GH¢10b Private Pensions Funds available for investments in GSE securities
She, therefore, called on Specified Entities, including State-Owned Enterprises (SOEs), to take advantage of such financing and investment opportunities to enhance their operations and make them economically viable.
Ms Amoah further urged Specified Entities to assess and raise Patient Long-term Capital by becoming issuers of equity or debt securities as a support mechanism for highly promising companies for their strategic growth.
That, among others, she noted was the “missing piece in the financing innovation puzzle” in Ghana, which the GSE was collaborating with the State Interests and Governance Authority (SIGA), and SOEs to resolve.
“I am inviting SOEs to take advantage of this and the enhanced corporate governance practices that the GSE offers so that together, we can grow economically and build the country,” she said.
Ms Amoah was speaking in an interview with the Ghana News Agency on the sidelines of the 2022 Policy and Governance Forum, organised SIGA and other partners on the theme: “Improving the Performance of Specified Entities: Leadership and Technology.”
As at the end of 2020, the National Pensions Regulatory Authority allowed the Private Pensions Funds to invest up to GH¢35 billion of their funds in Corporate Debt Securities listed on the Ghana Stock Exchange.
Currently, there are 183 Specified Entities in Government’s records consisting of 51 State-Owned Enterprises (SOEs), 43 Joint Venture Companies (JVC) and 89 Other State Entities (OSEs).
The 2020 State Ownership Report Analysis showed that the performance of Specified Entities had largely trended downwards.
SOEs consistently posted aggregate net losses from the 2015 volumes of GH¢2.1billion to 2020, which recorded an amount of GH¢5.3 billion losses – a compound annual growth of 16.2 per cent.
Among the 44 SOEs and 16 JVCs scored in the draft 2020 SOEs report, 50 per cent of SOEs and 63 per cent JVCs reported losses, and out of the 56 SOEs covered, 34 per cent also posted deficits.
The Deputy MD, therefore, stated that as SOEs planned to grow and do better, there was a need to strengthen effective collaboration with SIGA, the Ministry of Public Enterprises, and the Ministry of Finance to do internal reviews of companies’s needs, generate market readiness reports and fashion out a roadmap for companies that needed capital injection.
She said there was a pool of investments from Local Pensions Funds and Foreign Funds that could be accessed by Specified Entities, including SOEs.
Ms Amoah said, as of December 2020, the entire pensions sector had GH¢33billion of assets under management.
Out of the amount, GH¢22billion was with private pensions companies and GH¢11billion with the Social Security and National Insurance Trust (SSNIT).
She said, those funds were looking for investment opportunities and that Specialised Entities could tap into that to strategically grow their operations.
Touching on how companies listed on GSE, Ms Amoah said to list on the main market, the company must have existed for three years and must have made reasonable pre-tax profit or have the capacity to demonstrate to investors that it would become profitable.
On the Alternative Market, she said, starts-ups could list but required a business plan showing profits within three years and for the Fixed Income Market, three years with reasonable Pre-tax profit.
She explained that one area that was of interest to investors was a company’s corporate governance practices and said such companies must demonstrate capacity.
She added that on the main Market Board, the company must be fit and proper with a composition to include 50 per cent non-Executive and 25 per cent Independent Directors.
The Minimum Stated Capital for listing on the GSE, she said, was GH¢1million and for Alternative Market the minimum capital requirement was GH¢250,000 while the Fixed Income Market required a minimum of GH¢500,000 or could be waived.
She said one of the ways of raising capital was an Initial Public Offering (IPO), which among other requirements, involved six steps including; the composition and appointment of a Transactional Advisory Team, processing of roadmap and timetable for offering and listing, book building, finalising transaction pricing, investor appetite and key approvals.