afb Ghana reverses impact of foreign exchange losses
The Managing Director of afb Ghana, Mr Arnold Parker, has said listing on the Ghana Alternative Market (GAX) of the Ghana Stock Exchange (GSE) has enabled the company to raise enough capital to pay off all its US dollar liabilities.
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The company listed on the GAX in July 2015 and raised GH¢40 million, which it used to wipe off over GH¢9 million losses and increase its stated capital from GH¢7 million to GH¢31 million.
Speaking at the facts behind the figures session on the Ghana Stock Exchange (GSE), Mr Parker said turning to the market to raise money had largely inured to the benefit of the company.
“The successful issuance and listing of the corporate bonds on the GAX has allowed the company to redeem all foreign denominated liabilities, thereby eliminating all foreign currency risks for the business,” he said.
The GAX was introduced by the GSE for Small and Medium Enterprises (SMEs) that may not meet the requirements for listing on the main bourse to raise additional capital to finance its operations.
Explaining the rationale behind the company’s growth trajectory in 2015, Mr Parker said the key focus of management for the 2015 financial year was to strategically position the business for future growth and success, hence its turning to the GAX.
In 2016 and beyond, he said, the company would focus on growing its balance sheet and remaining profitable.
Bridging housing deficit
afb Ghana, which provides innovative consumer credit products, said it would develop a credit facility to help consumers access funds to acquire homes to help bridge the country’s growing housing deficit.
Currently, Ghana’s growing housing deficit is estimated at over 1.7 million housing units, and with most houses selling beyond the reach of the average Ghanaian worker, the deficit still exists despite interventions by government.
Mr Parker said, “in developing our products and services, we look at how we can possibly in our own small way and in our status as a finance house solve the housing deficit that we currently have. We talk about affordable housing and we currently charge about US$40,000 for a house. Is US$40,000 affordable for a Ghanaian worker?”
He said currently eight per cent of the company’s loan portfolio was related to home related loans, but was hoping to grow this over time to meet the demand of several home loan applicants.
“It is 10 per cent currently, but perhaps it can be 20 or 30 per cent if we develop tailor-made products for them; because there is a real need for housing and we think we should be able to do something about that segment,” he said in an interview later.
GSE in 2016
The Ghana Stock Exchange (GSE) is optimistic that the market will bounce back to profitability in 2016 as economic conditions improve in the country.
With a fairly stable exchange rate, declining Treasury bill rates and improved energy conditions, being seen in the first few months of 2016, listed companies are said to be bouncing back into profitability, which will ultimately improve performance of the market.
The Managing Director of the GSE, Mr Kofi Yamoah, who said this in Accra, explained that the negative effects of the country’s energy challenges, rising inflation and foreign exchange volatility reflected in the performance of the listed companies in 2015.
“Fortunately, the energy issues seem to be behind us and we are beginning to see many of the listed companies bouncing back into profitability and making strong returns. We hope that will continue under the stable economic environment of continued stability so the listed companies will perform much better,” he said after the session.