The financial sector stocks is on its way to recovery as the Ghana Stock Exchange Financial Index (GSE-FSI) which tracks the financial sector performances made considerably gains in the last four weeks as the Domestic Debt Exchange Programme (DDEP) gradually recedes.
The Index, which currently stands at 1,878.93points at the close of Wednesday’s trading session, recorded a 0.22 percent increase in just one week. While this signifies a year-to-date loss of 8.46 percent, it represents a marked improvement compared to middle of the year.
Meanwhile, this upturn can be attributed to overall market growth, robust first-half banking performance, and the infusion of liquidity from coupon payments from new bonds exchanged under the Domestic Debt Exchange Programme (DDEP).
This comes as the banking sector demonstrated resilience in the first half of 2023, with data indicating improved performance. Prudential data show that as of end-June 2023, total assets of the banking industry reached GH¢242.4 billion – a 21.2 percent annual growth compared to 22.8 percent in June 2022.
Consequently, profit-before-tax surged by an impressive 51.2 percent in June 2023 compared to 20.8 percent growth during the same period of the previous year. Net income or profit-after-tax similarly increased to GH¢4.3billion, marking a significant 51.4 percent rise in June 2023.
According to analysts, the boost in performance of is as a result of increased market confidence, stemming from government’s successful fulfillment of obligations related to new bonds.
Banking Sector Share Performance
At start of the year, Access Bank’s share price was GH¢4.01, which declined to GH¢ 2.82 by the end of August. However, Access Bank has shown signs of recovery, boasting a 9.93 percent gain in one week and a 3.33 percent gain over four weeks, bringing its share price to GH¢3.1.
However, Agricultural Development Bank’s (ADB) share price has remained stable at GH¢5.06.
CAL Bank, while recovering 10 percent of its share price over the last six months, saw a decline from GH¢0.65 at beginning of the year to GH¢0.55 at end of last week; reflecting a 12.7 percent loss over the past four weeks.
Ecobank Ghana Limited (EGH) experienced a 5.09 percent decrease over the past month, but rebounded with a 7.9 percent increase in the last week. Its share price started the year at GH¢6.64 and currently stands at GH¢4.1, while Ecobank Transnational Incorporated (ETI)’s share price remains stable at GH¢0.15.
GCB also started the year at GH¢3.94, dipped to GH¢3.15 in February and has since seen gradual improvement, remaining largely unchanged over the past four weeks at GH¢3.5 cedis.
Republic Bank’s share price has remained constant since start of the year at GH¢0.54.
Meanwhile, Standard Chartered Bank (SCB) shares emerged as the second-most significant gainer in the segment, witnessing a remarkable 41.3 percent increase over the last four weeks and reaching GH¢19.45. However, its preference shares remains unchanged since beginning of the year at GH¢0.9.
Societe Generale has been the standout performer in the segment, achieving gains of 9.72 percent, 75.6 percent and an astonishing 168 percent over the past week, four weeks, and three months respectively.
The Trust Bank’s share price has remained stable throughout the period, maintaining a consistent value of GH¢ 0.82.
With the current trend, it is possible that the financial sector stocks will attain new heights as the year draws closer.
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