Assessing the Impact of Stock Exchange Enlistment In Ghana : the Case of Produce Buying Company Limited
Date
2004-11-22
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Abstract
The study set out to examine the developmental stages of the Ghana Stock Exchange(GSE) since its inception, explore the benefits enjoyed by listed companies, examine problems and cost of enlistment on the GSE, undertake a trend analysis of the growth of the GSE, compare and contrast the performance of Produce Buying Company(PBC) since enlistment in terms of liquidity, profitability, activity and shareholders return and finally to make appropriate recommendations aimed at enhancing the performance of the Ghana Stock Exchange and the Produce Buying Company Limited.
The study found among other things that GSE seeks to provide benefits for companies, shareholders, government and all other stakeholders such as potential investors.
In the case of PBC, the study covered its historical background and provided listing of PBC shares on the GSE: the shareholding structure, operations and structure of the company, its organization strengths and weaknesses and a further analysis of its audited financial statements from 1997-2003 for comparison of pre-enlistment performance in terms of income, expenditure and profits.
The study revealed that Ghana Stock Exchange has chalked some successes in the area of the number of listed companies which have increased from 11 in 1990 to 25 in 2003. trends in share volumes and price have also increased from 22,000,000 shares since inception in 1990 to 96,330,000 shares in 2003, with the share values also appreciating from 0.06 billion in 1990 to ยข389,300 million in 2003. The GSE All Share Index which is the over-all market performance of the GSE has also improved over the years under review.
Finally, the study showed that pre Stock Exchange profitability of PBC is not the same as post Stock Exchange profitability because of improvements in key profitability indicators of the company after enlistment. Thus, PBC must work on its weaknesses and improve further on its strengths in taking advantage of the opportunities available in the environment for growth and sustainability.
Description
A thesis submitted to the Department of Economics and Industrial Management,
Kwame Nkrumah University of Science and Technology in partial
fulfilment of the requirements for the award of Master of Business Administration, 2004