GAX poised for more listings; as over 140 SMEs engage

GSE, Treasury securities account, pushes
Abena Amoah, Managing Director-Ghana Stock Exchange (GSE)

The Ghana Alternative Exchange (GAX) is on course to attract additional market listings as 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.

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.

In an interview with the B&FT on the side-lines of the Entrepreneurs Solutions Summit, incoming Managing Director of the Ghana Stock Exchange (GSE), Abena Amoah, mentioned 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,” Ms. Amoah said.

Some weeks ago, the Ghana Stock Exchange (GSE) signed an MoU with Development Bank Ghana (DBG) and the Association of Ghana Industries (AGI), ensuring that SMEs listed on the Ghana Alternative Market (GAX) will be able to access long-term debt at a low-cost.

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 – what we are doing with AGI – we are targetting some of the individual AGI members that could be attractive to the market,” Ms. Amoah said.

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.

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,” Ms. Amoah disclosed.

“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,” she added.


The Deputy MD further stated that her outfit is putting in measures to ensure the long-term viability of these companies, with the recent roll-out of its guidance manual for disclosures on Environmental, Social, and Governance (ESG) for listed firms.

At the launch, she said the manual will help publicly-listed companies, including those listed on the GAX, better position themselves to be globally competitive.

“It is a well-known fact that businesses across the globe have moved beyond solely focusing on financial metrics in performance evaluation, and are now focusing on both the positive and negative impacts of their operations on the environment… The GSE is thankful to our partners for their support in producing this ESG guide that helps Ghanaian companies be more accountable for the impact of their businesses,” she said, adding that the Accra bourse will lead the way by reporting on its ESG impact as an entity.

The manual has been in the works for three years, and is the result of efforts led by the Global Reporting Initiative (GRI), the Swiss State Secretariat for Economic Affairs (SECO) and the African Securities Exchanges Association (ASEA).

It sees the GSE join some 60-plus stock exchanges globally which provide guidance on ESG reporting, according to the United Nations Sustainable Stock Exchanges (SSE), and comes as the value of global sustainable bond issuance is projected to top US$1.5trillion in 2022.







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