Analysts propose investment strategy for 2022 as GSE anticipated to be bullish this year
Stock market analysts from SIC Brokerage have proposed an investment strategy for investors trading on the Ghana Stock Exchange (GSE) for this year as it expects the local bourse to continue its bullish performance in 2022.
According to analysts at SIC Brokerage, the stock market is expected to be bullish on the back of the nationwide Covid-19 vaccination programme of the government for this year.
The vaccination programme they noted, will bolster investor confidence and reduce risk of uncertainty on markets related to Covid-19.
Analysts expect returns on equities to be moderate this year and therefore are urging investors to look at prospects for IT, financial and consumer-related stocks.
According to analysts at SIC Brokerage, valuations of financials, particularly that of leading banks, are attractive while IT is in a multi-year up cycle triggered by accelerating digitization drive with earnings possibility looking very good.
An improved depreciation rate of the local currency against the US Dollar is also driving a boom in consumer-related industry, which would benefit all consumer-related stocks. Therefore, focus on high quality stocks in these segments can generate market–beating returns in 2022.
Most of the listed companies have posted impressive performance per their unaudited Q3 financial statement and most companies are expected to declare dividend that we expect to improve investor appetite for dividend paying stocks on the Ghanaian market.
The Ghana Stock Exchange (GSE) ended last year as Africa’s 2nd best performing stock market in both Dollar and Cedi terms.
In Dollar term, the exchange recorded 38.59% return for investors, whilst investors enjoyed 43.66% gain in Cedi term.
During the first nine months of 2021, the GSE was the best performing stock market in Africa, until it was dislodged by the Lusaka Stock Exchange.
This was due to the pressure on the Ghana Cedi during the second half of the year. Importantly, investor sentiments had sustained the growth of the market as with more local investors and pension fund managers increasing their participation on the market.
As at December 31stlast year, the Market Capitalization had grown significantly to close the year at GH¢64.49 billion with 15 listed equities on both the main and Ghana Alternative Market (GAX) registering gains in their market value, whilst five stocks recorded losses.
