Databank Research has projected the Ghana Stock Exchange (GSE) to end the year with an 18 percent return, largely driven by the performance of non-financial stocks.

Meanwhile, this revised market outlook represents a significant improvement from the 13% drop recorded at the beginning of the year. The demand for non-financial stocks is expected to continue in the second half of the year, although there may be some profit-taking by investors.

Databank suggested that income investors focus on reliable, high dividend-paying and defensive stocks such as Benso Oil, MTN, and TotalEnergies.

In the agricultural sector, Benso Oil is expected to sustain demand for its stock due to its outstanding performance. Currently, the company is experiencing positive earnings growth and favorable dividends, thanks to high global market prices for crude palm oil and a weakened local currency.

MTN, with its strong financial results and large market cap, is predicted to see its share price rise further. The telecommunication giant’s investments in network infrastructure and innovative offerings have contributed to its ability to generate solid earnings and provide generous dividends, even in uncertain economic times.

TotalEnergies, in the oil marketing sector, is also projected to enjoy a positive market view due to its stable earnings and consistent dividend yield.

Demand for Banking Stocks

However, the demand for banking stocks remains weak due to the negative impact of the Domestic Debt Exchange Programme (DDEP) on earnings growth and the suspension of dividends by the Bank of Ghana.

Investors are concerned about potential losses from the ongoing restructuring of USD-denominated domestic bonds and Cocoa bills.

In July, the GSE Composite Index (GSE-CI) continued its positive momentum with a year-to-date return of 21.30%. Both volume and value traded saw significant increases compared to the previous month, fueled by strong performances from listed companies in their half-year results and a bullish sentiment among investors.

The top-five price gainers for the month were Guinness Ghana, Societe Generale, MTN, CALBank, and TotalEnergies.

Overall, the GSE-CI saw a modest increase and closed at 3,127.43, representing a week-to-date gain of 6.64%, a month-to-date gain of 10.89%, and a year-to-date gain of 27.97%.

Similarly, the GSE Financial Stock Index (GSE-FSI) also recorded modest growth, with a week-to-date gain of 0.5%, a month-to-date gain of 2.1%, and a year-to-date loss of 16.02%.

The GSE ending the year 2023 higher than earlier predicted is a sign that the market is experiencing growth and investor confidence is returning to the local bourse.