Alex Boahen, Head of Databank Research, has intimated that though the Ghana Stock Exchange (GSE) will do well this year, it cannot replicate the 2021 performance in 2022.
According to the analyst, the local bourse started the year 2022 on a bad footing compared to last year, and as such, will struggle to catch up with the 2021 performance.
The Ghana stock market registered about 43 percent return for investors in cedi term in 2021, making it the second best bourse on the African continent.
Fanmilk, Guinness Ghana Breweries Limited, Societe Generale and MTN were some of the stocks that drove the performance of the market.
Nonetheless, in less than two weeks of trading, the market has recorded negative returns.
Based on this, Mr. Boahen, however, stated that the market will fairly do well this year, but doubted if it will repeat the 2021 performance. He noted that most of the returns came from other sectors other than the financial sector.
“The sectors that actually performed well last year, talk about MTN which is in the telecom sector, we talk about the Fast-moving consumer goods sector (FMCG), though it surprisingly performed beyond expectation. Most of the returns came from the non-banks or the non-financial sector led by MTN.”Alex Boahen
The analyst commended the GSE for last year’s performance, noting that it performed beyond expectations.
“Overall, last year was a very good one led by MTN. Banks actually failed to perform to expectation though. We also saw the consumer goods sector doing well even though fundamentally we saw some weaknesses because of high cost pressures”.Alex Boahen
However, Mr.Boahen was cautiously optimistic about his prediction of the stock market for this year. He explained that the e-levy will impact MTN Ghana’s performance this year and since it’s a major player on the Exchange, it will affect Exchange’s performance.
“We are cautiously optimistic about the market performance in 2022. The reason is that MTN is a major market player because of its share market capitalization.
“So we’re cautious because as you know, the mobile money business has given significant growth for MTN and with this impending E-Levy (Electronic Transaction Levy) on mobile money, investors are actually not certain about how that could hamper the growth trajectory of the mobile money business. So, that is a concern with regards to MTN”.Alex Boahen
GSE performance in 2022
The GSE Composite Index has so far recorded -1.28 percent in 2022, whilst the GSE Financial Stock Index has registered 7.19 percent return since 1st January 2022.
Market capitalization presently stands at GHc64.12 billion.
For the stocks, the biggest losers so far this year are: MTN Ghana with -2.70 percent and PBC Limited with -33.33 percent.
Trading Activity Improves In Previous Trading Day
At the end of Thursday’s trading session on the Ghana Stock Exchange, a total of 290,602 shares, corresponding to a market value of GHc 339,132.26, were traded. Compared with the previous GSE trading day (Wednesday, January 12), Thursday’s data showed 530 percent improvement in volume and 498 percent improvement in turnover.
Out of the 11 GSE equities that participated in trading, the session ended with only one gainer, namely MTN Ghana, with 1.89 percent share price appreciation; extending its 2.91 percentage gain in the previous outing.