Stocks on the Ghana Alternative Market (GAX), the secondary board of Ghana Stock Exchange (GSE), have remained stationary in spite of renewed excitement in the equities market.

The broad market has rallied to a 28.7 percent gain on a year-to-date basis, undoing the almost 13 percent loss recorded at the end of last year. However, none of the five companies currently listed on the GAX have witnessed a price change over the past 12 months.

The GAX was introduced in 2013 to target SMEs by providing far less demanding listing requirements and rules than the main board. Shares in this segment account for 0.063 percent of the GSE’s market capitalisation of GH¢73.9billion.

Samba Foods, a wholly Ghanaian-owned food processing and preservation business specialising in the condiments and seasoning market, has remained flat over the past year at GH¢0.55. Similarly, Meridian Marshall Holdings, a provider of career-oriented post-secondary school education, is trading at GH¢0.11.

Agro processor Hords Ltd. GH and DigiCut Production and Advertising Limited have both traded at GH¢0.1 and GH¢0.09, respectively over the past 12 months. Intravenous Infusions Limited recorded a 20 percent drop in price from GH¢0.05 to GH¢0.04 in April 2022, and has remained the same since.

Pesewa One, the most recent listing on the GAX, exited the market on September 29, 2023 following a decision by shareholders to vote in favour of transferring its assets to a new entity, Pesewa ONE Franchise, which is incorporated in Delaware, USA.

Sluggishness due to reluctance of popular companies to list

A senior analyst at Tesah Capital, Joshua Adagbe, attributes sluggishness on the GAX to reluctance of other, perhaps better-known, companies to list. He believes that for this to happen, the culture and assumptions about ownership need to change, as many still think listing their companies means they willhave to relinquish ownership.

The analyst maintained that GAX has the potential to play a vital role in development of the Ghanaian economy by providing a platform for SMEs to raise capital and grow their businesses. But he stressed that more needs to be done in attracting more companies to list on the market; particularly well-known and profitable businesses, as this would help to boost liquidity and investor interest in the GAX

“By now, we should have seen the likes of Kasapreko, Ernest Chemist and the Tobinco’s of this world all listed on the stock market. Due to the familiarity of these brands and their profitability, many investors would love to own a part of the business,” Mr. Adagbe said.

He commended the GSE for its engagements and financial literacy campaigns, but added that “more noise” needs to be made from all stakeholders – investors, business owners and the market operators alike.

Last year the GSE said it was optimistic about additional market listings, as managers of the stock exchange had engaged more than 140 small- and medium-sized enterprises in partnership with the Association of Ghana Industries (AGI), with further revisions to listing rules to be rolled out in order to enhance listings.