The performance of Ghana Stock Exchange (GSE) tumbled at the end of last week Friday, June 18, 2021, trading activities despite an impressive start to the week.
According to market reports, a total of 275,792 shares, corresponding to a market value of GHc 473,421.87, were traded. Compared with the previous GSE trading day (Thursday, June 17), Friday’s data show 62% decline in volume and 40% decline in turnover.
How the Market Performed
The decline is as a result of major stocks on the local bourse trading flat. In the aggregate, eight GSE listed equities participated in trading, ending with only one gainer, namely Benso Oil Palm Plantation, with 1.9% share price appreciation. It however ended with one loser, namely Unilever Ghana (-6.97%).
Meanwhile, MTN Ghana recorded the highest volume of 203,497 traded shares, followed by Unilever Ghana (26,200), GCB Bank (23,460) and CAL Bank (6,521).
The poor performance of these major equities pushed the indices downward. The current market capitalization of the Ghana Stock Exchange as at last Friday stood at GHS 61.5 billion. Market caps are mostly used by investors to determine the worth of various companies listed on the stock exchange. Market capitalization is the correct measure to look at, as it represents the true value as perceived by the overall market.
Market Indices
Regarding the performance of GSE market indices, the benchmark GSE Composite Index (GSE-CI) pared 1.24 (-0.05%) points to close at 2,645.88 points, representing a 1-week loss of 2.48%, a 4-week gain of 9.5%, and an overall year-to-date gain of 36.27%.
Furthermore, the GSE Financial Stocks Index (GSE-FSI) maintained its value at 1,882.83 points, making it a 1-week loss of 0.72%, a 4-week loss of 0.83%, and a year-to-date gain of 5.61%.
However, the money market also show signs of a pickup with treasury bills and bond receiving high oversubscriptions at last auction by the Government of Ghana. The recent weekly auction recorded an oversubscription of 14 percent showing boost in investors’ confidence and a possible interest in the short end of the market. However, the government rejected some bids worth GH¢170 million for the three and six month bills out of the GH¢1.34 billion bids submitted.
Meanwhile, an improvement in investor confidence alongside a compelling market valuation may drive the demand for stocks across the telecommunication, banking, insurance and oil sectors this week.
Moreover, some experts suggested that the current underperformance of some major stocks on the local bourse can be as a result of a flight to safety by most investors due to the volatility in the market currently owing to the current economic conditions in the country.
Moreover, another factor cited by analyst as the reason investors should be optimistic this week is that, non-resident investors may want to purchase the financial instruments as rates look attractive on the financial markets with the cedi also remaining stable last week coupled with a decline in inflation rate.
Other analysts also said that they expected trading activity to pick up this week and the coming days because demand for bargain stocks has increased.
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