The Ghana Stock Exchange (GSE) has performed significantly well in the half-year of 2018, having recorded a much higher value of traded securities over the period than in the same period in 2017, especially for the equity market.
The GSE Composite Index recorded an appreciable gain when compared with inflation, interest and exchange rates.
The gain on the GSE Composite Index was 11.62 per cent in the half-year to June 2018, compared to interest equivalent of 91-Dat Bill of 6.66 per cent, inflation of 10.0 per cent and US dollar appreciation against the cedi of 2.43 per cent in the same period.
Mr Kofi Yamoah, GSE Managing Director, who briefed the media on the results of the half-year review, said the market indicators have been mixed, noting that although the volume of shares traded has declined, its value, which was most important was good.
Value of shares traded for the half-year 2018 was GHS457.25 million, compared to GHS364.05 million in the same period in 2017; an increase of 25. 6 per cent.
The value of Bills traded, however, declined from GHS 3,085.5 million in half-year 2017, to GHS2,373.6 million in 2018 due mainly to the shift from short-term bills to longer-term bonds.
He said there had been only one new equity listings in the period under review, with a value of GHS9.5 million, however, the GSE is expecting two more listings before the end of the year: the MTN listing, which was ongoing, and the Energy Commercial Bank.
Mr Yamoah said the performance of the exchange was influenced by both macroeconomic indicators as well as the performance of the listed companies themselves.
Macroeconomic factors were mixed, with both negative and positive influences, including a slower economic activity due to lower oil production and slower growth in agriculture, sell-off of securities by non-resident investors due to profit taking and rise in US Federal rates as well as pressure on the Cedi from a strong US dollar.
On the positive side, the exchange benefitted from continued investor confidence in Ghana from new oil and gas fields expected to come on stream, satisfactory IMF review of the economy, and the anticipated re-basing of Ghana’s GDP in September 2018 with a new base year of 2013.
The various companies listed also had mixed results in the half-year to June 2018, with some posting higher profits in the period than in 2017 and vice versa.
In the banking category which had eight listed companies for instance, three posted higher profits while five posted lower profits for the period.
Two Fast Moving Consumer Goods (FMCG) companies posted higher profits and two posted lower profits, while the two oil companies both recorded higher profits.
“The main equity market, as at June 2018, had a capitalisation of GHS55,188 million, compared to GHS59,384 million at June 2017.
“The second component of the market, the Ghana Alternative Market (GAX) had a capitalization of GHS57 million as at June 2018, compared to GHS44million in 2017, and the third leg of our market is the Ghana Fixed Income Market (GFIM) which had a total of GHS57 million bonds and notes on that market,” he said.
Mr Yamoah said the GSE’s challenges include a lack of macro incentives for attracting issuers and said it will advocate, in the long term, for the NPRA investment threshold of pension funds in equities, which was recently increased from 10 to 20 percent, to be further increased, up to 50 per cent in order to allow many more of second-tier pension funds to invest in the market to boost confidence in the Exchange.
Other challenges, he said, were low listings, and low liquidity in the market.