The Ghana Alternative Market: An agenda we must all push
I was glad to read that another company, Meridian-Marshalls Holding, has made a move to be on the Ghana Alternative Market, which will bring the number of companies on this market to 3, although I would have loved to see a rush by many indigenous companies to this market.
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The Ghana Alternative Market, for want of a better explanation, is a separate stock market
meant for small to medium-scale enterprises, obviously with good growth prospect. This ‘Alternative’ market, just as the name implies, is to create a separate platform for small companies to be able to raise long-term capital without going through all the stringent requirements of the main Stock Exchange. It is such a big window of opportunity for our capital-starved indigenous businesses.
The idea of an alternative market was mooted long ago, as part of the tireless efforts by the management of the Ghana Stock Exchange and Securities industry players in general to deepen stock market activity in the country. I know it took a lot of efforts over the years to get this market to be a reality and at a point the desire to let this happen was so palpable when you interacted with key players on the Exchange.
Happily it is now a reality but the story does not end there. The setting up of this Alternative Market requires a backing of a certain culture that cannot be the sole responsibility of the managers of the Ghana Stock Exchange and the Securities and Exchange Commission, because the benefit of a thriving Alternative Market and the Stock Exchange itself is so enormous that no amount of push to make it work will constitute a waste of whatever resources invested.
Benefits of GAX
I am pained to see how there is no buzzing of activity on these markets. My reason being that these are platforms for proper wealth creation, the type that to a very large extent, can be participated in by most people in different ways.
Companies can go and raise badly needed long-term capital and avoid the dangerous behaviour of borrowing short term to finance long-term project- such a terrible mismatch that we have had to endure as businesses and by extension as consumers.
Also, individuals can create wealth for themselves by buying shares on these markets. It makes sense to invest a sizeable amount of money when buying shares, so you don’t end up with just 10 shares in a company.
So I agree not all of us can buy shares significant enough to make you comfortable or wealthy. But the opportunities of the market do not end there. Its tentacles stretch to reach even the poor who can indirectly buy shares on these markets by investing in mutual funds and there are several of them.
The benefits that will accrue to our indigenous businesses which are able to successfully raise capital on either the Alternative Market or the main Stock Exchange are enormous. But the ability to raise capital successfully is a function of several factors which require all hands on deck. The two markets haven’t got any money lying down to be picked by a company in search of capital.
The markets must have potential investors and typically when investors are mentioned, we all imagine some wealthy set of people or institutions but it includes just any one who can either directly go and buys shares or invest in mutual funds.
Once there is that interest in investing directly or indirectly on the markets, companies which need capital will have less challenge in raising them.
That sort of interest must be created by all of us, though the managements of the regulatory bodies have bigger roles.
Govt support
I am yet to hear a decisive statement from government, strong enough to galvanise us around investing on the market. I think this is necessary and urgent because a thriving market (of course the macroeconomic environment has a bearing on the performance of the market) can open up several blocked pores of the economy.
If we decide to see the markets as catalysts for economic growth, development and wealth creation and act accordingly, we will have great results with far-reaching impacts on so many people, because, as I said earlier, the markets have opportunities for all – rich and poor.
It appears, we are all overwhelmed by the twin troubles of power and the shaky macroeconomic conditions and understandably so but what better time to look to other potential solutions than when you are in difficulty. Yea, using the capital market as an instrument of growth may not give you short-term solutions but it will give you a sustainable solution, which is what we need.
How I wish the public offer by Meridian-Marshalls Holding would dominate business news in the media, for the simple reason of generating some excitement about the market.
I wish to hear and read the possible outcomes of an educational institution getting onto the market with all the related analysis just to excite the business community.
In fact, we really do need something to excite us in these times, don’t we? Basically, all I am asking for is more media attention for the Stock Market, because I know the kind of public interest that can be aroused.
Let’s flesh out the issues and excite the public about the move by another company to get onto the Alternative Market. Let’s talk about those which are also working to come on board. Let’s just generate some buzz…. — GB