New Case Finance

The Ghana Stock Exchange (GSE) has called for a formalised forex trading platform that will see the local currency bought and sold in a much more transparent manner.

“Ghana should have a formal and centralised reporting framework for forex trading for better price discovery in foreign exchange market space,” Kofi Yamoah, Managing Director of the exchange, said at its 2018 stock market review in Accra.

He explained that before establishment of the Ghana Fixed Income Market (GFIM), which is a trading platform for bills and bonds (government and corporate), banks used to trade among themselves and there was not much transparency.

“Before GFIM the banks were trading fixed income securities, but they were trading bilaterally or one-on-one. With GFIM, all those deals being struck among banks are now known by all other market players, including the general public.

“This means that at any point in time, between bank A and bank B, there has been this transaction at this price and volume. This gives me an indication about how much these two are buying and selling,” he explained.

“We want something similar in the forex
space, so that the cedi’s price against other trading currencies will be better discovered. If we do not do this, the prices at banks, forex bureaux and the black market have significant impact on the cedi – which hurts the economy in general,” he added.

Mr. Yamoah noted that even though the central bank states the price at which the cedi is trading against other currencies, it basically states the price at which the banks trade at the end of the day; but a forex trading platform will offer transparency and real-time reporting of trades and prices.

“What the central bank does is report transactions done by the various banks at the end of the day. What we are trying to advocate is something that is real-time so we do not wait till the end of day to know the price was,” he said.

Further advocacy by GSE

The GSE also urged government to allow listed companies pay less tax than the unlisted one. To Mr. Yamoah, this will urge more companies to go public. “Corporate Tax rates should see a differentiation between listed issuers and unlisted companies,” he said.

Also, he added that viable State Owned Enterprises (SOEs) should be encouraged and allowed to raise equity or debt securities based on their balance sheets to better pursue their mandate.

Stock market’s 2018 performance

With strong interest from corporates for the issuance of fixed income securities and rights and bonus issues by listed banks toward meeting the new GH¢400million capital requirement, the GSE Composite Index was flat at -0.29 percent with the financial index recording a loss of 6.79 percent as compared to positives of 52.73 percent and 49.51 percent respectively in 2017.

In 2018, the telecoms sector, for the first time, had a representation on the bourse with the listing of the biggest telecoms company MTN, while three non-performing equity securities were de-listed.

Outlook for 2019

The exchange, in 2019, seeks to support the Bank of Ghana, Central Securities Depository (CSD) and the Ministry of Finance and dealers in finalising work and implementing the Repurchase Agreement transactions on GFIM.

Also, the exchange will facilitate the introduction of securities lending and borrowing. Mr. Yamoah added that the GSE will work on the deployment of a mobile application for secondary trading of listed securities.

“Improve market compliance by dealers and issuers through the use of technology such as a reporting portal, and continue stakeholders’ engagements on GSE’s plans to demutualise in the short- to medium-term,” he added

Source- MyJoyBusinessNews

The Ghana Stock Exchange (GSE) has delisted Pioneer Kitchenware Ltd (PKL) from the main equity market of the Exchange effective January 14, 2019.

According to a statement from the GSE the decision to delist Pioneer Kitchenware Ltd is based on Rule 13 of the GSE Listing Rules.

Under Rule 13(1) of the GSE’s Listing Rules, “the Council may at any time and in circumstances as it thinks fit, suspend or cancel a listing and shall do so to protect investors and to ensure an orderly market”.

“Among the reasons for which Council may de-list a company is where the financial situation of the Company is significantly threatened, as provided under Rule 13(4)(g) of GSE’s Listing Rules; or where the Company consistently fails to comply with GSE’s Rules and directives, as per Rule 13(4)(h) of GSE’s Listing Rules.

The Exchange indicated in the referenced press release that PKL would be compulsorily de-listed at the end of December 2018 if the company was not done with the restructuring and resumed production. PKL is currently not in production,” the statement said.

In February 2017, PKL submitted a request to voluntarily de-list the company from the GSE’s Main Market to enable the directors to restructure the company.  

PKL has since withdrawn that request with the intention to restructure its operations and remain listed. 

“The GSE has therefore decided to suspend the listing status of PKL with immediate effect.  If and when the restructuring of the company is successfully concluded, the suspension will be lifted otherwise, PKL will be compulsorily de-listed at the end of December 2018,” a press release from the GSE stated.

Source- MyjoyBusinessnews

The Securities and Exchange Commission (SEC) has approved for the Energy Commercial bank to issue an Initial Public Offering (IPO) to help it meet the minimum capital requirement for banks.

The bank should resort to the investing public to raise 340 million cedis which represents about fifty percent of the company’s stake.

Though SEC’s approval comes a month after the originally planned August date, it suffices as a plus for Energy bank’s ability to meeting the new minimum capital requirement.

Energy bank now has the clearance to go to the public to raise 340 million cedis to shore up its capital.

The processes commenced in March this year; seven months after the announcement of the new minimum capital for banks.

Energy bank is confident that it will raise enough capital on the Ghana Stock Exchange because of its stability and performance over the years.

The 2018 half year performance of Energy bank shows that its total income increased by 72 percent between 5 million cedis compared to the estimated 3 million cedis recorded in the same period last year.

Similarly, the bank’s profit after tax increased a significant growth of over 400 percent to record 985 million cedis between January and June this year; compared to the 196 million cedis recorded the same period last year.

Energy bank is expected to now engage the IC Securities is the Transaction Adviser and is expected to market the shares to many investors within the country.

When the IPO is successful, Energy bank will be the eleventh commercial bank to list on the Ghana Stock Exchange.

The process to allow Ghanaians to become part owners of the lender began in March 2018.

Source- CitiBusinessNews

The Securities and Exchange Commission (SEC) has issued a strong warning asking all unlicensed financial investment schemes to close down their operations or risk facing the law.

The Commission is cautioning that the activities of such entities pose a threat to the financial sector which need to be stopped.

The SEC says the unlicensed institutions are able to lure the unsuspecting public via various mass media advertising platforms.

According to the Commission, the outrageous interest rates of between 72 and 840 percent annually, also leaves much to be desired for any realistic investment package.

The SEC again believes that promising clients with huge returns but failing to disclose the risks or ability to pay, are traces of pyramid or ponzi schemes.

Meanwhile SEC has cautioned the public to be wary of these schemes and desist from investing their life savings in these unlicensed instruments.

The caution also comes at a time where sections of the public are embarking on panic withdrawals over fears they will lose their investments following recent developments in the financial sector.

Source- CitiBusinessNews

Databank, an independent investment firm has said it is not merging with any commercial bank in the country.

Databank clarified that it is not a commercial bank and is therefore not part of the ongoing sanitization exercise taking place within the banking industry.

“We wish to, therefore, allay any concerns that the investing public, general public and our esteemed customers may have about the implications of our partnerships with the various commercial banks. 

It is in no way a consolidation nor a signal that Databank is merging with any commercial bank. That is not a part of our strategic vision currently. Our goal is to focus on our core mandate of providing investment solutions to Ghanaians,” a press release by the investment firm has stated. 

According to Databank, the clarification has become necessary because “sections of the general public are misinterpreting Databank’s relationships with its partner banks as part of the ongoing consolidation exercise of commercial banks.”

“We wish to inform the general public and our esteemed customers that Databank is not a commercial bank and is therefore not part of the ongoing sanitization exercise taking place within the banking industry.”

The release signed by Databank’s Group Chief Executive Officer, Kojo Addae-Mensah stated, “We are regulated by the Securities and Exchange Commission (SEC) and governed by the Securities Industry Act, 2016 (Act 929) and its regulations thereof. Commercial banks are regulated by the Bank of Ghana and governed by the Banks and Specialized Deposit Taking Institutions Act 2016, Act 930.”

According to Databank, there are three types of relationships the firm has with commercial banks; Custody bank, Collection bank and Partner-location bank. 

“The relationships we have with our partner banks is, therefore, a complementary one, with a single goal of helping Ghanaians invest towards their future,” the statement added.

Source- MyJoyBusinessNews

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