Head of Research at Data Bank, Mr. Alex Boahene has revealed that a significant number of businesses have been delisted from the Ghana Stock exchange as a result of the failure of the companies to deliver dividends and share price appreciation since 2017.
In a span of 3 years, about 8 companies have either voluntarily delisted or have compulsorily been delisted.
Mr. Boahene in an interview with universnews monitored by Talksafrica.com stated that investors are not financing these companies because they have failed to deliver in recent times.
“For sure I think those companies have been struggling for some years. The reason for investors investing in companies is because they want the companies to be profitable so that they can pay dividends to them. They want their share prices to actually appreciate the market so that they can make capital gains. But if you look at recently, these companies have failed to deliver that, both dividends and share price appreciation.”
Mr. Alex Boahene further encouraged the companies to leave the public spotlight, re-organize themselves, and return to the market.
“It stands to reason that, when it gets to a point, it is probably in the interest of the shareholders and the investor community for these companies to go off the market so that they can re-strategize and when things improve, they can come back and apply again, and lift on the market again.
Mr. Alex Boahene also advised other companies, especially the Small and Medium-sized Enterprises (SME’S) to give thought to listing on the Ghana Alternative Markets (GAX), to avoid the strict compliance standards of the main market.
“In terms of encouraging companies to lift on the market, I think more companies should be pushed so that at least we can get a lot more Small and Medium-sized Enterprises (SMEs) coming onto the market. The rules on GAX are more relaxed than the main market. Because even in terms of financial reporting, GAX conducts its reporting twice in a year while on the main market, it is done four times in a year.”
The companies that voluntarily delisted were Mechanical Lloyd and PZ Cussons while Pioneer Kitchen Ware, African Champion Industries, Golden Web, Transactions Solution Ghana, and UT Bank underwent compulsory delisting.