Ecobank EGM passes Governance Action Plan - Press Release

Press Release on 3rd March 2014: 

"Ecobank shareholders meeting at an Extraordinary General Meeting today passed the Governance Action Plan proposed by the Board of Directors in compliance with the recommendations of the Securities & Exchange Commission (SEC) of Nigeria and contained in a joint report by SEC and the international firm, KPMG. The implementation of the detailed 51 point plan will commence immediately.  

At their meeting, which was attended by institutional shareholders as well as minority shareholders, the current 12 person Board of Directors of Ecobank Transnational Incorporated was retained following the decision by the institutional shareholders of the PIC, AMCON and IFC to withdraw a motion which they had proposed to create a smaller Interim Board. This would have run the Bank until immediately after the presentation of the 2013 results is expected to take place in June.

The Extraordinary General Meeting also passed resolutions to amend the Company’s Articles of Association. Under the new Articles of Association ETI shall not undertake any acquisition, merger or disposal of the Company’s assets whose value is equal to or above 20% of the book value of the Company without the approval of a simple majority of the shareholders present in General Meeting.  Shareholders voted to limit the maximum size of the Board be limited to fifteen (15) members and to ensure that no Directors could serve more than nine years in total.

A resolution to authorize the Board of Directors to raise additional capital as the Company may require up of up to twenty percent (20%) of the current issued capital of the Company, without reference to the General Meeting, to at any time within a period of three years from the date of its adoption was not passed.

- END –"

Earnings Season on the Ghana Stock Exchange: Half Year Reports

We are in the first half Earnings Season on the Ghana Stock Exchange and in my earlier post about Benso Oil Palm Plantation (BOPP), i.e. Half Year Performance of BOPP, I looked at how BOPP performed on the exchange and for the first half. Below are the various performances for some of the companies listed on GSE.

UT Bank

UT Bank Ltd (UTB), an indigenous bank, have reported an 89.23% surge in profit after tax, from GHS 4.69m in 2011 half year results to GHS8.87m for the same period in 2012.

Charting the Banking Sector of the Ghana Stock Exchange

This is the second part of my previous post, 'Focusing on the Banking sector of the Ghana Stock Exchange (GSE) (Part I)'. After looking at the current standings of the two banks, HFC Bank and Ghana Commercial Bank on the GSE, let's now focus on Ecobank Ghana (EBG) and Standard Chartered Bank (SCB). 

I would like us to go strictly by charts of the various price movements on the exchange and some key statistics from January 2012 to date.

Ghana Stock Exchange (GSE): Market Update: 08.05.12

In today's trading on the Ghana Stock Exchange, the GSE Composite Index went up by 7.13 point to close at 1,059.64 points. A gain in the share price of Ecobank Transnational Incorporated (ETI) held off the losses in two other equities to push the Index.
Since ETI is a financial stock, the GSE Financial Stock Index also closed at 921.40 points from a previous of 910.92 points. This Index is still trading below the base index of 1000 points. As reported by CAL Brokers (CBL), the overall market return climbed to 9.35%.
The volume of shares traded increased by 57.81% amounting to a 12.93% increase in value, compared to the previous session. About 0.28 million shares valued at GHS 0.11 million were traded.
Out of the total volume traded, GOIL out-performed all other equities by trading 83.45 % of volume and this is about 77.09% of the traded value.
ETI was the only gainer and although it closed at GHS 0.14 from GHS 0.13 (1 pesewa gained), it had the capacity to move the market index up by some points despite the loses recorded by Standard Chartered Bank (SCB) [ -0.1%] and TOTAL [-0.15%] to close at GHS 51.30 and GHS 26.14 respectively.

Courtesy: Ghana Stock Exchange & CAL Brokers Ltd (CBL)

Only 38 West African companies made it to the list of Africa's Top 250 companies

Over thousands of companies are registered in West Africa. Most of which are registered in Nigeria, Ghana and Cote d' Ivoire. But despite the numbers, only thirty eight of  West African companies made it to the list of Africa's Top 250 Companies.

Africa's Top 250 Companies list is compiled annually by the African Business team and in the April issue of the AFRICAN BUSINESS magazine, financial data from Dr. Ayo Salami, (co-founder of African Business Research Ltd) as at 31st December 2011 indicated that

Dividend Payments released for some companies on the Ghana Stock Exchange

The time has come again when shareholders look up to their various companies hoping dividends would be paid. Dividend investors are also looking for dividend stocks on the Ghana Stock Exchange whiles other type of investors hope the profits would be plough back for the growth of the companies.  This is the time where preference shareholders get paid first before the ordinary shareholders.

Some companies on the exchange are planning for their Annual General Meetings (AGM) and hoping to pay dividend for the financial year. Let’s take a closer look at what directors of those companies have decided to pay.

Companies	Dividend per share(GH cedis)	Payment Date
Standard Chartered Bank (SCB)	3.05	May 31, 2012
Ecobank Ghana (EBG)	0.24	May 18, 2012
Benso Oil Palm Plantation (BOPP)	0.0690	June 29, 2012
SG-SSB	0.04	April 30, 2012
HFC Bank (HFC)	0.022	May 14, 2012
Trust Bank Limited (The Gambia) (TBL)	20 butus	April 12, 2012
PBC Ltd (PBC)	0.0173	April 30, 2012
SCB-PREF	0.0324	March 30, 2012

For most of these stocks, the qualifying dates for their dividend payment are in March and April 2012. This simply means every potential investor who wants to enjoy the above dividend payments must buy the shares of those companies and be registered in their books before March or April. SCB, EBG and HFC for instance, have their qualifying dates on April 20^th, 19^th and 18^th, 2012 respectively, therefore investors must note these else would have to wait for another financial year to enjoy dividend payments.

AGMs

Ecobank Ghana ltd, HFC Bank Gh ltd and Ayton Drugs Manufacturing Company ltd planned to go for their Annual General meetings on April 27^th, 26^th and 5^th respectively. SG-SSB limited to have theirs on March 30^th whiles Benso Oil Palm Plantation Ltd planned for May 3rd, 2012.

Shareholders must do well to attend these meetings in order to get a better knowledge of the company and its plans for the future.

Keep investing, especially in the Ghanaian financial market.

2011 Year Review Chart of Ecobank Ghana Ltd (EBG) on Ghana Stock Exchange

Ecobank Ghana Ltd (EBG) on GSE. - 2011 Review.

Comparing EBG stock & the GSE Composite Index

Courtesy: Bloomberg

2011 Year Review of CAL Bank on the Ghana Stock Exchange.

Overview of Company

 CAL Bank Limited formerly Continental Acceptances Limited and then CAL Merchant Bank was incorporated on March 20, 1989 but the bank was licensed in June 1990 and commenced business in July 1990. With issued shares of 238,802,978, CAL Bank is listed on the Ghana Stock Exchange (GSE) and the share price is 0.23p as at December 6, 2011. We would be looking at how this bank performed on the GSE for the 2011 financial year.
As at 31st December, 2010, the Social Security and National Insurance Trust (SSNIT) held 82,363,074 shares in the bank making 34.13% whiles Mr. Afare Donkor, the largest individual shareholder and second largest shareholder held a stake of 7.51% representing 18,120,000 shares.



Analysis

CAL Bank began the year, 2011 with a share price of 0.33p (04/JAN/2011) and because of investor activities & active trades, share price of the bank rose to 0.39p (04/FEB/2011). Meanwhile, the stock price dropped steadily after that time to close at 0.26p on 22/March/ 2011. Further fluctuation of price was recorded from July to October 2011. Ten months down the year, CAL recorded a Year high of 0.39 pesewas and Year-Low of  0.25 pesewas (p). The volume of trade heightened at the end of October and hence was reflected by an increased in share price by some pesewas.
CAL stock and other financial stocks performed badly in November making the Financial Stock Index remain lower than the Base index of 1000.

The Year 2011 obviously was not the best year for most stocks on the GSE and CAL Bank is no exception.

I would be writing on Ecobank Ghana Limited (EBG) in my next post. I would be reviewing EBG stock on the Ghana Stock Exchange for the Year 2011.

[Courtesy: Ghana Stock Exchange, Bloomberg]

11/11/11 on the Ghana Stock Exchange.

The number 11 is perceived by many people as 'A LUCKY NUMBER'. In Astronomy, Apollo 11 was the first manned spacecraft to land on the Moon and  in religion, the Eleven apostles of Jesus (i. e. Judas excluded) were perceived to be the blessed and righteous ones. On this special day, 11th Nov., 2011, let us take a look at what happened on the Ghana Stock Exchange to see whether the fortune of the day had an effect on trading.

A volume of 130,810 shares were traded today, which was barely half of what was traded yesterday and the GSE Composite Index (CI) dropped by -0.86 points to close at 997.42. 

Meanwhile, the GSE Financial Stock Index gained 2.72 points to close at 900.31. 

GSE-CI is lower than the base index of 1000 that was valued on December 31, 2010.

Six (6) stocks recorded changes in price today. 

TOTAL traded 180 shares and lost 0.01p to close at GHC 21.00.

Tullow Oil (TLW) also traded 161 shares and lost 0.08p to close at GHC 31.00.  

Two banking stocks, Standard Chartered Bank (SCB) and Ecobank Ghana (EBG)

closed at GHC 45.50 and GHC 3.45  by losing 0.02p and 0.05p after trading 100 and

14515 shares respectively. SIC Insurance and Benso Oil Palm Plantation (BOPP)

also gained 0.01p each to close at 0.41p and 0.86p respectively.

Today's trading only favoured some financial stocks but not the Composite index. 

Shareholding of The Trust Bank (TTB) as Ecobank tries a Takeover

The Trust Bank (TTB), with about 20 networked branches covering Ghana,  is undergoing a takeover by Ecobank which most people including the Coalition for the Protection of Individual and Constitutional Rights are against. Meanwhile, shareholders of TTB, are strongly in favour of the takeover by Ecobank, the leading Pan- African Bank. Who then owns TTB?

The shareholding structure of TTB reveals that, The Social Security and National Insurance Trust (SSNIT), the single largest pension fund in Ghana is the largest shareholder with about 61.11% stake. SSNIT, with reference to the recent pressure from pensioners supports the takeover. 
The second largest shareholder is Compagnie Africaine de Financement et de Participation (COFIPA), a Paris-based investment company owned by West African businessmen. COFIPA has also agreed to the takeover by Ecobank. 

 The Trust Bank which remains one of the fastest growing banks in Ghana gained so much trust from Ghanaians and that reflected in the Total Bank Deposits rising from about 39.17million GH cedis in 2003 to about 239.55 million GH cedis in 2010.


The 3rd largest shareholder of TTB is FMO – The Netherlands development finance company,which has about 10.00% stake. FMO, like other shareholders have voted in favour of the takeover by Ecobank.
The Ghana Reinsurance Organisation remains the second major local shareholders of The Trust Bank. It has about 9.39% stake in TTB making it the 4th largest shareholder. With a stand just like SSNIT, Ghana Reinsurance Org. supports the takeover despite the rumour that the Minister of Finance, Dr Kwabena Duffuor, has blocked the takeover.


Africa Tiger Mutual fund, an investment company registered in Ghana, is the smallest shareholder of TTB. And with 6.00% stake, it stands to be the 5th and the 3rd local shareholder of TTB.


Only time can tell whether the sale of TTB to Ecobank Transnational Incorporated (ETI) would be successful. 

History of Initial Public Offers (IPO) in the Ghanaian Capital Market.

Initial Public Offering which is popularly known as IPO comes about when companies issue new shares to the public to purchase as a source of raising capital. Ghana has a wonderful history of IPOs and since the inception of the Ghana Stock Exchange (GSE), there have been so many IPOs with an impressive performance in the market. Meanwhile others were just so bad and despite their impressive subscriptions, they traded badly on exchange.

On 12^th November, 1990, Accra Brewery Limited (ABL) made a provisional listing on the Ghana Stock Exchange, making it one of the earliest companies to be listed on the Ghana Stock Exchange. This company and others existed before the inceptions of the GSE Public Limited Liability Companies hence were initially given provisional listing status before the formal listing. ABL made its formal listing on 20^th December, 1991 (Source; GSE Research Dept.).

One IPO listing was by SPPC and this was from December to February 1992. Eight (8) million shares were offered but only 4.2 million shares were sold to raise an amount of 630 million old cedis (GHC 63,000). Mechanical LLoyd Company Ltd (MLC) also offered 11 million shares as IPO at 50 old cedis (0.05 pesewas) per share from December 1993 to February 1994 and only 9.36 million shares were sold which raised an amount of 468.16 million old cedis (GHC46,816). Looking at these historical trends, it is obvious that early IPOs were cheap but subscriptions were not impressive. In January 1995, HFC Bank stocks were oversubscribed when they made a placement.  Shares offered were 11.35 million at 100 old cedis (0.10 pesewas) and 13.10 million shares were sold to raise about 1,315.45 million old cedis (GHC 131,545). Most of the time, shares of this nature were patronized by foreigners because the investment community of Ghana was small by then. Aside the HFC placement, SSB (now known as SG-SSB) IPO in 1995 was also oversubscribed. Many companies like ALW, UTC, PZ, EIC, FML made primary issues which were not necessarily IPOs. In 2006, Ghana Commercial Bank (GCB) issued and IPO of 49.50 million shares but 68.44 million shares were subscribed. This oversubscription set the pace for most IPOs and the investment community of Ghana especially the youth, took advantage of them. Initial Public Offers of Camelot (CMLT), Produce Buying Company (PBC), Sam Wood Ltd (SWL), Cocoa Producing Company (CPC) followed and in 2004 alone, four (4) Companies (CLYD, BOPP, CAL & SPL) listed IPOs on the GSE. But how well do the trade on the Exchange?

About two year ago, Ecobank Transnational Incorporated (ETI) offered an IPO that was largely subscribed meanwhile these shares are facing liquidity problems as at now in the market. Share price of ETI has fallen below its IPO price and shareholders are not happy at all.  UT Bank entered the market with an IPO which was also oversubscribed but the question still remains, do IPOs perform well in the market. Shares of UT bank had so many problems when it started trading in the market but is currently bouncing back.

The most recent IPO issued in the market is the shares of Tullow Oil, just weeks ago and these were undersubscribed. Does it mean that the investment community is no longer having confidence in IPOs or it was due to the costly price of this particular offer? As an investor, you must find out because this can inform your investment decision.

Value Investing and its rewards on the Ghana Stock Exchange.

There are different kinds of stocks or shares of companies on the Ghana Stock Exchange and every investor has a purpose for investing with reference to individual risk preference and time horizon. An investor’s purpose for investing could be for growth or for income or value. Value investing is investing in stocks believed to be worth far more than their current prices rather than those that pay high dividends or seem likely to appreciate irrespective of underlying value. 

On the stock market, there are some stocks that are mispriced. Mispricing is calculated as the difference between the estimated intrinsic value and the market price of a stock. Intrinsic value of an asset, in this case stock, is the value of the asset given a hypothetically complete understanding of the asset’s investment characteristics.  Therefore when a stock is undervalued on the exchange, there is an investment opportunity and smart investors take advantage of that.

The Question then is, how do you know whether a stock is undervalued or not? This is where you need an expert to advice you. Knowing this involves a lot of factors and calculations. One must first valuate the stock using some figures on the financial statement of the company. Some industry experts say that, UT bank is currently undervalued on the stock market. They make their argument with respect to the potentials of the company and how low it is currently priced on the Stock market (0.33p, courtesy: GSE). One thing you should know is that, so many investors do these calculations and that informs their investments strategy. An advice to you is that, for an active strategy to be consistent and successful, the investor’s expectations must differ from consensus expectations and be, on average, correct as well.