GSE: Further dip in broader market returns capital, losses anticipated

The Ghana Stock Exchange floor
The Ghana Stock Exchange floor



Aluworks Ghana Limited [ALW] was the only gainer on the bourse in yesterday’s trade. Capital gains on ALW are solely driven by investors’ sentiments and market dynamics.

The aluminium processing firm which has recorded losses in their financials since 2014 has failed to add on to shareholders’ value due to the accruing interest on debt.

This has affected the company’s balance sheet position year on year. High cost of borrowings made in 2012 solely for the purpose of acquiring a new mill for their operations is the underlying factor for the year on year losses ALW keeps churning out.

GN Analysts however recommend a HOLD on the equity on the back of an on-going potentially viable deal between ALW and a foreign-based strategic investor which could turn around the fortunes of the company. The relatively low price of the equity could offer an opportunity for retail investors to enjoy periodic marginal capital gains on the bourse.

Market activity level dipped as at the end of trading session yesterday as rightly predicted by GN Analysts in an earlier report. Market volumes and values could inch up by mid week, block trades will dominate trade sessions this week.

The month of August witnessed only six equities making the gainers’ list on the bourse. The price slump on the stock market however could not prevent CAL, EGH, FML, GCB, SIC, SCB Pref from returning capital gains to investors. GCB, which experienced a price rally, added significant value to its share, returning 24.61% of value to investors. The losers list was a tall order of 15 equities [ALW, ARYTN, BOPP, EGL, ETI, GGBL, GOIL, GSR, HFC, MLC, PZC, SCB, TOTAL, TLW, UTB], all recording capital losses in the month of August. TOTAL topped the losers’ list, shedding 25.45% of its value equivalent to GHS 0.99. The market is expected to follow similar trading pattern for the month of September. Investors’ should however anticipate a short term price rally on FML.

Trading activity on the bourse ended with 1 gainer [ALW] and 2 losers [ETI & CAL] yesterday. GOIL topped trading chart as 50,000 shares worth GHS 61,000.00 changed hands. Returns on the Composite and Financial Stock Index pegged at -10.61% and -12.20% respectively.

On the Ghana Alternative Market

Trading activity on the alternative market was hushed as no shares traded yesterday.

HORDS currently lead record capital gains on the GAX, appreciating by 25% from year open

On the Currency market 

The Cedi LOST marginally to the Dollar and Euro but gained to the Pound yesterday.

The local currency exchanged at a mid-rate of GHS 3.9546 to the USD, GHS 5.2127 to the GBP and GHS 4.4449 to the EURO yesterday.

The GCFM Cedi index, a measure of the holistic performance of the Cedi on the interbank market now records a year-to-date depreciation of 3.12%.


Source: Ghana/GN Research

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