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Business News of Tuesday, 7 May 2013

Source: Joy Business

Ghana Stock Exchange rated best performing market in Africa

The Ghana Stock Exchange is the best performing market in Africa in terms of returns to investors for the first quarter of this year. That’s the conclusion of Databank’s quarterly market research which ranks stock markets in Africa based on dollar returns to investors.

With a little over 45 percent return, the report ranked Ghana’s stock market as the best performer beating other markets like South Africa, Egypt, and Nigeria.

In cedi terms the Ghana Stock Exchange has returned nearly 53 percent to investors. This is far better than the 23 percent you would have earned, if you had invested in Treasury bills or about the average 15 percent annum you would have realized on your bank deposit.

Vice President of Databank Financial Services, Reverend Daniel Ogbarmey Tetteh explains to JOY-BUSINESS, what must be accounting for this.

“Just before the end of last year, we saw the market picking up and showing signs of beginning to have a good rally. So we expected and projected that we’re going to have a goof rally this year driven especially by the financial stocks as evident in the valuation” he said.

But what will this mean to retail investors and can the market sustain the performance.

“If the rally was not supported by the fundamentals, that’s when it would have been a source of worry because of the possible correction in the near future. If you monitor the full year 2012 results and even the Q1 results that have being released it gives some support to the price rally seen on our markets. So if anything at all, the upward trend is likely to be sustained - maybe not at the same pace but we still expect the market to inch up. For me I would like to caution retail investors to know that investing in shares is a long term play and so shouldn’t just be excited about the short term benefits but also get interested in the long term benefits” he said.

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