Ghana Stock Exchange anticipates bullish market

Mr Kofi Yamoah clarifying some points to the media shortly after the news briefing. Picture by Charles Benoni OkineMr Kofi Yamoah clarifying some points to the media shortly after the news briefing. Picture by Charles Benoni OkineThe uncertainties among other challenges globally are affecting the performance of stock markets. However, in this story, Charles Benoni Okine reports of a different scenario on the local bourse.

Ghana’s local bourse, the Ghana Stock Exchange (GSE), has recorded an impressive result in the first quarter of the year, a feat which makes it the best performing stock market in the sub region during the period.

The GSE Composite Index, a grouping of equities, indexes or other factors combined in a standardized way, providing a useful statistical measure of overall market or sector performance over time, went up by 44.49 per cent as at the end of March this year as against 8.03 per cent in the same period last year.

The impressive performance of the GSE gives hope of what is to be expected at the end of the year as the local bourse anticipates a bullish market for 2013.

The total market capitlisation, the overall cedi market value of the GSE also rose to GhC57.74 billion from GhC50.69 billion recorded the period last year while the total volume traded

The Chief Executive Officer of the GSE, Mr Kofi Yamoah, who announced these at a news briefing in Accra, said during the same period under review, the value traded in cedi rose from GhC18.29 million to GhC71.5 million.

The news briefing is the first by the GSE to give listed companies and shareholders as well as other stakeholders, updates about the performance of the stock market.

“It was also refreshing for us on the stock market because listed companies also recorded significant increases during the quarter”, he said adding that “Out of the 34 companies, Benso Oil Palm Plantation (BOPP) led the gainers with 132 per cent”.

Of the figure, seven companies gained 50 per cent and above while 11 companies gained above 10 per cent.

Another 11 companies were said to have maintained their prices while it recorded only two losers during the period.

Challenges

The unstable energy situation in the country has thrown the budgets of many companies out of gear as they are forced to power their generating plants at very expensive costs.

The situation has forced many to close down although those on the stock market are yet to announce any such move.

There are issues of the uncertainties surrounding the 2012 Presidential election results which the opposition party is contesting.

Analysts have indicated that the issue has compelled many companies, particularly those with foreign origins to hold back any recapitalization plans because of what they describe as uncertainties.

This is in spite of the fact that, the country was able to hold its own after the general elections which was general described as ‘Free and Fair” by both local and foreign or international observers.

The issue about the investor confidence in the country was evident in last year’s report of the Ghana Investment Promotion Centre (GIPC) as it ws reported that the total value of investments into the country last year dropped to $5.63 billion from $7.68 billion recorded in the year 2011.

The drop which was attributed largely to the election year which creates uncertainty in the minds of investors represents a percentage decline of 26.68. 

At a news conference to announce the results, the acting Chief Executive Officer of the GIPC, Mrs Mawuena Trebah, said the amount recorded emanated from a total of 399 projects registered during the year which showed a decrease of 22.37 per cent when compared to the 514 projects registered in the corresponding year of 2011.

However, she was quick to add that the figure was 34.80 per cent more than that of the investment inflows recorded in the same election year of 2008 where only 296 projects were recorded.

GSE confident

The CEO of the GSE was however, confident of the performance of the stock market in spite of the challenges which he said included the global economic meltdown; the euro crisis among other things.

He said the performance of the financial services sector, particularly those which are listed on the local bourse gives hope.

For the first quarter for instance, the Financial Services Index (FSI) skyrocketed to 49.23 per cent, which was higher than the 5.50 per cent recorded in the same period under review.

Other listed companies that have released their results for last year have also shown some positive results which are expected to bring smiles on the faces of investors.

He said the performance of the GSE has made it attractive to international donors such as the International Finance Corporation (IFC), an arm of the World Bank,  and the African Development Bank (AfDB), which had strongly indicated their intention to raise short to medium term cedi-denominated bonds on the Ghanaian market.

IFC is said to have come far with its application while the AfDB is still in the process. GB

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Story: Charles Benoni Okine/Graphic Business


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