The performance of Ghana Stock Exchange (GSE) and trading activity plummeted at the close of market on the first week-day, Monday, July 5, 2021 despite ending the previous session with a relatively higher performance and trading activity.
According to market reports, a total of 76,433 shares, corresponding to a market value of GHc 72,824.72 were traded. Compared with the previous GSE trading day (Friday, July 2, 2021), Monday’s data show 52% decline in volume. However, the total volume of shares traded on Friday was 157,926 Shares.
How the Market Performed
The decline is as a result of major stocks on the local bourse trading flat. In the aggregate, twelve (12) GSE listed equities participated in trading, ending with no gainers nor losers. This means that, the opening prices of all the twelve equities listed were the same as the closing prices.
Meanwhile, Societe Generale Ghana recorded the highest volume of 40,831 traded shares, followed by MTN Ghana 17,108 shares, Stanchart Preferential Shares totaling 10,000 and CAL Bank with 2,230 shares.
The poor performance of these major equities pushed the indices downward. The current market capitalization of the Ghana Stock Exchange as at last trading session on Monday stood at GHc 61.55 billion.
Regarding the performance of GSE market indices, the benchmark GSE Composite Index (GSE-CI) did not see any change, closing at the same mark as it opened at 2,652.21, representing a 1-week gain of 0.33%, a 4-week loss of 2.41%, but an overall year-to-date gain of 36.6%.
Furthermore, the GSE Financial Stocks Index (GSE-FSI) maintained its value at 1,886.92 points, making it a 1-week gain of 0.83%, a 4-week loss of 1.08%, and a year-to-date gain of 5.84%
Similarly, the money market also showed signs of a decline particularly with treasury bills and bond receiving high under subscriptions at last auction by the Government of Ghana. The recent weekly auction recorded an under subscription of GHc228.24 million. This shows a dwindling in investors’ confidence and a possible disinterest in the short end of the market. This, according to, experts can partly be blamed on the low interest rate of the 91-day, 182-day and 364-day Treasury bills. All in all, the government of Ghana tendered a total of GH¢1,525.17 Million bids at last auction. However, only GH¢1,296.93 Million worth of bills were sold.
However, 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.
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 the rest of the days of the week.
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 expect trading activity to pick up in the coming days because demand for bargain stocks has increased.