The Ghana Stock Exchange (GSE) has returned -20.61% in dollar terms to investors since January this year.
This ranks it 10th among 15 top stock exchanges on the African continent, but its performance is still better than that of the Nigerian Stock Exchange, the largest in the West African sub region. This is important in that it means the GSE remains competitive for international portfolio investors who take a regional approach to structuring their equity investment portfolios, despite its negative returns for a third successive year, its worst run of form since its establishment three decades ago.
The GSE Composite Index which measures the total value of all stocks on the bourse has recorded -18.51% return in cedi terms, so far this year, the difference between dollar and cedi returns the consequence of currency translation due to exchange rate movement.
The negative performance has consequently affected the total market capitalization.
Investors have therefore cumulatively lost about GHc4 billion in asset value, as the market capitalization has fallen to about GHc52.7 billion.
So far, only four out of 38 listed companies on both the main board and Ghana Alternative Market (GAX), the market have appreciated in value since the beginning of this year. They are Aluworks, Camelot, DASPHARMA and SIC.
Interestingly, all the banking stocks have lost value in their shares with the hardest hit being Cal Bank. This is part due to the Bank of Ghana’s directive that banks should not pay dividends during the ongoing COVID 19 crisis.
Nevertheless, trading activities have been quite impressive. Over one million worth of shares valued at more than GHc621 million however exchanged hands yesterday when President Akufo-Addo paid a courtesy call on managers of the exchange.
Head of Research at Databank, Alex Boahene is confident the market will bounce back soon despite the challenges.
“The covid pandemic is partly a factor. You are also talking about the election which is just around the corner. So all this investors are very concerned about the COVID and also the elections that is around the corner. I think the sentiments will not change until in December”, he pointed.
“But in my view, I think that if we are able to have successful election in December, peaceful election which I believe we will then we are likely to see some renewed confidence in the market at the tail end of this year or early next year”, he added.
On the continent, the Malawi Stock Exchange is the number one in terms of performance, gaining 2.59% return for investors so faer this year .
It is followed by the Tunisian TUNINDEX with a year-to-date return of -3.69 percent.
Africa’s largest bourse, the Johannesburg Stock Exchange is number nine ahead of the GSE with an annual return of -17.43%.
The Namibia Stock Exchange and Mauritius Stock Exchange are the worst performing stock markets on the African continent with year-to-date returns of -29.41% and -33.43% respectively.