TV3’s IPO waits

The brokerage wing of First Atlantic Merchant Bank Limited (FAMBL), Lead Manager for the anticipated TV3 Initial Public Offer (IPO) have said that the holdup in the share floatation for the renowned media company has been necessitated by current challenges on the local equities market.
Explaining what has informed his outfit’s decision to delay the offer even though some other companies have risked entry into the primary market in the heat of the global recession, Kofi Osafo Sampong, Manager of FAMBL Brokerage Services said the strength of institutional demand for the shares on the market is currently very low, for which reason the rate of success for initial offers is minimal.
“It is the institutional investors that move the market, and their absence from the market has partly been responsible for the slump. Traded volumes have also reduced to as low as an average 50,000 shares per day”, Mr Sampong remarked.
He noted that the change in political administration has been responsible for the inactivity of most local institutional investors, most important of which are government and quasi-government institutions such as SSNIT.
“Most of these large government entities that contributed much to activity on the equities market are now not taking investment decisions as they await new corporate directions from newly appointed board of directors”.
He also underscored the effects of the global recession on the local equities market, saying that foreign investors are clearly not buying more, with many struggling to offload their stakes in our markets.
To him, the experience of the recent ETI offer subscription and IPO, and the UT Financial Services floatation are clear signals that investors are apprehensive.
ETI’s offer which was described as the largest transnational offer in the sub-region achieved minimal success, whilst the UT offer pulled a surprise with the significant involvement of retail investors, even though foreign involvement was virtually absent. But the aftermarket price performance of UT has been worse than the former.
Unwilling to make a prediction as to when the bearish performance will be reversed, Mr Sampong stated that the crisis if far from over on both the local and international markets.
Asked when investors should expect the floatation of TV3 shares, Mr Sampong indicated that investors should be on the look out, and that as soon as market conditions become ripe, the IPO will commence.
The Securities and Exchange Commission approved the prospectus of the media giant before the close of 2008. TV3 is seeking additional financing to enable it upgrade its equipment and to assist in its quest to expand coverage to all parts of the country.
Lambert Y. Keriba, a Research Analyst at FAMBL Brokerage noted that the erroneous notion that money market investments do well under the current political administration has caused many to favour investments in that direction, which has also contributed to the woes of our markets.
Mr Keriba further noted that the slide in the cedi value to the major trading counterparts has also indirectly eroded the investment value of equities, making it unattractive to foreign investors.
He called on government to work harder to improve the macroeconomic conditions, saying that government’s action could send the right signal to investors based on which they would act.
TV3 Network Limited is a private, free-to-air television broadcaster in Ghana which is owned by Malaysian media giant Media Prima. Launched in 1997, TV3 Ghana airs and produces a variety of television programmes including acclaimed news bulletins, dramas and successful reality television and entertainment shows that has endeared the media house to several Ghanaians.
Media Prima claims that TV3 is the most watched free-to-air television station in the country.
TV3 Network Limited is the first Media Prima's broadcasting station outside Malaysia. TV3 is arguably Ghana’s foremost private free-to-air (FTA) television network. This channel is the most watched and preferred free-to-air channel in TV3's core coverage areas among television households as per the last GAMPS report.
Prima initially scheduled to list TV3 Network Ltd on the Ghana Stock Exchange before the close of 2008, but market conditions would not allow.
By (By Charles K. Amoah) July,2009