GSE to return to positive trajectory

Good times await investors as the Ghana Stock Exchange is expected to return to positive trajectory soon.

This is because of the recent gains in the value of cedi to the US dollar which may continue even after the first quarter of this year, as well as positive financial statements released by listed companies.

Already, the GSE is targeting an emerging market status from a frontier market position. Ahead of this, it has adopted a three-pronged strategy to enable it reach a ‘Listing 100’ status.

Analysts believe the strong fundamentals of the economy will play a key role to the positive market performance.

Head of Research at Databank Research. Alex Boahen says “Even though the market has had a shaky start which is against what we wanted there is some flashes of optimism, for instance if you look at the results that have come in I think very few have disappointed- the one that has come in so far, generally the trend is that things are improving- and we expect that actually things will trickle down to the stock prices. Also, one key thing to look out when it comes to the stock market investment is the stability of the currency and that has been the cedi has had a good performance so far this year; and in some instances appreciated against the major trading currencies and so that is a good news for the stock exchange.

According to him, the cedi’s value will shore up with the Eurobond proceeds expected to hit the Bank of Ghana’s reserves soon

He explained further: “Once the cedi becomes stable, it improves the level of confidence that actually investors have in the market especially foreign investors, so that is also a good thing to watch. With the Eurobond transaction nearly done, that is likely to shore up Bank of Ghana’s transaction, we are likely to see the cedi shore up in the first quarter and probably the second quarter.’

The GSE Composite Index which is a market capitalization weighted index and measures the average value of the total listed shares has lost about 2.68 percent in value since the beginning of the year.

The market capitalization on the other hand has also lost about 0.26% value since January 1, 2020. The current market capitalisation presently stands at GHS56.5 billion.

In the last two years, the GSE had recorded negative returns for investors.