The Ghana Stock Exchange will continue its bullish run this year and probably record one of its sterling performance since over 10 years ago.
The stock market has so far returned about 36% in dollar term for investors, making it the best performing market on the African continent.
Investors are expected to enjoy significant capital gain in shares and dividend for this year.
Head of Databank Research, Alex Boahen, believes this year will be very exciting for shareholders of most listed firms.
“Last year was an election year and typically in an election year, you will see that a lot of investors will play or apply the wait and see attitude. So everybody will want to wait and see what will happen after the elections. So once we were able to pull through successfully, immediately we saw some renewed confidence and that run has continued since December [2020] till now”.
“I must highlight that the performance has been largely broad base although MTN Ghana has been the most dominant on the market, gaining about 87% so far this year”, Mr. Boahen noted.
He pointed out that there will be growth from banks, consumer firms and others that will trigger more investor activities on the stock market.
“We expect earnings to continue to grow, especially from the banks, and we also expect some of the consumer stock companies such as FanMilk which went through some challenges during the lockdown to also recover from the impact of the covid-19. So largely, we will continue to see companies grow their profits and that will also stimulate more interest on the stock market”, Mr. Boahen said.
“What happens is that when the companies on the market are doing well, then you will see lots of portfolio managers or pension fund managers also want to participate in the market. So there will be more demand for stocks on the market”, he stated.
He also said that 36% return of the GSE Composite Index is beyond most analysts’ expectations, adding “If you look at our forecast, the market has actually outperformed our expectations quiet significantly.” “There is however still more room for the market to grow, especially from valuation perspective, we think that some of the key equities that are listed such as FanMilk, some of the banks, MTN Ghana – we still believe that those stocks – will continue to rise and impact on the GSE Composite Index
MTN Ghana, GGBL, Soceite Generale and GCB Bank are best performing stocks
Meanwhile, MTN Ghana (87.50%), Guinness Ghana Breweries Limited (43.33%), Soceite Generale (43.75%) and GCB Bank (33.33%) are the best performing stocks on the stock market so far this year.
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