GRi Business News 25-02-99

Huge losses made by two major equities, Mobil Ghana Limited (MOGL) and SSB Bank (SSB), on Wednesday plunged the total shares traded on the Ghana Stock Exchange (GSE) by more than half, compared to shares traded on Monday.

Thus, total shares traded closed at a mere 183,000, down from 1,062,700 traded on Monday, bringing the All-Share Index down by 12.75 points to end at 862.03 from the previous 874.78.

Total shares offered were 3,022,970 as against Monday's 2,361,250 but bids finished lower at 1,282,600, compared with the previous 1,441,600.

Market capitalisation also finished at 3,327.01 billion down from the 3,347.03 billion.

On the broader market, there were five gainers and four losers.

Ghana Breweries Limited (GBL) made 150 cedis gain to close at 1,850 while Enterprise Insurance Company (EIC) and Unilever Limited gained 10 and nine cedis to finish at 2,010 and 1,730 cedis respectively.

Metalloplastica Company made five cedis to finish at 250 cedis, with CFAO also making a cedi to close at 56 cedis.

MOGL and SSB lost 400 and 200 cedis to finish at 17,500 cedis and 2,000 cedis respectively while Ghana Commercial Bank (GCB) also lost 50 cedis to finish trading at 1,050 cedis. Super Paper Products Limited lost a cedi to close at 244 cedis.

The following are the last prices of listed equities:

ABL 800

AGC 18,700

ALW 2,600

CFAO 56 +1

EIC 2,010 +10

FML 1,450

GBL 1,850 +150

GCB 1,050 -50

GGL 1,100

HFC 750

MGL 225

MLC 250 +5

MOGL 17,500 -400

PAF 400

PTC 405

PZ 850

SCB 24,000

SPPC 244 -1

SSB 2,000 -200

UNIL 1,730 +9

UTC-E 125

Tema (Greater Accra) 25 Feb.  

Kingdom Transport Services (KTS), currently Ghana's biggest private transport company, is to double the size of its fleet by the end of next year with an investment of 7.7 million dollars.

KTS, the local agent for the American Bluebird buses, which currently has a fleet of 94 buses, has ordered more buses to provide transport services for workers in Kumasi and Takoradi and for school children in Accra. Mr Felix K. Semavor, chief executive of KTS, said funds for the expansion programme is being arranged through United Kingdom and American banks. He said KTS is also introducing a finance scheme whereby Bluebird buses, which he described as the number one bus service for schools in the world, will be supplied to schools and the payment spread over two years. The first school to benefit from the scheme is Wesley Girls' High school, Cape Coast.

KTS clocked a turnover of over nine billion cedis last year and its expansion programme which will create about 400 jobs, has been approved by its board of directors. In another development, KTS drivers, who went on strike last month in protest against poor conditions of service, have been offered salary increases ranging from 25 to 43 per cent and allowed to form a trade union.

Accra, (Greater Accra) 25 Feb.  

Ashanti Goldfields Company (AGC) Limited, Ghana's premiere gold mining company, on Thursday said Ghana has fallen behind in terms of tax relief for mining companies.

Mr Mark Keatley, Chief Financial Officer of AGC, in an overview of the 1998 operations of AGC Group in Accra, said it now costs Ashanti less to produce gold per ounce in Tanzania, Guinea and Zimbabwe than in Ghana. Mr Keatley said in 1996, Ghana had a very favourable mining code tax. With time, however, other countries have established better tax systems that make gold production more cost effective.

"Ashanti will thus look all over Africa for low cost production mines and other minerals along the line but gold will still remain our main focus. "The largest chunk will go to Geita in Tanzania, Obuasi in Ghana and Siguiri in Guinea. "Tanzania has the most unrivalled tax system in place in the world today".

He said Ashanti's main focus this year and beyond is to beat down cost to the barest minimum and will be going out to places and countries where cost of production is lowest. "Ghana must maintain a more friendly tax relationship for manufacturing firms, especially in the mining industry".

Mr Keatley said the power crisis that hit the nation in 1998 was costly to the Group. "It cost Obuasi 25,000 Ounces, Iduapriem 10,000 ounces and Bibiani 15,000 ounces. This resulted in a loss of revenue of 15 million dollars because the mine could not operate at installed capacity".

The increase in the cost of power is also having an adverse effect on the company. This has caused a loss in revenue of about 14 per cent.

Mr Keatley said Ashanti is now paying 7.2 dollars per kilowatt hour while that for North America, is 1.3 dollars and that of South Africa, 3.5 dollars.

He said the company is having constructive discussions with the Volta River Authority and the Public Utilities Regulatory Commission (PURC) in order to help reduce the costs being incurred now.

Ashanti is taking a further initiative to assist Ghana to diversify its sources of power through KMR Power Systems. The power generating company will be providing a 220- Megawatt power station, which will initially use crude oil and shift to gas from the West African Gas Pipeline Project. Ashanti is expected to use between 80 and 90 per cent of power from the KMR plant which will be sited at Tema.

He said the Iduapriem, Ayanfuri and the surface mines in Obuasi will be closed down in the next two years.

Mr Keatley said the company has decided to bring the cost of underground gold production to below 200 dollars an ounce. Ashanti would pay appropriate benefits and bear social responsibilities of staff who will be relocated at the underground mines at Obuasi.

Accra, (Greater Accra) 25 Feb. 

About 770 companies and individuals have submitted their Value Added Tax (VAT) returns for January to the various VAT offices in Accra.

The number is expected to go up by more than four times at the close of work on Friday, the deadline.

This is the first submission of returns since VAT was reintroduced on December 30, last year.

Nii Ayi Aryeetey, Head of the Adabraka office, said on Thursday that as at February 23, about 70 returns with payments had been received while Mr Gyimah Asante of the North Kaneshie office, said they received about 700 returns.

Officials at the VAT Secretariat said the figure is expected to reach 2,400 by the close of Friday.

A number of company representatives and individuals are rushing to be at the deadline to avoid paying any penalty.

Registered companies which default submission of their returns by Friday would pay one million cedis penalty. They will pay additional 5,000 cedis for each day that they fail to submit the returns after the deadline.

As early as 0700 hours, this morning about 30 people were in a queue at the Adabraka office to file the returns.

The officials described the turn out as impressive and encouraging.

Partners and staff of KPMG, a leading global professional advisory firm, on Wednesday donated 10 million cedis to the University of Ghana Jubilee Hall fund.

The amount will be used for two purposes - 7.5 million cedis which was presented at the ceremony in Accra, is for the jubilee fund and 2.7 million cedis, is to fund a prize for the best overall students in the Bachelors of Science, accounting in Administration, finance and computer applications in management.

Mr Albert Neequaye Kotey, senior partner of KPMG, said the firm would manage the fund for three years after which it shall be handed over to the School of Administration.

The annual award will be 500,000 cedis.

He said KPMG, who are also chartered accountants and business advisers, have been fulfilling their commitment to quality education in Ghana and does not restrict itself to the area of business and finance.

"Indeed for several years, we have been assisting medical students of the University of Ghana Medical School in pursuing their electives abroad through cash contributions to individuals. Donations last year alone amounted to 5.5 million cedis".

Prof. Ivan Addae-Mensah, the vice-chancellor, thanked KPMG for its commitment to education at the highest level, saying that is the only way the standard of education can be raised.

He said accommodation has been the university's major problem. To alleviate the situation, the Alumni of the university decided to raise funds for the construction of the hall of residence.