Market Highlights
- Yields on treasury securities will maintain a downward trend
- The half-year trade volume of 49,519 million shares is 89 percent of the total trade volume in 2019
- The volume of securities traded for the month of June 2020 increased by 145 million shares
- Continued investor confidence in the money market accounts for the yield curve
The Ghana Stock Exchange recorded a volume of over 262.2 million traded shares valued at GH¢194 million in the biannual year 2020 amid the outbreak of the novel coronavirus.
The performance, from January to June 2020, represents 107.9 percent growth in volumes and 87.7 percent in value traded over the same period in 2019.
The yield curve sustained its normality following the general positive sentiment investors have in the primary market and the economy at large.
Yields on treasury securities will maintain their downtrend.
The GSE has been on a downward trend for two consecutive years, with the composite index declining by 0.29 percent and the financial index also declining by 6.79 percent in 2018.
The situation was the same in 2018, with the composite index declining by 12.25 percent and the financial index also declining by 6.23 percent.
In 2020, the Composite index has so far declined by 14.55 percent year to date, with the financial index also declining by 10.86 percent year to date.
On a month-on-month basis, trading volumes dipped 16 percent at the end of June after an impressive run in May 2020. A volume of 60.74 million shares were traded in June compared with 72.61 million shares in May.
As uncertainties surrounding the covid-19 pandemic weighed in on investor’s risk appetite, the GSE indices saw equities alter resulting in a total value of GHc46.983 million recorded in June as against GHc47.825 million recorded in May, as stock price dipped 1.76 percent. Daily average value recorded in June was GHc2.174 million compared to GHc2.517 million recorded in May 2020.
The GSE Composite index as at the end of June 2020 had continued the downward trend to record a decline of 15.83 percent (YTD) compared to the 14.01 percent (YTD) fall as at the end of May 2020.
Trading ended on a mixed note in May, with the benchmark Composite Index heading further southwards on account of a bullish market instigated by selling pressures by the telecom giant – MTN and some consumers stocks
The money market continues to dominate investors’ choice following the uncertainties in other markets of the economy.
On the bonds market, trade volume for the first six months of 2020 was up 49.7 percent over the same period in 2019.
Again the half-year trade volume of 49,519 million is 89 percent of the total trade volume in 2019, the Ghana Stock Exchange said.
The volume of securities traded for the month of June 2020 increased by 145 million over the May 2020 figure of more than 8.8 billion while the liquidity of the market went up to 54 percent at the end of June from 32 percent in May, 2020.
Investors Tip on the Stock Market
It is anticipated that irrespective of the Governments demand for funds to service maturing bills and also financing its development projects, yields on treasury securities will maintain their downtrend.
Continued investor confidence in the money market accounts for the yield curve staying positive.
This positive slope reflects investor expectations for the economy to grow in the future and, importantly, for this growth to be associated with a greater expectation that inflation will rise in the future rather than fall.
This expectation of higher inflation leads to expectations that the central bank will tighten monetary policy by raising short-term interest rates in the future to slow economic growth and dampen inflationary pressure.
It also creates a need for a risk premium associated with the uncertainty about the future rate of inflation and the risk this poses to the future value of cash flows.
