By Elikem Mensah
UT Financial Services, the biggest non-bank finance institution, which launched its Initial Public Offer(IPO) fort night ago, is likely to be over subscribed by the close of its offer period
According financial analyst, the company is coming to the market with a price earnings ratio of 14.25, which is lower than all but one of the eight other financial stocks on the Ghana Stock Exchange .
The average P/E ratio for financial stocks on the Accra bourse is 20 with the highest of the financial stocks reaching 30. This indicates that UT’s shares are being offered at rock-bottom price compared to other listed stocks, despite its strong credentials as an outstanding non-bank financial institution.
In 2007, UT’s return on average invested capital was 247 per cent, significantly higher than that achieved by the banking sector last year. The company is envisaging a growth of 25 per cent for the next five years. This is bound to attract more individual and institutional investor to UT share offer.
The company is putting on sale 90.2 million shares at GH¢0.30 per share. This is made up of 80.2 million shares relinquished by two shareholders and an additional 10 million shares to increase the capital of the company.
Captain Prince Kofi Amoabeng (Rtd), Chief Executive Officer of UT, said the injection of fresh capital from the offer would be used to strengthen the company’s balance sheet, expand the company’s resource base for funding of new loans and expansion into new markets.
“The fresh capital will help provide investment capital to reinforce the contributions of the various units of the company and enhance growth generally,” he said.
UT already operates a branch in Germany and plans to explore opportunities in the Nigerian market is currently underway. The listing of UT Financial Services will give the company a market capitalisation of not less than GH¢63.2 million.
UT Financial Services, the biggest non-bank finance institution, which launched its Initial Public Offer(IPO) fort night ago, is likely to be over subscribed by the close of its offer period
According financial analyst, the company is coming to the market with a price earnings ratio of 14.25, which is lower than all but one of the eight other financial stocks on the Ghana Stock Exchange .
The average P/E ratio for financial stocks on the Accra bourse is 20 with the highest of the financial stocks reaching 30. This indicates that UT’s shares are being offered at rock-bottom price compared to other listed stocks, despite its strong credentials as an outstanding non-bank financial institution.
In 2007, UT’s return on average invested capital was 247 per cent, significantly higher than that achieved by the banking sector last year. The company is envisaging a growth of 25 per cent for the next five years. This is bound to attract more individual and institutional investor to UT share offer.
The company is putting on sale 90.2 million shares at GH¢0.30 per share. This is made up of 80.2 million shares relinquished by two shareholders and an additional 10 million shares to increase the capital of the company.
Captain Prince Kofi Amoabeng (Rtd), Chief Executive Officer of UT, said the injection of fresh capital from the offer would be used to strengthen the company’s balance sheet, expand the company’s resource base for funding of new loans and expansion into new markets.
“The fresh capital will help provide investment capital to reinforce the contributions of the various units of the company and enhance growth generally,” he said.
UT already operates a branch in Germany and plans to explore opportunities in the Nigerian market is currently underway. The listing of UT Financial Services will give the company a market capitalisation of not less than GH¢63.2 million.
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