Testing the Market with iBroker Trading Platform

I'm back to using iBroker trading platform to trade my stocks on Ghana Stock Exchange. This only means, I am saying Goodbye to Databank Brokerages. #Boysabr3.
Now I'll put my own stop loss orders, Set my limits, trade more faster, move more funds into my brokerage account faster online than going to my brokers' office to deposit the money in my account as I used to do with my former brokers, Databank.
In order to be able to move funds into my new brokerage account with CAL Brokers faster, I want to open a CAL bank account in which I will transfer funds to from my Zenith Bank Account on monthly basis. I believe with the iBroker platform, I can easily transfer money online from my savings account at CAL Bank to the brokerage account. Another good but slower way is to move money straight from my Zenith Bank Account to my CAL brokerage account. I still don't understand why it should take a day or two for that transfer to go through. Incredible Ghana. #GhanaAbr3.

Some of today's Trades on the GSE
Courtesy:  iBroker platform

Which brokerage firm is the best? What fees do they charge? What do they offer? #AskPEAGAMA

Photo credit: Databank

Below are my responses to an investor's questions about brokerage firms in Ghana. 

"Dear Edem,

My name is James Kofi Bond, a Ghanaian currently living in the US. I came across your blog a couple of days ago and have been reading your articles.

I am writing to you because I have been thinking of investing in some equities on the Ghana Stock Exchange (GSE) and was wondering if you could recommend some brokerage firms back home that cater for an investor resident abroad. In addition, would you be kind enough to share your experiences/reviews using some of the brokerages in Ghana. Are you satisfied with services you receive or have received have you had any major issues? Were there any surprises once you started using their services, or did everything go smoothly as you expected?

Below are guidelines I would like to consider before I make any commitment and I would appreciate it if you could offer your thoughts on each of the guidelines. Feel free to add to the list if I miss anything.

1. What is the name of the firms that you would recommend? Are they full-service brokers or discount brokers?

Ans: I would recommend Databank Brokerage, CAL Brokers and Ecobank Capital simply because I have experience with them and likes what I get from them. And Yes, I they are full-service brokers. 

2. What documents are required to open an account? Should the documents be notarized?

Market Participants: List of Stock Brokerage Firms in Ghana

Most people have been asking me about who to contact if they want to start an investment. I have realized that most people in Ghana do not know who to contact or where to go in order to buy shares of companies listed on the Ghana Stock Exchange. I must admit that, some brokers in Ghana do not approach people to talk to them about investments or contact potential investors.
Moreover, people are very ignorant about the various investment instruments that exist in these brokerage firms. It is bad for the growth of the market.
So, I have decided to list the various broker/dealers in the Ghanaian financial market and their websites or locations. I believe this would help some potential or young investors to know where to go, or who to talk to.

As listed on the Ghana Stock Exchange's website, these are some market participants (Licensed Dealing Members );

CAL BROKERS LIMITED

CDH SECURITIES LTD

DATABANK BROKERAGE LIMITED

EDC STOCKBROKERS LIMITED

FIRST ATLANTIC BROKERS LTD

GOLD COAST SECURITIES LIMITED

HFC BROKERAGE SERVICES LTD

IC SECURITIES (GHANA) LIMITED

MERBAN STOCKBROKERS LIMITED

NEW WORLD RENAISSANCE SECURITIES

NTHC SECURITIES LIMITED

PRUDENTIAL SECURITIES LTD.

SDC BROKERAGE SERVICES LTD.

SIC-FINANCIAL SERVICES LTD.

STRATEGIC AFRICAN SECURITIES LTD.

WORLDWIDE SECURITIES LIMITED

AFRICAN ALLIANCE SECURITIES GHANA LIMITED

LIBERTY CAPITAL GHANA LIMITED 

FIRSTBANC BROKERAGE SERVICES LTD.

STANBIC INVESTMENT MANAGEMENT SERVICES LIMITED

Please follow the links above to find more about these Market participants or Brokerage firms. There are other market participants like Custodians, Registrars and Government Securities Dealers. The link to the Ghana Stock Exchange website would help you find out more.
Don't forget to come back to this blog. eStock Analysis Blog would always get you the information you need to be a better investor.
You can always ask questions or leave a comment, I'll gladly answer or help you find the answer.

Keep investing..

Taking a closer look at Unilever Ghana Limited (UNIL)

Today, I want us to focus on Unilever Ghana Limited (UNIL) and it's performance in 2011 and in the year so far. In my earlier post about the 1st Quarter of the Manufacturing sector, I wrote on the current standing of the company on the exchange. 

UNIL: 1st Quarter Chart on GSE: (courtesy; Bloomberg & GSE) 

We would look at more figures and how investors are reacting. UNIL as we know, manufactures and markets consumer goods throughout Ghana some of which includes toilet soaps, personal products, detergents, and consumable food products.

This year, UNIL began trading at GHS 6.64 (03.01.12) per share on the exchange. UNIL has issued about 62.50 million ordinary shares on the Ghana Stock Exchange (GSE) with market capitalization of GHS 509.38 million. As released by the exchange, UNIL records a dividend yield (%) of 5.89. It was also recorded a price per book value from the most recent quarter as reported by Bloomberg as 8.6373. 

Investors reaction to the stock on the exchange has not changed so much. The shares are trading from time to time and most of the time as odd lots. As at today, the price remains at it's year high of GHS 8.15.

UNIL reported in March 2012 that it has made a revenue of GHS 239,005 for the 2011 financial year. In a press release to the Ghana Stock Exchange, it reports a profit after tax for the year as GHS 30,115, an increased of the one for 2010 which was GHS 17,947. Shareholders equity increase from GHS 41,340 to GHS 48,893.(NB: all figures are expressed in thousands of GH cedis unless otherwise stated)

UNIL would be having its Annual General Meeting on 27th April 2012 at the National Theatre. Shareholders are advised to go and contribute to the discussions and also vote on issues. Moreover, the company has proposed a dividend per share of 0.4800 pesewas which has a qualifying date as 25th April, 2012.

We hope to keep our eyes on UNIL and it's affairs in the household & consumer products sector.

Relationship Managers & Receptionists are not Stock Brokers. Talk to the right person.

 I have been observing this for some time now and I think it is getting on my nerves and moreover, investors are losing money because of this issue. I have been a victim and it was due to my ignorance. Don't make the same mistake. Some thing must be done. The Securities and Exchange Commission must act now to protect investors.

To many people in the Ghanaian financial market, everyone that works in a brokerage firm or with a Licensed Dealing Member (LDM) is having a good knowledge about the market or is a stock broker (Authorized Dealing Member). This misinformed public perception is reinforced by some ordinary workers at some brokerage houses who give their misleading recommendations about stocks on the market to ignorant investors. They speak so fluently and courageous as if they are authorized to give investment advice whiles their job is just to help investors or clients fill forms, explain the various investment opportunities to the client or direct them to the licensed /authorized advisor.  

On several occasions, a Relationship manager of a reputable Brokerage house tried to advise me on my investments with the aim of convincing me to invest in the firm's investment product which was a mutual fund whiles I insisted on talking to a broker. She thought I was just an ordinary investor who knows little or nothing about what I’m doing. She told me the stock market is not a place I should invest in. I asked why? And all she was able to say is that she doesn't invest there so she won't advise anyone to.  This was so surprising to me because I make so much money from the stock market. Moreover, she and her colleagues don’t have any authority to confuse investors in the name of investment advisory. It’s pathetic that investors are misled by this kind of ignorant people who act as experts. This must stop now.

I experienced the same thing in another brokerage firm when a receptionist tried to mislead me just because there was no broker around at that time. I ended up lecturing her about the current affairs on the market and the last thing she asked was my business card.

The Securities and Exchange Commission did not license these firms as broker-dealers or investment advisors because of the bogus advices their receptionists and relationship managers give. Every stakeholder must note this and I would advise all investors to seek for good advice from authorized, qualified and recognized investment advisory firms or people. The fact that someone works in such firms doesn’t make the person qualified to give investment advices. Be cautious and insist on talking to the best before you make any investment decision. Meanwhile don’t forget to do your homework before you invest. Study very well what you are investing in and talk to the experts not ‘ignorant’ receptionist.

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.