The Ghana Stock Exchange (GSE) has exceeded the GH¢80billion mark in market capitalisation for the first time, concluding April 2024 at GH¢80.32 billion.

The surge in market capitalisation reflects increased trading activity. On the final day of April, the GSE saw some 29,700 shares traded, representing a market value of approximately GH¢180,800. This translates to a three percent increase in volume and a 91 percent rise in turnover compared to the previous trading day.

This bullish performance is mirrored in the GSE Composite Index (GSE-CI), which ended the period with an year-to-date (YTD) return of 17.79 percent.

Analysts attribute this growth to the strong performance of listed companies, particularly in the non-financial sector.

Leading the pack were Unilever (+48 percent), NewGold ETF (+44 percent), Access Bank (+41 percent), Guinness (+31 percent), and MTN (+25 percent).

Mover

Despite ranking fifth among the top performers for the period, market leader MTN has been a standout story. The telecommunication giant’s share price has skyrocketed to a record-breaking GH¢1.75, a 133 percent increase from its initial public offering (IPO) price of GH¢0.75.

This rally has propelled its market capitalisation to GH¢23.2billion, accounting for 28.9 percent of the GSE’s total value.

The telco’s bullishness can be attributed to its strong financial results. In 2023, MTN Ghana reported a 34.6 percent increase in total revenue to GH¢13.35billion. This positive momentum continued in the first quarter of 2024, with total revenue rising by 32.5 percent year-on-year to GH¢3.85billion. Service revenue, their primary income stream, mirrored this growth with a 32.4 percent increase to GH¢3.83billion.

Profitability also experienced a significant uptick. MTN’s profit after tax jumped by 49.3 percent to GH¢1.11billion, driven by a combination of increased revenue and a slight decrease in Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) margin. The company also invested heavily in network infrastructure during the quarter, with a total capital expenditure (capex) of GH¢1.21billion.

On trend

All of these have translated into MTN being the most traded stock on the GSE between the end of January and April this year. The company traded 250 million shares valued at GH¢333million during this period, with an average of nearly 4 million shares changing hands per session. The highest daily trading volume for the period was 183 million shares achieved on March 13.

The development comes as little surprise to market watchers. Earlier this year, Databank Research, in its Quarterly Note dubbed ‘From Fog to Clearing Skies Shooting for Sustainable Growth’, said it expected MTN to benefit from the increased interest in equities, a strong market position and continued capex investments

“We expect Ghana’s telco giant, MTNGH, to continue to perform well in 2024 as its favourable market valuation, strong financial performance and consistent dividend payout continue to draw investor interest. MTN Ghana holds circa 70 percent market share in voice subscriptions, about 75 percent market share in the mobile data market, and approximately 90 percent of all mobile money deposits in the country,” a portion of the note read.

It continued with the expectation that the telco is set for further growth, having invested over GH¢7.7billion in capex over the past three years. Additionally, to maintain profitability in the face of rising costs, the company raised prices on its voice and Internet plans by 15 percent in November last year.

“Due to the company’s wide range of products, service quality and entrenched position in Ghanaian consumer culture, we expect the net effect of the price hikes to result in increased profits and dividends for the company in the coming quarters,” it added.