The Ghana Stock Exchange (GSE) market capitalization has marginally increased by 0.02 percent on Wednesday June 23, 2021 to settle at GHc61.33 billion after the previous day’s, June 22, 2021, decline.
According to Wednesday’s market report released by Ghana Stock Exchange, the GHc12.81 million increase in the market cap is due to major stocks picking up.
Break down of Trading Activity
A breakdown of trading activity suggests at the end of Wednesday’s trading session on the Ghana Stock Exchange, a total of 845,852 shares valued at GH¢1,4468,505.28 changed hands compared to 869,055 shares valued at GH¢1,920,860.25 at the previous session. Meanwhile, Wednesday’s data show 3% decline in volume and 24% decline in turnover.
Furthermore, MTN Ghana dominated trading activity accounting for over 40 percent of total volume traded, totalling 336,928 shares. This is followed by Eco bank Transnational with total volume of shares traded amounting to 281,579 shares. Eco Bank Ghana, Total Petroleum Ghana are also among the top performers on the Ghana stock exchange with total volume traded amounting to 56,740 shares and 50,619 shares respectively.
Unfortunately, the GSE closed the last trading session with one equity losing, namely Total Petroleum Ghana. It lost 0.27 percent of its share price.
Moreover, gains in three counters in the banking industry, petroleum marketing sector and insurance sector pushed the Ghana Stock Exchange Composite Index (GSE-CI) up by 1.23 (0.05%) points to close at 2,643.50 points by close of last trading session.
Meanwhile, this represents a 1-week loss of 0.14%, a 4-week gain of 9.42%, and an overall year-to-date gain of 36.15%.
In addition, the GSE Financial Stocks Index (GSE-FSI) also increased by 0.13% to reach 1,871.41 points, making it a 1-week loss of 0.61%, a 4-week loss of 1.15%, and a year-to-date gain of 4.97%.
Usefulness of Market Cap
Market capitalization is the real-time estimate of how much a company is worth as determined by the stock market, hence the total market value of all outstanding shares. Analysts also hold that market cap shows the size of a company and remains a basic determinant of various characteristics in which investors are interested, including risk.
Given its simplicity and effectiveness for risk assessment, analysts reveal that the market cap can be a helpful metric for investors in determining which stocks they are interested in, and how to diversify various portfolios with companies of different sizes.
Market Watchers further hint that some factors, however, can alter a company’s market cap. This includes significant changes in the price of a stock or when a company issues or repurchases shares.
Although, market cap is used often to determine a company’s value, analysts intimated that it is an inadequate measure of the equity value of a company because the market price on which it is based does not necessarily reflect how much the entire business is worth. Shares are often over- or undervalued by the market, meaning the market price determines only how much the market is willing to pay for its shares.
In spite of the market gradually picking up, volatility is expected to stay high in the near term according to experts.
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