A monthly analysis of activities in the economy and on the Ghana Stock Exchange (GSE) in particular showed that the market is still in its descent after opening the year on a low key.
It showed that impressive quarterly results released by a number of listed firms failed to give the market a lift during the month of August.
It found that the search for discount deals and a desire by some investors to cut losses helped put the shares of a number of stocks under pressure.
Activity on the market thus remained subdued within the month under review. The trends were not helped by the prevailing attractive rates on money market instruments, according to the report.
It showed that seven equities registered gains in August compared to six in July.
The market indices, however, headed southwards with declines in 16 equities offsetting the gainers.
With the foregoing events impacting negatively on risk taking, volume and turnover failed to match those of the previous month.
As a result, the benchmark GSE Composite Index (GSECI) trimmed 53.56 points during the month under review.
This compared to the 153.90 points it shaved in July. The GSECI thus closed the month at 2,154.77 points, with its year-to-date return sliding to negative 4.70 per cent from negative 2.77 per cent at the end of July.
Although the GCI’s return in August was unimpressive, it was better than the 100.17 points lost in August 2014. The market’s return at the end of the same period a year ago stood at 2.56 per cent.
The GSE Financial Stocks Index (FSI), which tracks banking and insurance stocks, was also under pressure and thus shed 101.24 points (154.58 points in July 2015) to close at 2,138.86 points.
The return on the FSI at the end of August stood at negative 4.7 per cent, down from 0.20 per cent at the end of July.
The FSI’s performance last month compares to the 15.46 points lost during August 2014.
Economy in August
Economic activity on the domestic front continued on a low key with the ensuing energy crisis, falling local currency, rising cost of fuel and utilities impacting on economic activities.
These aside, global developments, especially the devaluation of China’s yuan and its ripple effects, falling commodity prices, reduced growth expectations, unpredictable financial markets and investor concerns about the Fed’s rate move impacted on domestic events.
Key economic indicators posted contrasting fortunes; the cedi continued to lose ground as strong economic indicators from advanced economies, reduced domestic expectations, speculation and lower earnings weighed.
Inflation eased from 17.9 per cent in July to 17.3 per cent in August as stable domestic inflation helped outweigh higher import inflation.
With cost of doing business already high, the ongoing fiscal consolidation and tight monetary policy has also not helped businesses and consumers.
As expected, figures from the Bank of Ghana’s (BoG) Composite Index of Economic Activity (CIEA) showed a slower pace of growth during the second quarter of 2015 compared to the same period last year.
Source: Graphic