The Ghana Stock Exchange (GSE) has continued its decline over the course of the past one week – with its benchmark Composite Index (GSE-CI) falling by 60.76 points over the period after breaching the 3,000-point mark last year and – from a high 2,789.52 points this year to 2,728.76 points.
The recent reversal of fortunes has seen the market lose some GH¢1billion in market capitalisation – a 1.56 percent drop from GH¢64.2billion in the to GH¢63.2billion at the close of trading in the last week day of February 4, 2022.
Consequently, the GSE-CI’s year-to-date return has shrunk by more than 3 percentage points, from 1.07 percent to -2.17 percent for the period under consideration. This development has been marked by a fall in the share price of market leader MTN, as well as other top performers including oil and gas and financial stocks.
E-levy to Blame?
Since its initial public listing in 2018, telecommunications giant, MTN, has dominated the market; driving total volume traded by as much as 75 percent and 87 percent in the first and third quarters of last year respectively, and reaching a share price high of GH¢1.33 – a 103 percent appreciation over its price at beginning of last year.
The telco’s performance has in no small part been spurred by the growth of its mobile money business, which raked in the equivalent of US$216.4million in 2020.
Its share price, however, has witnessed a decline since the introduction of the e-levy.
Thus, analysts believe investors are already reacting to expected impacts of the newly introduced 1.75 percent electronic transactions levy on the profitability of MTN.
Analysts thus, attributed the decline to some uncertainties concerning MTN. This is because shortly after MTN reached an all-time high in share price, the budget was read and it began seeing some selling pressures immediately; and that is mainly due to the concerns about the E-levy and its implications on the profitability of Mobile Money and MTN as a whole.
MTN began the year 2022 with a share price of GH¢1.11 but has since lost 2.7% off that price valuation, ranking it fifth on the GSE in terms of year-to-date performance.
Trading Activity on Last Week’s Trading Day
At the end of last week’s trading day activities on the Ghana Stock Exchange (GSE), a total of 28,106 shares, corresponding to a market value of GHS 147,020.14, were traded.
In the aggregate, 12 GSE equities participated in trading, ending with one loser, namely Benso Oil Palm Plantation, with 2.71% share price depreciation. Benso Oil Palm Plantation recorded the highest volume of 13,701 traded shares, followed by GCB Bank (4,137), Ecobank Ghana (4,012) and CAL Bank (3,436).
The GSE Financial Stocks Index (GSE-FSI), however, maintained its value at 2,127.91 points, making it a 1-week loss of 0.19 percent, a 4-week loss of 1.11 percent, and a year-to-date loss of 1.11 percent.
Conclusively, MTN and other major stocks have been a huge component in the market’s performance; so if they are falling, then the market as a whole is likely to take a hit too.
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