As the stock market continues its rollercoaster ride, investors are keen to identify the stocks that promise the best returns.
Consequently, Mr. Isaac Kwasi Mensah, a Financial Analyst and Portfolio Manager at SIC Financial Services Limited, in an interview with the Vaultz News has highlighted several top picks for August, forecasting strong performance based on recent trends, company fundamentals, and broader market conditions.
According to the analyst, the Ghana Stock Exchange (GSE) has experienced a remarkable rebound in 2024, establishing itself as one of the best-performing markets in Africa.
“Looking at the data, as of the beginning of August, the GSE Composite Index [(GSE-CI)] reported a year-to-date gain of 46.52%, reflecting the overall recovery and growth in the Ghanaian stock market which is a superior performance to same period last year.
“This resurgence is particularly notable considering the economic challenges faced in recent years, including the domestic debt exchange program and the broader economic downturn. The renewed confidence in the market has attracted investor interest across various sectors, leading to impressive performances by several stocks.”
Mr. Isaac Kwasi Mensah
Predicted Best Performing Stocks for August
One of the best performing stocks predicted by the analyst for this month is MTN Ghana. MTN Ghana, the leading telecommunications provider, remains a cornerstone of the GSE.
“Despite a slight decline in recent trading sessions, MTN Ghana continues to attract investors due to its strong market position and consistent financial performance. The company’s robust dividend payouts and favorable market valuation have made it a preferred choice for both local and international investors.
“I think investors should not hesitate to put their money on MTN stocks for this month because As the telecom sector expands and digital services grow in importance, MTN Ghana’s prospects appear promising, supported by ongoing network upgrades and innovations.”
Mr. Isaac Kwasi Mensah
Meanwhile, since the beginning of the year, MTN has added a massive 72.1% to its share price, ranking it third on the GSE in terms of year-to-date performance.
Moreover, Mr Kwasi Mensah picked GCB Bank (GCB) stocks to also light the month of August. The financial sector giant is one of the standout performers on the local bourse, which has seen a notable increase in its stock value.
“As of early August, GCB’s stock rose by 5.36%, driven by the banking sector’s renewed hope after the debt restructuring which has affected the financial sector the most. Recently, the financial sector has been bolstered by initiatives aimed at strengthening capital buffers, which have improved investor confidence.
“Owing to this, the banking sector is poised for further growth, as banks become better equipped to absorb financial shocks and maintain stability. As such, GCB being fundamental to GSE’s performance in recent years, will be experience upticks.”
Mr. Isaac Kwasi Mensah
Mr Kwasi Mensah further pointed out Benso Oil Palm Plantation (BOPP) as another headline stock for the month of August. According to him, Benso Oil Palm Plantation has also been a notable performer. “Although its recent gains were modest, the agriculture sector, particularly consumer goods, is expected to benefit from the country’s economic stabilization”.
“The sustained demand for agricultural products and the positive outlook for consumer spending provide a favorable environment for companies like BOPP to thrive. The rebounding economy, along with a steady exchange rate and declining inflation, is anticipated to support continued growth in this sector.”
Mr. Isaac Kwasi Mensah
In addition to that, CalBank (CAL) is also among the stocks anticipated to do well in the month of August. According to the analyst, CalBank has seen significant trading volumes, indicating strong investor interest.
“As with other financial institutions, CalBank stands to benefit from the sector-wide improvements and economic recovery. The bank’s focus on strengthening its capital base and improving operational efficiencies has positioned it well in the market. The broader economic recovery and the resurgence of consumer and business confidence are likely to provide a favorable backdrop for further growth this month.”
Mr. Isaac Kwasi Mensah
In the oil and gas sector, TotalEnergies Marketing Ghana (TOTAL) got the nod from Mr Kwasi Mensah. He explained that in the oil marketing sector, TotalEnergies Marketing Ghana has shown resilience and growth.
“The sector benefits from steady demand for fuel and a favorable inflation and foreign exchange outlook. TotalEnergies, with its strong market presence and strategic initiatives, is well-positioned to capitalize on these favorable conditions. The company’s performance is indicative of the broader trends in the energy sector, where stable macroeconomic conditions support continued demand for energy products.”
Mr. Isaac Kwasi Mensah
Market Outlook
Mr Kwasi Mensah noted that the GSE’s impressive performance is underpinned by a confluence of factors, including a somewhat stable macroeconomic environment, improved investor sentiment, and strategic policy measures.
According to him, the government’s efforts to address economic challenges, such as through the IMF’s bailout package, have bolstered confidence in the market. Additionally, the steadying of the exchange rate in recent weeks and a decline in inflation have created a more predictable economic environment, encouraging investment.
Mr Kwasi Mensah indicated that as the GSE continues to attract both local and foreign investors, the prospects for sustained growth remain strong. However, he stated that maintaining this momentum will require continued efforts to strengthen the financial sector, support economic diversification, and enhance market infrastructure.
The analyst averred that the outlook for the remainder of 2024 appears positive, with key sectors poised for growth, offering a range of opportunities for investors seeking to capitalize on the market’s potential.
In the end, Mr Mensah charged investors looking to participate in the Ghanaian market to consider these sectors and companies as part of a diversified investment strategy, keeping in mind the dynamic nature of market conditions.
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