Following a record-breaking performance by Ghana Stock Exchange (GSE) in 2024, Mr. Isaac Kwasi Mensah, a Financial Analyst and Portfolio Manager at SIC Financial Services Limited, in an interview with the Vaultz News, has predicted that the Ghana Stock Exchange (GSE) is set to continue its upward trajectory in 2025.
Owing to the historic performance, Mr Kwasi Mensah also projected market capitalization to reach GHS120 billion in the first quarter of 2025, attributing this anticipated growth to favorable macroeconomic conditions, increased investor confidence, and strong performances across key sectors.
“The year 2024 has been transformative for the Ghana Stock Exchange with proportional historic performance of the key indicators, with market capitalization hitting over GHS111 billion. The outlook for the new year 2025 will be a reflection of the 2024 performances.
“In 2025, the GSE will experience continuous growth in 2025 but I foresee the GSE market capitalization potentially crossing GHS120 billion just in the first quarter of the year. This will be driven by anticipated initial public offerings (IPOs) from extractive, SMEs, telecommunications, and energy companies. Moreover, government initiatives to promote the Ghana Alternative Market (GAX) and private sector participation are also likely to play a significant role.”
Mr. Isaac Kwasi Mensah
Additionally, the analyst noted that increased foreign direct investment (FDI) inflows, spurred by Ghana’s improving credit ratings and a stable political climate, will further boost equity markets. Sectors such as agriculture, technology, and healthcare are poised to attract significant investments.
“While the 56.17% growth recorded in 2024 was extraordinary, 2025 is expected to see moderate but steady gains in the GSE-CI. I foresee growth rate of 20–30% in 2025 which aligns with market normalization and investor caution as the global economy adjusts to reduced inflationary pressures and monetary tightening.”
Mr. Isaac Kwasi Mensah
Mr Kwasi Mensah iterated that blue-chip companies in the consumer goods, mining, and oil sectors are expected to drive the index, supported by improved corporate governance practices and the adoption of environmental, social, and governance (ESG) standards.
Financial Stocks to Consolidate Gains
The financial analyst noted that the GSE-FSI is likely to build on its 2024 performance with a projected gain of 15–20%.
According to him, the stabilization of Ghana’s banking sector following the financial sector cleanup and the positive effects of the Domestic Debt Exchange Programme (DDEP) will continue to enhance profitability and investor confidence. “Banks’ focus on digital transformation and SME financing will position them as key players in driving Ghana’s economic growth, reflecting positively on their stock performance.”
Factors Driving the 2025 Forecast
Mr Kwasi Mensah noted that with a new government in place and a high likelihood of fiscal discipline, Ghana’s improved fiscal discipline, debt restructuring outcomes, and a positive trade balance are expected to anchor economic stability in 2025. “A stable cedi, coupled with reduced inflation (projected to fall below 20%), will enhance investor confidence in equity markets,” he added.
Moreover, he noted that the Securities and Exchange Commission (SEC) is expected to implement policies aimed at deepening market participation. Initiatives such as investor education, increased automation of trading systems, and tax incentives for equity investments will further bolster market growth.
“The Bank of Ghana’s support for digital currencies, such as the eCedi, may also indirectly promote equity investments by enhancing financial inclusion and reducing transaction costs.”
Mr. Isaac Kwasi Mensah
Mr Kwasi Mensah further indicated that foreign investor interest is likely to increase, supported by Ghana’s improving economic outlook and the global search for higher yields. However, he noted that geopolitical risks and competition from other emerging markets may temper this optimism.
Challenges to Watch
Despite the promising outlook, the analyst highlighted some challenges to watch in the new year.
“Despite positive domestic developments, external shocks such as global recessions, fluctuating commodity prices, and geopolitical tensions could pose risks to the GSE’s performance.”
Mr. Isaac Kwasi Mensah
While improved liquidity characterized 2024, he stated that the sustainability of this trend remains uncertain. The government must ensure that fiscal policies support domestic borrowing without crowding out private sector investments
“Overvaluation of some stocks and the potential for profit-taking could dampen market momentum. To mitigate this, companies must prioritize transparency and deliver consistent value to shareholders.”
Mr. Isaac Kwasi Mensah
Strategic Recommendations for 2025
In lieu of the forgoing, the analyst has made some strategic recommendations for the local bourse. He stated that investors should focus on a mix of high-growth and dividend-paying stocks across sectors such as energy, technology, and agriculture to optimize returns and minimize risks.
He noted that SMEs listed on the GAX offer growth potential at relatively lower valuations. He thus eutged investors to explore these opportunities as the government continues to promote the platform.
“Given the likelihood of moderate growth, adopting a long-term view will enable investors to benefit from compounding returns and minimize the impact of short-term market volatilities.”
Mr. Isaac Kwasi Mensah
Meanwhile, the Ghana Stock Exchange (GSE) ended 2024 on a historic high, with market capitalization reaching GHS111.4 billion, the GSE Composite Index (GSE-CI) recording a robust 4,888.53 points, and the GSE Financial Stocks Index (GSE-FSI) closing at an impressive 2,380.79 points.
The GSE-CI’s 56.17% year-to-date gain signals significant investor interest, buoyed by strong corporate earnings, improved macroeconomic conditions, and a favorable monetary policy environment.
The GSE-FSI’s 25.2% growth further highlights the recovery of financial institutions, a sector previously weighed down by debt restructuring and liquidity concerns. The record market capitalization underscores increased listings and heightened investor participation, including renewed foreign interest.
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