Alex Boahen, the Head of Databank Research in an interview has revealed that the Ghana Stock Exchange (GSE) outperformed the expectations of most analysts. He further hinted that the Ghana Stock Exchange will continue its bullish run this year and probably record one of its sterling performance since over 10 years ago.
According to the Head of Databank Research, the 36% return of the GSE Composite Index for the first-half of the year is beyond most analysts’ expectations.
“If you look at our forecast, the market has actually outperformed our expectations quiet significantly.”
He further acknowledged that the Ghana Stock market has shown some prospect with its performance over the years and will continue to improve. “There is however still more room for the market to grow, especially from valuation perspective, we think that some of the key equities that are listed such as FanMilk, some of the banks, MTN Ghana – we still believe that those stocks – will continue to rise and impact on the GSE Composite Index”.
Moreover, Mr. Boahen commenting on the Ghana Stock Exchange emerging as the best performing market on the African continent for the first-half of the year stated that this year will be exciting for shareholders of most listed firms as investors are expected to enjoy significant gain in shares and dividend for the year 2021.
Comparing this year’s performance with last year’s, Alex Boahen believes that “Last year was an election year and typically in an election year, you will see that a lot of investors will play or apply the wait and see attitude. So everybody will want to wait and see what will happen after the elections. So once we were able to pull through successfully, immediately we saw some renewed confidence and that run has continued since December [2020] till now”.
Furthermore, he also expected companies whose performance has dipped as a result of the pandemic to recover.
“We expect earnings to continue to grow, especially from the banks, and we also expect some of the consumer stock companies such as FanMilk which went through some challenges during the lockdown to also recover from the impact of the covid-19. So largely, we will continue to see companies grow their profits and that will also stimulate more interest on the stock market”.
Boahen
Moreover, he also pointed out that investors should expect more capital gain as more equities listed on the Ghana Stock Exchange are performing well.
“What happens is that when the companies on the market are doing well, then you will see lots of portfolio managers or pension fund managers also want to participate in the market. So there will be more demand for stocks on the market”.
Boahen
Meanwhile, he indicated that the performance of GSE is largely attributed to MTN Ghana. The Telecommunication giant has been the most dominant on the market, gaining about 87% so far this year. Guinness Ghana Breweries Limited followed with 43.33%, Soceite Generale with 43.75% and GCB Bank also accounting for 33.33% of shares traded as the best performing stocks on the stock market so far this year.
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