Market analysts caution GSE over delisting of companies

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Some listed companies on the Ghana Stock Exchange (GSE) with small capitalization should be migrating to the Ghana Alternative Market (GAX) which is for small and medium enterprises, if the GSE continues to suspend companies who fall foul of its regulations.

This is coming from some market analysts who are of the view that it will be better to move the SMEs to the GAX market instead of delisting them from the Ghana Stock Exchange-main market.

The GSE on Monday August 28, 2017 suspended five companies-African Champion Industry, Clydestone Ghana, Golden Webb Limited, Pioneer Kitchenware and Transactions Solutions Limited for failing to comply with listing regulations. This included their failure to submit financial reports, non-payment of annual listing fees, failure to conduct Annual General Meeting, among others.

According to the exchange, the suspension of trading in the above companies will be in force until September 8, 2017, which is the deadline for the companies to rectify the anomalies.

Failure to do so it stated will attract further sanctions as per the GSE Listing Rules.
However on Tuesday August 29, 2017, the GSE lifted the suspension on Clydestone and Transaction Solutions, saying, the two companies have rectified all the anomalies that led to their suspension. Accordingly, it has lifted the suspension in trading of the shares of CLYD and TRANSOL that was imposed on the two companies with immediate effect.

In this regard, some market analysts cautioned the GSE to be careful in delisting companies from the Accra Bourse since such a move could be disincentive to companies that are considering listing on the Accra Bourse.
Head of Research at Databank Alex Boahene says the GSE is already battling with attracting companies to list on the capital market and therefore must reconsider any move of delisting companies that fails to meet listing regulations. “The GSE has only 40 listed companies. They have struggled to attract companies to list on the market so I will advise that they migrate companies that are struggling with the tough listing requirements of the main market to the GAX market”, he told Joy Business.

He however suggested that the GSE adopt an approach that will help struggling companies to meet their listing requirements.

The GSE is among the three strongest stock exchanges in ECOWAS that includes Nigerian Stock Exchange and BVRM which constitutes all Francophone countries.
Its market capitalization currently stands at about GHc57.7 billion whilst its year-to-date or GSE Composite Index stands at 38.81 percent.

Source: Augustine Amoah || The Finder

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