GAX Listing Requirement: SMEs to appoint liquidity providers
The Ghana Stock Exchange (GSE) has announced that it will be reviewing its listing requirements for small and medium-sized enterprises (SMEs) as part of its efforts to ensure a vibrant Ghana Alternative Market (GAX). The move comes as the GSE seeks to promote the growth of SMEs in Ghana by providing them with greater access to capital markets.
Speaking during NorvanReports’ Twitter Space Conversation on Sunday, February 26, 2023 themed “Ghana Stock Exchange – Whence Cometh the Revival”, a consultant at the GSE, David Tetteh, noted that SMEs that are already listed on the GAX, as well as those seeking to list, will now be required to appoint liquidity providers. These providers, who will be brokers, will buy and sell orders, enabling investors to buy and sell equities with ease, thanks to the availability of a quota to execute these trades.
The Ghana Alternative Market (GAX) is a stock exchange that is designed to provide a platform for small and medium-sized enterprises (SMEs) to raise capital from the capital market. The GAX was launched in 2013 by the Ghana Stock Exchange (GSE) to provide an alternative to the main market for SMEs that do not meet the listing requirements of the GSE’s main board.
The GAX is specifically designed for SMEs that have potential for growth and expansion but may not yet have the financial track record or size required to meet the listing requirements of the GSE’s main board. To be listed on the GAX, SMEs are required to meet certain listing requirements, such as having a minimum capital requirement and having been in operation for a minimum of two years.
The appointment of liquidity providers is a crucial step in enhancing the trading activities of SMEs on the GAX. By providing a continuous market for securities, liquidity providers play a crucial role in ensuring that trades can be executed efficiently and at fair prices, thereby enhancing market liquidity.
In addition, the appointment of liquidity providers can help to boost the visibility and credibility of the GAX. This, in turn, can make the GAX more attractive to both domestic and foreign investors, providing SMEs with greater access to much-needed capital.
The move by the GSE to review its listing requirements and appoint liquidity providers is a positive step towards revitalizing the Ghana Alternative Market. It underscores the GSE’s commitment to promoting the growth of SMEs in Ghana, which is vital to the overall development of the country’s economy.
Moreover, it is an acknowledgement of the critical role that SMEs play in driving economic growth and job creation. SMEs are a vital source of innovation and job creation in Ghana, and the GSE’s efforts to support them are essential in creating a more vibrant and dynamic economy.
The Ghana Stock Exchange’s decision to review its listing requirements and appoint liquidity providers is a welcome development for the country’s SMEs. It is a demonstration of the GSE’s commitment to promoting the growth and development of SMEs in Ghana, which is vital for the country’s long-term economic prosperity. As Ghana seeks to position itself as a hub of economic growth in West Africa, initiatives such as this will be crucial in attracting the investment and talent needed to drive the country forward.
