Stocks on the local bourse performed modestly showing some setbacks for the second straight session. despite
Despite the arrival of vaccines amid the second-wave of the coronavirus pandemic, this did not boost investor sentiment as expected. Major stock indexes on the Ghana Stock Exchange (GSE) continue to depict lows.
This, however, follows after stocks started this week on a good note. The benchmark GSE-Composite index remained flat for the second straight session closing at 2207.27 points. Currently, it’s returning 13.68% to investor’s year-to-date. This index is computed based on the volume weighted average closing price of all listed stocks.
For the GSE financial Stock index, its performance remains quite abysmal this week. This index constitutes only listed stocks from the financial sector including banking and insurance sector stocks. It dipped 10 points to close at 1,863.52 for the second time running with a 4.53% year-to-date return to investors.
The market capitalization slipped to settle at GH¢57.05 billion, staying so for two consecutive days. It captures the total market value of all outstanding shares on the local bourse. Also, investors can use it to determine the worth of various companies listed on the stock exchange.
Moreover, Jason Fernando, a Value Investing Specialist says the market cap is simple and effective for risk assessment. As such, it can be helpful to investors in deciding which stocks to purchase. Also, investors can find ways to diversify various portfolio with companies of different size.
Stock Performance on the Local Bourse so far despite
So far, stocks recording gains on the local bourse from the beginning of the year include: MTN Ghana (29.69%) Cal (15.94%), Societe Generale (14.06%), Stanchart (11.28%), GCB (11.11%) and Republic Bank (9.76%), Total (9.54%), Enterprise Ghana (1.43%) and GOIL (0.67%).
The performance of the stocks of Access Bank Ghana Plc (-2.05), Unilever Ghana Plc (-9.89%), Aluworks (-9.09), and New Gold (-4.64%) continue to remain low. On the local bourse these stocks give negative returns to investors from the start of the year-to-date.
Subsequently, the arrival of vaccines coupled with a compelling market valuation, Analysts predict that this may drive the demand for stocks. Notably, stocks across the telecommunication, banking, insurance and oil sectors. Also, as companies release their full year results showing some increase in their earnings and the ability to meet short-term targets, the stock market is likely to pick up.
Analysts seem to be more bullish about stock market predictions as the pace of economic recovery appears to be improving. Despite vaccine optimism, decline in inflationary pressures and a fairly stable cedi, volatility is may stay high in the near term. So, as investors plan their portfolio strategies for 2021, it suggests that amid the global crises, investors might have to exercise caution.
On other matters arising, Unilever Ghana Plc. notifies its esteemed shareholders and the general investing public of their plans to make tea business a separate legal entity. This is expected to materialize in 2021.
“The planned separation will go through the normal approval process and is expected to be concluded by the end of 2021”.
GSE
