CAL Bank listed on Stock Exchange
Accra, Nov. 5, GNA - CAL Bank Limited, the highest oversubscribed equity made its debut on the Ghana Stock Exchange (GSE) on Friday with a total amount of 292 billion cedis accruing from its initial public offer (IPO).
The bank, the 30th to be listed on the GSE, puts the exchange's total market capitalization beyond the 97 trillion cedi mark.
With an initial public offer price of 2,000 cedis, CAL Bank raised more than the 63 billion cedis it required but could not be allowed to raise the offer to 100 billion cedis because the rules were against it.
Mr Frank Adu (Jr), Managing Director, said the total amount raised represented 450 per cent in excess of the figure required by the bank. He described the achievement as ecstatic saying: "it is humbling because the market has demonstrated massively that they believe in CAL as an investment..."
Mr Adu said the CAL Bank was new on the scene but expressed the hope that it would introduce new products and make an impact on the foreign exchange market and "...our goal is to become a 100 million dollar bank in the next five years".
He said the vision was important because it was only when the local banks were grown that the financial sector could support the local industry.
In response to the Bank's inability to increase the 63 billion cedis, Mr Ekow Acquaah-Arhin, a Director of the Securities Exchange Commission, said as part of the regulations, a company wishing to go public was required to state the expected amount in its prospectus.
He told the GNA that to go beyond the requirement, the regulations regarding over subscription of an IPO would have to be amended. Mr Kofi Yamoah, Managing Director of the GSE, said CAL had come at a time when several banks were going universal, therefore, the additional capitalization would enable it to offer more competitive and improved service to its growing clients.
He said, "The success of the bank's IPO was a real proof that whether it was a private company seeking to raise funds for expansion or a state-owned enterprise wishing to re-capitalize, the stock market was a direction one could not overlook".
Mr Yamoah urged ailing state owned companies, especially metropolitan assemblies to take the advantage and issue bonds to undertake self-sustaining or profitable infrastructure.
"Our Ghanaian entrepreneur must be encourage to access the stock market so that with accelerated growth and expansion, they can become much bigger entities making greater contributions to the economy..." he said.
Mr Yamoah called on the companies that wished to list in 2005 to begin their groundwork because "we envisage a crowded 'tarmac for IPO take-off' in the immediate years ahead".