Ghana's stock market continues to rally strongly this year

The stock market continues to rally strongly this year, with the all-share index gaining further points on Thursday to boost the year-to-date return to 12.15 percent.

The financial stocks index also improved by 5.44 points to 1,873.31, raising the year-to-date return to 5.08 percent.

The surge in the market appears to be driven by an increase in trading activity, with data for the month of January indicating that trades were almost double the volume recorded in the same period of 2020.

In January this year, 98.73 million trades valued at GH¢69.72 million were transacted on the bourse as against 56.29 million trades valued at GH¢45.44m in January 2020.

MTN Ghana dominated trades in the period with 96.27 million shares valued at GH¢62.81 million, representing more than 90 percent of trades in volume and value.

The recovery of the market, after a dismal performance in 2020, points to a significant improvement in investor sentiments, as most are keen on taking advantage of the current undervaluation of equities.

“The market is positive this year. This is the time for more investors to get onto the market,” said David Tetteh, a technical consultant at the Ghana Stock Exchange, in an interview with Business24.

Weekly successive trades continued to appreciate as the benchmark index advanced by 111.27 points on the back of four stocks to close last week at 2,166.29, with a year-to-date return of 11.57 percent. The market capitalisation increased by 2.57 percent to settle at GH¢56.79 billion.

Analysts have said factors that will play to the advantage of the stock market include the low interest rate environment in advanced markets and the high market valuation on the back of the consistent higher performance of foreign markets for the past two years.