Ms Gifty Annor-Sika, a financial market expert and the President of Women in Forex Ghana, has given her verdict for the first half of the year, noting that a solid foundation has been laid for the Ghana Stock Exchange (GSE) to better its performance in the second half of 2023.

According to the analyst, the local bourse beat many expectations in the first half of the year, powering higher despite numerous obstacles ranging from debt restructuring, banking sector turmoil to recurring doubts about the economy’s health.

“The first half of the year has been a rollercoaster ride, amidst numerous economic obstacles. Particularly, the macro economic indicators were the culprits threatening the growth of the Ghana Stock market. However, those turmoils set the stage for a better second half takeoff.”
Gifty Annor-Sika

Gifty Annor-Sika meanwhile, hailed the first half performance of the Accra bourse, despite starting on the weaker footing, while forecasting that the second half performance will surpass the first half.

“The first half rebound surprised many analysts after equities’ brutal 2022 decline. All things being equal, and if history is a guide, the GSE stocks’ strong start may give them a tailwind in the second half.”
Gifty Annor-Sika

According to the analyst, Ghana’s economy managed to avoid the dreaded recession in the first half as the Bank of Ghana managed to sustain reserves and the central bank’s aggressive monetary policy tightening which eventually paid off by bringing the inflation figures by over 10 percentage points.

“The prospect of a soft-landing, at least in investors’ minds, has gone from improbable early in the year to now quite possible. Of course, this positive market scenario can evaporate quickly if inflation, depreciation and other key economic indicators disappoint in the second half.”
Gifty Annor-Sika

However, Ms Annor-Sika explained that the financial sector stocks gave away the financial indices, probably as a result of the government’s debt restructuring which has affected the banking sector.

“The drawback of the first half performance that I can pinpoint is the financial indices. It didn’t perform as we anticipated. But the best explanation for the inability of the financial index to catch up with the benchmark index is because of the government’s debt exchange programme which roped in the banking sector. However, it did not end up being the systemic event many had feared, and investors remain resolute.”
Gifty Annor-Sika

Rising Interest Rate

The analyst, in her postmortem analysis of the first half performance of the Ghana Stock Exchange opined that rising rates in the short end of the market boosted yields in the T-bills and government bonds which sent many potential investors to that department of the market and in a way has affected the overall performance of the GSE.

“Rising rates have boosted yields on fixed income assets and cash to their highest levels in decades, finally giving investors an alternative to equities. That does not appear to have hobbled stock returns much so far this year, but it may dull the allure of equities going forward if rates stay elevated.”
Gifty Annor-Sika

Meanwhile, the final week of the first half of the year which also brought to an end the second quarter summed up the performance of the local bourse in over the course of the first six months of the year.

The stock market displayed a robust performance during the final week of the second quarter, with the GSE-Composite Index advancing by an impressive 71.69 points to close at 2,808.03 points, resulting in year-to-date returns of 14.90%.

However, the GSE-Financial Stocks Index experienced a slight dip of 0.15% during the same period, leading to a year-to-date performance of -17.57%.

Standard Chartered Bank (SCB) and MTN Ghana (MTNGH) emerged as notable gainers. In contrast, Access Bank Ghana (ACCESS) was the notable laggard in the final week.

The market exhibited a noteworthy rebound in market capitalization, witnessing an increase of GH¢1,971.01 million from the previous week. As of the latest figures, market capitalization now stands at GH¢70.24 billion, signifying renewed investor confidence. This renewed confidence will gradually work into the second half of the year.