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GSE yet to record listing on GAX
 
Posted on: 27-Aug-2013        
 
 
 
The Ghana Stock Exchange (GSE) is yet to record any listing on its Ghana Alternative Market (GAX) after its launch. The GAX has milder listing requirements offered to micro, small and medium scale enterprises (SMEs) to enable them list.

The GAX, which is an initiative by the GSE, was introduced earlier this year for SMEs and local companies with potential growth prospects to raise long-term capital to finance their businesses.

According to the Deputy Managing Director of the GSE, Mr Ekow Afedzie the exchange recognises that going to the market was expensive hence the introduction of the alternative market to address that challenge and help small businesses to raise more capital.

But despite this platform given to SMEs to list to enable them solve their challenge; the GSE is yet to record any listing although it is optimistic that there are a few SMEs coming onto the GAX soon.

“We have tried very hard to get more companies listed and we have had various issues and that has called for a review of the requirements to enable more companies list,” he explained at a symposium on innovations in SME financing organised by Oasis Capital Ghana Limited, a licensed capital fund manager in Accra.

The Ghana Alternative Market is characterised with shortened procedures, reduced requirements and more incentives to make it more appealing to SMEs and local companies.

Unlike, listing on the main exchange where the stated capital requirement is huge, companies considering listing on the GAX must have a stated capital GH˘250,000.

While companies on the main market are required to report earnings quarterly, those listed on the SME market will report their earnings every six months or at most yearly.

Also, they must have a minimum of 20 shareholders, compared with 100 shareholders required for listing on the main bourse.

Mr Afedzie also explained that companies who list on the GAX would get an opportunity to access the SME Listing Support Fund to assist them meet their listing expenses.

He was, however, quick to add that, most Ghanaians, and SMEs for that matter, are typically averse to giving up part of their business ownership to list on the market as they want to own 100 per cent of their businesses.

The Director of Financial Sector Division of the Ministry of Finance who also confirmed this said the GSE was awaiting the listing of at least one SME to kick start the market and has thus encouraged them to take advantage of the initiative.

According to him, multinational companies seen around today accessed the capital market when they were small businesses, grew themselves and improved their corporate governance through the capital market.

“We therefore believe that if SMEs take advantage of the GAX, they will grow their business,” he said.