Investors’ Confidence in Ghana Stock Exchange (GSE) Grows

It has been a generally healthy period for the country’s economy (at least on review basis) specifically, the Ghana Stock Exchange as investors’ confidence continues to rise over the past six months as compared to the gross negative returns that were recorded last year -  2016.

Earlier it was the reduction in the average interest rate on loans that could be charged by the nation’s commercial banking institutions.

Now, last week’s closing figures from the Ghana Stock Exchange indicates a clear rise in confidence level of investors in the Ghanaian capital market and economy at large.  

The market showed several of Ghana’s companies traded on the GSE gaining substantially with volumes increasing at about 87% and values at over 1000% respectively.

More notably, were some members of the banking sector whose performance greatly affected the overall positive performance of the market over the last two weeks.  

The leading gainers last week being Standard Chartered and Ghana Commercial Bank stocks with the first recording a whopping value of over Ghc4.4 million.

Outside the banking sector, consumer products companies such as Fan Milk and some others in the Oil Marketing Companies (OMCs) sector like Goil also showed impressive gains during the period.

Reasons for this growing confidence in the economy and particularly, the capital market being: the fall in inflation rate down to 12.1% as recorded in June, earlier tax reviews by the government during its 2017 budget presentation, stabilization in the power sector whose crisis fueled anxiety in the country’s manufacturing industry, among others.

On an aggregate scale, the GSE closed last week Friday with a Composite Index (CI) value of approximately 2086.4: representing a year-to-date increase of about 23.5%.

Some market analyst believe that if the country’s market continues to grow at this pace (led by the capital market which represents the private sector) and the inflation rate falling even further, the result would be an increased number of gainers making a 35% year-to-date increase not out of reach over the next six months.