Foreign Fund managers makes substantial investments in Trasnols

Story: Boahene Asamoah
THREE international fund managers have made substantial investments in Transaction Solutions Ghana Limited (Transol) in its recent initial public offer with a total equity of about 40 per cent.
They are Mango Capital, based in South Africa, with offices in The Netherlands, which bought 4.6 million shares, representing a 20 per cent stake, Frontier Market Funds, based in Santiago, California in the US, which has 2.5 million shares, representing 11.06 per cent, and STD Bank Noms/Securities Africa Limited, which also bought 828,000 shares, representing a 6.65 per cent equity in Transol.
A stock market analyst, Mr Iddrisu Mahama of EDC Stock Brokers Limited, in an interview, said the implications were that international fund managers were gradually shifting focus to emerging capital markets such as the Ghana Stock Exchange to diversify their investment portfolios.
Again, he said, the country’s capital market was gaining international recognition and attention, adding that “it also shows the confidence that the Ghana bourse is gaining internationally”.
He said the development was very significant, in the sense that it marked the first time that a local firm had seen such an appreciable equity investment, adding that it also showed that fund managers understood the business strategies of Transol.
“The investment of the three fund managers represents the confidence foreign fund managers have in the fundamentals of the company,” Mr Mahama said.
He noted that macro-economic stability in the country was also a factor in attracting foreign fund managers and explained that the stability of the currency against major international trading currencies had boosted investors’ confidence on the market.
Transol is an information technology company which was formally listed on the Ghana Stock Exchange during the last trading session of last year after offering 20 per cent of the company to the public through a public floatation.
A total of 22,662,442 shares, valued at ¢1,000 per share, were listed on the Ghana bourse. The listing of the shares followed a successful initial public offer which was over-subscribed by over 12 per cent.
Transol offers transaction switching and processing systems, electronic funds transfer support services, electronic bill payment services, prepaid utility and telecommunications services, information technology consulting services, as well as customer payment services.
It operates the EZI shops which are points of sale centres for Areeba recharge vouchers and those of the other mobile phone networks. The shops could also be used for Ecobank Visa Gift card and the payment of Multichoice bills.
Transol was the first company to install stand-alone Automated Teller Machines (ATMs) in the country using the Ecobank platform and it has currently installed 16 ATMs at strategic locations.
The company is also in the process of installing 25 additional ATMs throughout the country.
The Chairman of Transol, Mr Paul Jacquaye, said the interest showed in his company by foreign fund managers was an indication of the fact that the fund managers understood its business strategy.
“We are operating in high growth areas such as the banks and information and communications technology,” he said in an interview.
The Ghana Stock Exchange was, for the year 2003, adjudged the best stock market performer among 61 stock markets in the world, with a yield of 144 per cent in dollar terms.
The Ghana bourse had, in 2002, recorded an earlier feat with compound index of 256 per cent in dollar terms. However, the index plummeted thereafter and is still recovering from the bearish sentiments experienced in 2005.
The market, which started in 1996 with a capital of $2 million, today has a market capitalisation in excess of $12 million.