Mr. Kwabena Nyarko, a Financial Market Analyst and the CEO of Pipliquidator Fx, has projected the frontline Ghana Stock Exchange (GSE) equities to witness some meaningful bull-run in the month of June Despite initial setbacks in May and last week.
According to the analyst, the projected bull-run will largely be driven by financial sector stocks, especially while many banks are done releasing their first quarter financial statements. He added that the telecommunication sector, being spearheaded by MTN Ghana will also play a significant role in the local bourse gaining traction in this month of June, 2023.
“My prediction for June outlook is that the frontline GSE stocks will witness a meaningful bull-run despite setbacks experienced last month [May]. The financial sector will hit monthly high with a focus on consolidation.
“While it is important to observe smaller stocks in the midcap and small-cap sectors performing well, for any significant shift to bull market, frontline stocks need to be involved, bringing depth and instilling investor confidence into the Ghana stock market.”
Mr. Kwabena Nyarko
Mr Nyarko explained that the financial sector was the biggest culprit for the falling indices last month due to decline in major financial blue chips. However, he iterated that once it experiences stability, it will have an overall impact on the market.
“The financial sector stocks played a significant role in last month’s declining indices, as they hit bottom lows which reflects that investor fears are on the lower side. Bears are still firmly in the saddle, with bulls waiting for any fresh positive trigger to take over.
“Overall the banking sector is the lifeline of the financial index, so its growth will continue to go hand in hand with the financial index. This explains why the financial indices have been in the negatives for some time now.”
Mr. Kwabena Nyarko
Two Key Market Catalysts
Meanwhile, the two key market catalysts that have gotten the most headlines in the past months remain front and center: inflation and the cedi depreciation.
Mr Nyarko noted that the recent trends indicated that Ghana’s consumer price index (CPI) inflation is easing sharply. As such, he noted that with inflation cooling and the cedi seeing some stability, the second quarter will provide leeway for the market to gain.
Last month, the broader market saw more action than large caps. According to Mr Nyarko, this has been a very healthy trend wherein there was some stocks cutting across sectors witnessing significant price upward moves.
“Small and midcap seeing more action as compared to large caps, reflect growing investor sentiments. However, for any major bull market, frontline stocks also must participate, which brings more depth and instills confidence in the investors.”
Mr. Kwabena Nyarko
All in all, the analyst expected the overall sentiment in the market in the near term to remain sideways, indicating a lack of clear direction.
In the intervening time, last week was a backbreaking week for the Ghana Stock Exchange, as both the GSE-Composite Index and the GSE-Financial Stocks Index experienced decline. The year-to-date performances painted a mixed picture, with the GSE-Composite Index showing a modest growth of 2.92%, while the GSE-Financial Stocks Index struggled, posting a significant decline of -18.34%.
Moreover, the market capitalization also witnessed a decline of GH¢48.53 million, closing the week at GH¢65.92 billion.
Throughout the week, a total of twenty-two (22) equities took part in trade with NewGold ETF, Benso Oil Palm Plantation, Unilever Limited and Guinness Brewery Limited posting gains, while MTN Ghana and other major stocks recorded losses.
A total of 691,853 shares were traded last week, with a decline of 89.28% in trading volume compared to the previous week. In addition, the total value traded amounted during the week amounted to GH¢1,437,295.22, signifying an 81.62% decline In value.
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