This is the believe of some investment brokers, including Executive Director of CDH asset management, Seth Aryitey.
Although it is deemed as an innovative move by the Ghana Stock Exchange, the Alternative Market may well become a white elephant if the fate of Small and Medium Scale Enterprises in the country do not improve.
It is believed that the alternative stock exchange, which has been established for SMEs and requires relatively less amount of capital to enlist, compared to the GSE Index itself, is struggling because of the current slump in growth for SMEs.
However, other analysts say the management systems of the Ghana Stock Exchange used in running the Alternative market must be effective enough in order to attract more SMEs to subscribe.
To qualify to list on the GAX, a company is expected to as have a minimum stated capital of GH¢250,000 at the time of listing.
Samba Foods was the first to list on the GAX after realizing its target of GH¢2.5 million by offering over 3 million ordinary shares to the investing public.
“We lack so much capacity especially when it comes to management and leadership. It is something that we have all been talking about. If we are able to work on that so that we get efficient management and leadership in place, we would be able to improve the system. I can tell you that the prospects are bright”, the CEO of CDH Asset Management told CITI FM.
The GAX accommodates companies at various stages of their development, including start-ups and existing enterprises, both small and medium. Some of the benefits to businesses that subscribe unto the platform are; easier access to long term capital; access to long term capital at a relatively lower cost; improvement in the financial position of the GAX Company.