Investment brokers have warned of an undesirable effect on the Ghana Alternative Market (GAX) if efficient management systems are not put in place to facilitate subscription unto the platform.
According to them, the relative slow pace at which SMEs have responded to the GAX, could partially be blamed on the lack of proper management and leadership facing the country.
Being in existence for almost a year now, the GAX seeks to assist businesses in the SME sub-sector access funds to enhance growth.
Speaking to Citi Business News on his impressions on how the market has since performed, the Executive Director of CDH Asset Management, Seth Aryitey intimated that the lack of effective management has partially thwarted the prospects of the GAX.
“We lack so much capacity especially when it comes to management and leadership. It is something that we have all been talking about. If we are able to work on that so that we get efficient management and leadership in place, we would be able to improve the system. I can tell you that the prospects are bright.”
Mr. Aryitey also urged improved education to re-orient Ghanaian entrepreneurs on what he refers to as a self-centred approach in leading their businesses.
“There are cultural problems but there are more rooms for improvement. We need to educate our people and provide them with the relevant information. We need to let entrepreneurs understand that being self-centred is not the way to go but rather allow other people access to own parts of their companies,” he stated.
The Ghana Alternative Market (GAX) is a parallel market operated by the Ghana Stock Exchange and focuses on businesses with potential for growth.
The GAX accommodates companies at various stages of their development, including start-ups and existing enterprises, both small and medium.
Some of the benefits to businesses that subscribe unto the platform are; easier access to long term capital; access to long term capital at a relatively lower cost; improvement in the financial position of the GAX company.
Other benefits also include; enhanced status in the community; realization of value of investments as well as reduce risk and improved liquidity.
To qualify to list on the GAX, a company is expected to among other things have a minimum stated capital of GH¢250,000 at the time of listing.
The stated capital of GH¢250,000 shall be the capital after the company’s initial public offer but prior to listing.
Also, the public float of the applicant must constitute a minimum of twenty-five percent (25%) of the total number of issued shares.
The minimum number of public shareholders shall be twenty (20).
Meanwhile admission may be granted to a start-up company, provided the applicant submits to the GAX a 3-year business plan, demonstrating clearly the viability of the applicant whiles the company need not have recorded profits historically but must have the potential to make profit at least at the end of its third year of listing.
Listed companies on the GAX
Indigenous Company, Samba Foods was the first to have listed on the GAX after realizing its target of GH¢2.5 million by offering over 3 million ordinary shares to the investing public.
In addition, Meridian-Marshalls Holdings (MMH) Company Limited, owner of Meridian Pre-University and Marshalls University College also listed on the Ghana Alternative Market (GAX) to raise GH¢2.5million to finance infrastructural and faculty expansion projects.
Meanwhile Savings and Loans Company, afb (Ghana) PLC has listed on the GAX to raise GH¢ 38 million by offering bonds of GH¢ 30 million to commence tading on the GAX.
Bayport Financial Services Plc has also listed two tranches of its medium-term notes worth GH₵78.5 million, the largest Ghana cedi denominated bonds, on the Ghana Alternative Market (GAX).
The notes are part of a 200-million note programme to help the company reduce debt and boost working capital.
By: Pius Amihere Eduku/citibusinessnews.com/Ghana