The passage of the E-levy continues to rattle the Ghanaian stock market, especially the telecommunication sector stocks. The domestic equity market retreated sharply on Monday, April 4, with MTN Ghana stocks suffering a devastating blow as it lost more than 5 per cent of its shares in a single trading session.

This is by far the biggest collapse in market shares for the telecommunication company in this new year, 2022. The sharp fall comes after the government of Ghana passed the controversial Electronic Transactions Levy tax (E-levy) into law. Investor sentiment was dented as a result of MTN equity market losing its momentum. The latest loss is a setback for the market sentiment, which was improving in anticipation, albeit prior to e-levy passage.

In all, 15 GSE listed equities participated in trading, ending with only one gainer, namely Ecobank Transnational (ETI), with 5.88 per cent share price appreciation and also one loser, namely MTN Ghana (-5.66%).

ETI closed its trading day (Monday, April 4, 2022) at GHS0.18 per share on the Ghana Stock Exchange (GSE), recording a 5.88 per cent gain over its previous closing price of GHS0.17.

However, MTN Ghana closed its trading day (Monday, April 4, 2022) at GHS1.00 per share on the Ghana Stock Exchange (GSE), recording a GHS0.06 drop from its previous closing price of GHS1.06. This forced investors looking for cover as intense selling left them poorer by GHS500 million as market capitalization plummeted from GHS64 billion to GHS63.5 billion.

A peep into the advance-decline ratio told it all, as the losses together with the volatility witnessed on Monday, was painful for both investors and traders. But there’s no certainty the losses will last for long, especially given the recent volatility that whipped across the telecommunication shares.

GSE-CI Plummets

This fall has resulted in the breakdown of the consolidation range in the general benchmark index and it might now find support around the 2,600-2,700 zone.

Erasing initial gains amid a choppy session, the benchmark indices wilted with a 2.3 per cent cut to close at 2,679.57 points as the volatility index rose. The benchmark GSE Composite Index (GSE-CI) nosedived by 63.28 points, leading to a week on week loss of 2.31 per cent, a further month on month loss of 1.87 per cent, and an overall year-to-date loss of 3.94 per cent.

Nonetheless, the financial sector index was boosted by the gain in the Ecobank Transnational Incorporated- a financial stock. The GSE Financial Stocks Index (GSE-FSI), increased by 0.6 per cent to reach 2,188.01 points, making it a 1-week gain of 0.6 per cent, a 4-week gain of 3.36 per cent, and a year-to-date gain of 1.68 per cent.

Trading Activity Declines

At the end of the first weekday of trading on the Ghana Stock Exchange (GSE), a total of 185,641 shares, corresponding to a market value of GHS 306,539.66, were traded. Compared with the previous GSE trading day (Friday, April 1), Monday’s data showed 74 per cent decline in volume and 81 percent decline in turnover.

CAL Bank recorded the highest volume of 81,073 traded shares, followed by Societe Generale Ghana (64,402), MTN Ghana (18,175) and Ecobank Ghana (6,758).

Meanwhile, analysts have predicted that the domestic market is likely to remain under pressure given the e-levy bill that is yet to start full implementation. They thus, advice investors to keep calm and be patience to tide over the current situation.