The Ghana Stock Exchange (GSE) is exhibiting signs of expansion, as its Financial Stocks Index (GSE-FSI) experienced a modest upswing.
Buoyed by better-than-expected results from both listed and non-listed banks, the GSE-FSI recorded a gain of 1.53 percent over the last four weeks, followed by a 1.79 percent gain in the past week – reaching a value of 1,715.17 points. While the index still registers a year-to-date loss of 16.44 percent, market observers remain optimistic about the future trajectory of financial stocks.
Analysts view this gradual upswing in the GSE Financial Stocks Index as an indication of the market’s resilience and its improved efficiency in responding to positive news. The recent gains suggest that investors are becoming more adept at processing available information, resulting in a positive signal for both domestic and international investors.
Simultaneously, the benchmark GSE Composite Index (GSE-CI) also witnessed a slight upturn, closing at 2,969.69 with a 0.41 (0.01 percent) point increase. At end of third trading week in July, the market cap had moved to GH¢71.6billion
The GSE-CI showed a 1-week gain of 2.51 percent and a 4-week gain of 4.49 percent, reflecting sustained positive momentum in the market. Impressively, the overall year-to-date gain for the GSE-CI stands at 21.5 percent; underscoring the domestic stock market’s overall strength.
During the past week, several companies experienced gains in their stock prices. Guinness Ghana Breweries saw an increase of 9.91 percent to reach GH¢2.55; Société Générale rose by 8.96 percent to GH¢0.73; Cal Bank advanced by 6.64 percent to GH¢0.64; MTN Ghana climbed 5.15 percent to GH¢1.43; and TotalEnergies gained 1.49 percent to GH¢6.80. However, New Gold was the only company that faced a decline – dropping by 1.04 percent to GH¢218.90.
Throughout the week, a total of GH¢8.4million was exchanged in 4.9 million shares across 23 counters. Notably, MTN Ghana dominated the market activity; accounting for 65 percent of the volume traded and 51 percent of the weekly turnover.
CAL Bank recorded the highest volume of shares traded with 3,756 shares changing hands, followed by TotalEnergies Marketing Ghana (2,859), Republic Bank Ghana (2,001) and Ecobank Transnational (1,785).
This progress builds upon the GSE’s turnaround since March this year. Looking back, the first-half of the year witnessed a turbulent start for the GSE. However, it closed on a strong note with a record market capitalisation of GH¢70.24billion. The GSE Composite Index (GSE-CI) achieved its second-highest monthly return to date in June 2023, showcasing a 10.3 percent increase compared to the first half of 2022. This surge in market capitalisation can be attributed to improved investor confidence, driven by the performance of listed stocks and dividend payment announcements.
Despite the market’s overall positive performance, trading activity experienced a notable decrease in volume and value – possibly influenced by market fluctuations and investor caution as some opted for profit-taking. The GSE’s return in US dollar terms was also affected by the cedi’s circa 20 percent depreciation against the US dollar, resulting in a -10.1 percent return.
GSE’s Managing Director, Abena Amoah, expressed excitement about the market cap crossing GH¢70billion for the first time – indicating investors’ interest in diversification and the appeal of equities.
As the economy continues to attract interest from global investors, the country’s stock market is expected to play a crucial role in facilitating capital inflows and fostering economic growth in the region. With the market maturing and showing resilience, analysts hold the view that the future outlook remains optimistic for the Ghana Stock Exchange.