the incubator would seek to support enterprises in the country to improve their bookkeeping records as well as governance issues. 

This could prepare a lot of them to even list on the alternate market of the Ghana Stock Exchange.

“Localizing” listing requirements for Ghanaian businesses  

There is a perception that some of the listing rules and the current requirements make it difficult for the local firms to get onto the market.  

Mr Afedzi argues that it might be difficult that’s why they have introduced other markets like Ghana Alternative Market GAX to deal with some of these listing requirements. 

“Around the world, there are basic standards for the operation of stock markets and it would be difficult to change those rules” he added.  

The Exchange currently has three markets. That’s the Ghana Stock Exchange, Ghana Alternate Market and the Ghana Fixed Income Market, purposely for the trading of bonds which has traded about GH¢37 billion worth of bonds.  

The Ghana Stock Exchange was established in November 1990. This should mean that by November this year it should be 29 years.  

The main has raised about GH¢4 billion since the time that it was established; this was done by way of right issues, and Initial Public Offering (IPOs). The GAX has about five companies and has raised GH¢10 million since it started.