by kofi ahovi
Stakeholders of Ghana’s capital market have expressed optimism over the impending listing of Tullow Oil, Kosmos Energy and Precious Minerals Marketing Company (PMMC) shares on the Ghana Stock Exchange (GSE).
The listing of the shares of the two oil companies and PMMC would significantly improve the bourse’s visibility and market capitalization. GSE began last week with a market capitalization of GH¢20,342.40 but moved by GH¢107.41 to GH¢20,450.82.
Kofi Yamoah, the Managing Director of GSE, recently described the impending listing of the shares of two oil companies as welcomed news since it would boost activities on the market. According to him, it was in line with plans to get many foreign-owned companies to cede some ownership to Ghanaians through the stock market.
“We want to have a situation where we can improve the supply side of the market and when you talk about the supply side we are looking at the variety of companies that are listed on this market – and the more we have companies like Tullow listing, the more we improve the supply side of the market so that investors can have a bigger variety to choose from in terms of investing in this market,” he said.
Yamoah further said the exchange was advocating a local content legislation for the capital market that would compel all multinational firms in Ghana to float some shares on the Accra Bourse to enable Ghanaians share in their fortunes.
The Ghanaian bourse recently begun to turn on a positive trend after recording bear trading, which was perhaps was one of the reasons that Comet Properties, a real estate developer, failed in its Initial Public Offer (IPO)in the beginning of this year. Indeed bearish investor sentiments persuaded several companies to postpone or out rightly cancel plans to raise new equity capital on the GSE over the past couple of years. Now however, the market is rising again (the all-index has climbed by some 18% since the beginning of this year) and companies are regaining their confidence with regards to doing IPOs.
Tullow, Kosmos and PMMC may have had their timing right by implementing the process to list as the market is now picking up and recording positive gains.
In a move to make the capital market more vibrant and liquid, the Board of Directors of the GSE recently ordered all the listed companies in the country especially those with less than 100 million shares to a minimum of 100 million by the end of December 2012. The directive is to enable the exchange to become a vibrant stock exchange.
By so doing more tradable shares will be created to enable more individuals and portfolio investors buy into listed companies. To do this, listed companies would either issue bonus shares to their shareholders, which companies like Standard Chartered Bank had already done, rights issue or exercise a share split.
However some listed companies already have more than 100 million shares as at December 2010. For instance, Ecobank Ghana Limited and UT Bank limited shares stands at 230.13 million and 248.75 million respectively by December, last year.
By this directive some listed companies need to create more than 80 million shares in addition to their existing ones by December, next year.
Analysts believe that this directive is very important because majority shareholders of listed companies are institutional investors such as the Social Security and National Trust (SSNIT) which hardly trades in its shares thereby making the market illiquid.
Tullow Oil, operator of Ghana’s Jubilee oilfield, expects to raise about GH¢128million through a public offer as it prepares to list four million of its new ordinary shares on the Ghana Stock Exchange (GSE) at GH¢31 per share. The public offer is expected to end this Monday July 4,201.
While Kosmos Energy, plans to raise between US$50 and US$60 million to fund its oil development operations in the country.
At a media briefing in Accra, the company’s Chief Executive Officer (CEO), Brian Maxted, said the decision to list was a demonstration of the company's commitment to stay in Ghana and also help to develop the country.
"Kosmos is here to stay for the long time and as part of our long-term commitments to our operations in Ghana, we will be listing on the GSE before the end of this year to give Ghanaians the opportunity to be part owners of our company," Maxted said.
Kosmos Energy has raised nearly US$600 million in a successful Initial Public Offer on the New York Stock Exchange (NYSE). The shares finished their first day of trading at US$18.24, or 1.3% above the IPO price, on the Exchange. This valued Kosmos at nearly US$7 billion despite its lack of profits but was in line with analysts' expectations based on its oil reserves.
With this initiative, Kosmos has caught the attention of potential buyers eager to obtain its assets in Ghana, where Kosmos made one of the world's largest recent oil discoveries in 2007.
In Ghana, investors will have to prepare to buy Kosmos share at a GH¢27.74 per share, lower than Tullow Oil’s share price, which is priced at GH¢31.00 per share.
The exchange incorporated in July 1989 commenced in 1990 currently has 33 listed companies. Criteria for listing include capital adequacy, profitability, spread of shares, years of existence and management efficiency.
Stakeholders of Ghana’s capital market have expressed optimism over the impending listing of Tullow Oil, Kosmos Energy and Precious Minerals Marketing Company (PMMC) shares on the Ghana Stock Exchange (GSE).
The listing of the shares of the two oil companies and PMMC would significantly improve the bourse’s visibility and market capitalization. GSE began last week with a market capitalization of GH¢20,342.40 but moved by GH¢107.41 to GH¢20,450.82.
Kofi Yamoah, the Managing Director of GSE, recently described the impending listing of the shares of two oil companies as welcomed news since it would boost activities on the market. According to him, it was in line with plans to get many foreign-owned companies to cede some ownership to Ghanaians through the stock market.
“We want to have a situation where we can improve the supply side of the market and when you talk about the supply side we are looking at the variety of companies that are listed on this market – and the more we have companies like Tullow listing, the more we improve the supply side of the market so that investors can have a bigger variety to choose from in terms of investing in this market,” he said.
Yamoah further said the exchange was advocating a local content legislation for the capital market that would compel all multinational firms in Ghana to float some shares on the Accra Bourse to enable Ghanaians share in their fortunes.
The Ghanaian bourse recently begun to turn on a positive trend after recording bear trading, which was perhaps was one of the reasons that Comet Properties, a real estate developer, failed in its Initial Public Offer (IPO)in the beginning of this year. Indeed bearish investor sentiments persuaded several companies to postpone or out rightly cancel plans to raise new equity capital on the GSE over the past couple of years. Now however, the market is rising again (the all-index has climbed by some 18% since the beginning of this year) and companies are regaining their confidence with regards to doing IPOs.
Tullow, Kosmos and PMMC may have had their timing right by implementing the process to list as the market is now picking up and recording positive gains.
In a move to make the capital market more vibrant and liquid, the Board of Directors of the GSE recently ordered all the listed companies in the country especially those with less than 100 million shares to a minimum of 100 million by the end of December 2012. The directive is to enable the exchange to become a vibrant stock exchange.
By so doing more tradable shares will be created to enable more individuals and portfolio investors buy into listed companies. To do this, listed companies would either issue bonus shares to their shareholders, which companies like Standard Chartered Bank had already done, rights issue or exercise a share split.
However some listed companies already have more than 100 million shares as at December 2010. For instance, Ecobank Ghana Limited and UT Bank limited shares stands at 230.13 million and 248.75 million respectively by December, last year.
By this directive some listed companies need to create more than 80 million shares in addition to their existing ones by December, next year.
Analysts believe that this directive is very important because majority shareholders of listed companies are institutional investors such as the Social Security and National Trust (SSNIT) which hardly trades in its shares thereby making the market illiquid.
Tullow Oil, operator of Ghana’s Jubilee oilfield, expects to raise about GH¢128million through a public offer as it prepares to list four million of its new ordinary shares on the Ghana Stock Exchange (GSE) at GH¢31 per share. The public offer is expected to end this Monday July 4,201.
While Kosmos Energy, plans to raise between US$50 and US$60 million to fund its oil development operations in the country.
At a media briefing in Accra, the company’s Chief Executive Officer (CEO), Brian Maxted, said the decision to list was a demonstration of the company's commitment to stay in Ghana and also help to develop the country.
"Kosmos is here to stay for the long time and as part of our long-term commitments to our operations in Ghana, we will be listing on the GSE before the end of this year to give Ghanaians the opportunity to be part owners of our company," Maxted said.
Kosmos Energy has raised nearly US$600 million in a successful Initial Public Offer on the New York Stock Exchange (NYSE). The shares finished their first day of trading at US$18.24, or 1.3% above the IPO price, on the Exchange. This valued Kosmos at nearly US$7 billion despite its lack of profits but was in line with analysts' expectations based on its oil reserves.
With this initiative, Kosmos has caught the attention of potential buyers eager to obtain its assets in Ghana, where Kosmos made one of the world's largest recent oil discoveries in 2007.
In Ghana, investors will have to prepare to buy Kosmos share at a GH¢27.74 per share, lower than Tullow Oil’s share price, which is priced at GH¢31.00 per share.
The exchange incorporated in July 1989 commenced in 1990 currently has 33 listed companies. Criteria for listing include capital adequacy, profitability, spread of shares, years of existence and management efficiency.
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