GSE: Bearish performance in 2020 resulted in GHS 2.4 bn loss in market value – Report
The Ghana Stock Exchange (GSE) according to the Bank of Ghana’s (BoG) 2020 Financial Stability Review report, recorded a bearish performance in the year 2020.
According to the BoG, the benchmark Ghana Stock Exchange Composite Index (GSE-CI) closed at 1,941.59 points at the end of 2020 from 2,257.15 points in 2019, representing a decline of 315.56 points in the index.
This resulted in a negative 13.98 percent end of year return, as compared to negative the 12.25 percent recorded in 2019. Consequently, this resulted in a loss of GHS 2.42 billion in market capitalization.
The decline in equity prices, the BoG explains, was due to excess offers over bids arising from investor’s need for liquidity. During the period under consideration, the GSE had thirty-six (36) listed equities on its platform compared to 39 stocks in the same comparative period.
The report further reveals that value of listed companies declined in the year 2020 resulting in the total market capitalization of GHS 54.37 billion recorded at the end of 2020 as compared to GHS 56.79 billion in 2019.
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The decline in market capitalization which translated into a loss of 4.4 percent could mainly be attributed to decreases in stock prices on the Exchange. The factors, which accounted for the decreases in stock prices, were lower demand and excess supply of equity stocks, as investors were eager to offload their assets for cash in light of uncertainties arising from the COVID-19 pandemic.
“In effect, investors experienced a total capital loss of GHS 2.42 billion at the end of 2020.
“The cumulative volume and value of equities traded on the GSE in 2020 decreased significantly as compared to 2019. The volume of shares traded decreased from 3,816,967,510 in 2019 to 695,396,188 in 2020 with a value of GHS 624.20 million and GHS 575.27 million, respectively.
“The volume and value traded represented a decrease of 81.78 per cent and 7.84 per cent respectively from the previous year, suggesting that liquidity on the bourse, declined in the year under review,” stated the report.
