Editorial: The drought is over, long may the rains last

At last, the bell rang again. After 87 long months of silence, the Ghana Stock Exchange (GSE)has witnessed a proper initial public offering.

First Atlantic Bank’s listing is not just another milestone to be celebrated by the financial services provider and related parties; it is a moment many had quietly begun to doubt would ever return. For a market starved of new equity, this is no small event.

The facts are encouraging. The offer was oversubscribed. The shares were listed at GH¢7.3 and edged up to GH¢7.7 in early trading. Regulators, fund managers and investors turned up in force.

For once, the conversation around the new listings was not about stagnation, valuation collapse or fear of down rounds, but about confidence. In a market that has gone more than seven years without a main-board IPO, that alone is worth noting.

But beyond the numbers, this listing exposes a deeper question, why did it take so long? Ghana’s equities market has endured a prolonged drought not because businesses disappeared, but because confidence did.

Weak valuations, policy uncertainty, and macroeconomic shocks scared companies away. The capital gains tax, ignored once again during the last budget has also not helped mattea.

Even before the recent economic crisis, equities had struggled in some regards, with share price changes triggering panic among some investors. Many firms simply chose to stay private and wait out the storm.

First Atlantic Bank’s decision to list therefore deserves recognition. Listing a bank is not for the faint-hearted. It invites constant scrutiny, tougher disclosure rules and the discipline of the market. It forces a company to open its books not once, but always. That the bank still went ahead says something about its governance posture and long-term ambition.

Yet one listing does not make a market. The danger now is self-congratulation. If this moment is treated as an exception rather than a beginning, the drought will quietly return. The GSE is hopeful this will become a frequent, even monthly occurrence.

Broader policymakers must confront the issues repeatedly raised by market operators: punitive taxes, thin liquidity and inconsistent incentives. Regulators must balance vigilance with efficiency. Investors, too, must show that their interest extends beyond opening day.

First Atlantic has shown that it can be done. The exchange has proved it still works. The question is whether others will follow, and whether the system will make it easier for them to do so.

The bell has rung. The drought may be over. But unless reforms follow, the rains may yet be brief.

 

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