The Ghana Stock Exchange (GSE) is in discussion with the State Interest and Governance Authority (SIGA) to get state-owned enterprises to list on the local bourse.

The discussions, when completed, will see the state enterprises offload part of their shares on the exchange in return for additional capital.

“We have been talking to them for a while now and very soon, we will hear an announcement from them. Through the Minister of Finance, SIGA and all the relevant entities, work towards getting some of the SOEs to utilise the capital market to raise capital is ongoing,” the Managing Director, Mr Ekow Afedzi, said at the media launch of the GSE’s 30th anniversary celebration.

Restructuring GAX

Mr Afedzi also pointed out that as part of the GSE’s strategic plan, it was taking a second look at the structure the Ghana Alternative Market (GAX).

“We have certain features of GAX that have made it unattractive to lead managers and issuers to sponsor companies on GAX, and we are looking at ways to resolve some of these challenges,” he said.

He said the GSE was also going into a collaboration with the Association of Ghana Industries (AGI).

“We are discussing with them to have an incubation programme where we will identify a few companies and groom them over a few years and prepare them to be able to get onto the market.

“This will help us get companies that are strong, accountable and attractive to investors,” he noted.

Local participation on equity market

Mr Afedzi also noted that the exchange was beginning to see more local investors participate in its equity market.

In terms of value, he said the participation level between local and foreign investors was now 50:50, compared to 10 years ago when the market was heavily dominated by foreign investors.

“Participation in the equity market has changed over the past 10 years. A few years ago, we had more participation from foreign investors but as we speak now, it is almost 50:50. We are getting more domestic investors in equity market, which is very good for the country.

In terms of volume, he said the foreign investors were just over a 1000, with local investors close to 220,000.

He said it was an indication that the equity market was becoming more attractive to local investors.

“The equity market has become attractive to local investors and that is one of the reasons why one of our key initiatives going forward is getting more pension funds to invest in the equity market other than government instruments,” he stated.

Demutualisation

Commenting on plans for the exchange to demutualise, which has been ongoing for years now, Mr Afedzi said, “We have talked about it for some time now, but it will surely come to fruition.”

“Next year, we will see more progress in terms of this. It is simply changing our status from a guarantee company to a company limited by shares. When this happens, what it means is that we are going to have shareholders.

“The question, however, is will it be the panacea to all of our problems? As we demutualise, we have to make sure that all the key challenges of the exchange are looked at,” he noted.