Abena Amoah, the incoming Managing Director of the Ghana Stock Exchange (GSE), has disclosed that the Ghana Alternative Market (GAX) is on course to add more listings to the market as it engages more Small and Medium Enterprises (SMEs).
According to the incoming Managing Director of the Ghana Stock Exchange, managers of the stock exchange have engaged more than 140 Small and Medium-sized Enterprises (SMEs) in partnership with the Association of Ghana Industries (AGI), as well as Stanford Seed Transformation Network Ghana.
Ms. Abena Amoah noted that the Exchange has over the last two years stepped up its efforts at engaging with SMEs through the various established associations, which is expected to yield some positive outturns.
“We’ve signed various memoranda of understanding (MoU) and some are being implemented; one is already with the Stanford Network which is made up of about 140 medium-sized Ghanaian companies run by serious entrepreneurs, and we’re talking to them about utilising the market. We are confident that in the medium-term we can get about 10 of them to come into the market.
“Another partnership we’re pursuing is with the Association of Ghana Industries. What we are doing is screening SMEs, running clinics for them and preparing them to be put in front of investors.”
Abena Amoah
Ms Abena Amoah indicated that the signing of the MoU with the Development Bank Ghana (DBG) and the Association of Ghana Industries (AGI), ensures that SMEs listed on the Ghana Alternative Market (GAX) will be able to access long-term debt at a low cost. She added that even though the agreement will give these companies access to debt funding, it is anticipated that its design won’t prevent the listed companies from using the Ghana Fixed Income Market (GFIM) or seeking equity financing in the long run.
“We have held some joint clinics with DBG already, screening these companies and even outside. That’s what we are doing with AGI. We are targeting some of the individual AGI members that could be attractive to the market.”
Abena Amoah
GSE Already Engaging Institutional Investors
Ms. Amoah hinted that the GSE is already engaging institutional investors on possibly investing in some of the identified SMEs, in order to diversify their investment portfolios.
“We have also been engaging with institutional investors to help them look at how they go about diversifying their portfolios. To this end, we are planning a non-deal road show whereby we bring some significant businesses to sell their stories to institutional investors. Hopefully, by the time some of these companies are ready to come to the market, the institutional investors would already know a lot about them.
“Our stance is that the market is big for businesses, so SMEs should not be afraid of using the market. Many of these SMEs worry about opening up their companies and being transparent about their operations and putting out their financial information to the public.”
Abena Amoah
Currently, there are six companies listed on the Alternative Market with a total market capitalisation of GH¢49.8billion, which is woefully inadequate at a time the country is ramping up efforts to be a major player in the continental free trade area.
GAX, a parallel market, focuses on businesses at various stages of their development, including start-ups and existing enterprises– both small and medium, with potential for growth.
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