What ‘time’ is it for companies listed on the GSE?
For everything there is an appointed time, even a time for every affair under the heavens: a time for birth and a time to die; a time to weep and a time to laugh; a time to keep quiet and a time to speak…”
This is what the Good book says in Ecclesiastes. Since there is a time to keep quiet but there is also a time to speak, then as an investor I can ask: what time is it now for companies listed on the Ghana Stock Exchange? Is it time to tell us what they have been doing or time to rather keep quiet because they have already told us enough?
Silence is not entirely bad on its own, hence it is said that there are times when silence has the loudest voice; but Jean-Jacques Rousseautells us that “absolute silence leads to sadness. It is the image of death”.
Clearly, silence can have a detrimental effect in most cases of which public companies listed on the Stock Exchange could also be susceptible to its effect. There are thousands of investors who are interested in the operations as well as developments, challenges and prospects of their companies.
Indeed, they need updates as much as they would on what puts food on their table. And I believe that they have a fundamental right to information on their investment, and that absence of information breeds speculation -- and speculation is a double-edged sword.
Listed companies are publicly owned, and they are subject to detailed disclosure laws about their financial condition, operating results, and other important areas of their business. Market regulations strictly adhere to the tenets of full disclosure and request listed companies to make market-sensitive information available timely to all investors.
As a result, listed companies are obliged to release their annual reports, semi-annual results and quarterly results to their shareholders and the public at large. Commendably, listed companies comply holistically with this requirement. However, it is in the interest of ;listed companies not to limit their provision of information to only compliance with statutory requirements doing more than that becomes an advantage rather than a pain to bear.
It is quite rare for listed companies in Ghana to organise an open-day for stockbrokers and the media to present a platform for dissemination of information on the fantastic operational achievements and the prospects for the company to increase shareholders’ worth.
Credits to the management of Benso Oil Palm Plantation (BOPP) which has organised this twice, although the last one was about four years ago.
Consequently, the Ghana Stock Exchange in its wisdom has instituted a programme dubbed ‘Facts Behind the Figures’, which is a fine platform for listed companies to have a media exposé for interaction. As part of that programme, companies tell their own story by outlining what they have been doing behind closed doors to generate the figures they present to investors.
The management team of the company being represented presents their company’s key achievements and prospects to the stockbrokers, investment analysts, fund managers, shareholders, regulators and other members of the investment clique. As Victor Hugo puts it “music expresses that which cannot be put into words and that which cannot remain silent”.
Indeed, this forum serves more like a marketing strategy for companies that have been appearing on it. The ‘free’ media publicity alone is enough to project the companies’ image for the next couple of days as they are in all the financial reports of all the media houses in the country. Just imagine the cost of media advertisement for only two days and you can draw your own conclusion.
But the question is how many out of the thirty-four listed companies have taken advantage of this programme? And how can people know what you are doing under the cover of darkness when you decide to remain silent?
Observations have shown that there was increased demand for the shares of most of the companies that appeared on this programme. This resulted in a surge of their share prices. Clearly, the investing public gets excited if good news is shared with them and they express their excitement through increase in demand for shares of the company that presents the information.
At this time of the stock market when there is no excitement amidst investor apathy, listed companies must start telling their own stories. Perhaps, as it is said, ‘if you do not blow your own trumpet nobody will do it for you’.
Investors need to know the success stories of the companies and what they plan to do in the coming days.
This way, investors will decide where to invest their money. We need to remember that supply and demand in stock markets is driven by various factors that, as in all free markets, affect the price of stocks -- and information is a key factor to which there is no alternative.
Actually, the stock market can be intimidating; but timely information helps ease investors’ fears. “Laughter”, they say, “is the sun that drives winter from the human face”. Apart from the full-year 2011 reports that companies are preparing to release followed by annual general meetings which are statutory, this is the time to tell their success stories -- and this might cause an appetite for the shares of those companies.
Come out and interact with the market at the ‘Facts behind the Figures’. As Ecclesiastes concludes in the verse quoted in the opening paragraph of this piece, “…what advantage is there for the doer in what he is working hard at” if nobody knows what he is doing?