After going through turbulent times in the last couple of years, the Ghana Stock Exchange has defied analysts’ expectation by becoming the best stock market in Africa in the first two months of this year.
Investors will be beaming with smiles as the Accra Bourse has returned 14.41% gain in dollar-term at the end of February this year.
The impressive run of the cedi is also a contributing factor as more investors show interest in the stock market because of getting more return than investing in the dollar.
In cedi term, the market (GSE Composite Index) has recorded 13.96 percentage points gain.
So far, nine companies have appreciated in value as compared to three losers. MTN Ghana is the biggest gainer with 29% appreciation in stock value.
It is followed closely by Cal Bank (15.94%), Soceite Generale (14.06%) and Standard Chartered Bank (11.28%). Importantly, the listed banks are profiting from the financial sector reforms which was a difficult one, but a necessary evil.
Again, MTN Ghana is the most active trading stock on the GSE with several millions of shares exchanging hands since the beginning of the year.
It is the hope that the market will continue its bullish run till the end of the year.
On the continent, the Johannesburg Stock Exchange is the 2nd best performing stock market with a year to date return of 10.66% in dollar term.
It is followed by the Nairobi Stock Exchange and the Egyptian Case with annual returns of 8.11% and 6.50% respectively.
The worst performing market is however the Ivorian BVRM with a return of -5.17%.
Banking and telecom stocks to be most exciting
Head of Databank Research, Alex Boahen, tells Joy Business banking and telecommunication stocks are the ones investors must watch out, going forward into the year.
“Broadly, the banking sector is looking very attractive at the moment. You can also talk about the telecom sector which is also a major beneficiary of net demand or the strong demand for network connectivity–so that also means they are likely to reap some benefit from the current condition where individuals and companies are working from home or learning and studying from home and the like — so the demand for network connectivity is actually going to help the telecoms sector to actually prop up their sales and also profitability”.
“Banks are better capitalized at this moment, unlike before and we have seen it clearly that Ghanaian banks were largely able to contain the shock [covid-19] that came with challenges. So banks are stronger, profitable and we think they will continue to grow”, Mr. Boahen emphasized.