Market capitalization of the Ghana Stock Exchange (GSE) between the period of December 2019 and December 2020, fell by Ghs 2.4 billion.
GSE market capitalization as at end-December 2019 stood at Ghs 56.8 billion. It had however, as at end-December 2020, fallen to Ghs 54.4 billion.
The loss in market capitalization can be attributed to the flight of funds from the local bourse by investors into safe haven assets like gold on the back the outbreak of the covid pandemic in the country.
As contained in the Bank of Ghana’s (BoG) January 2021 Summary of Economic and Financial Data, the decline in the GSE market capitalization represents a year-on-year decline of 2.8 per cent.
The GSE Composite Index (GSE-CI) which measures the overall performance of the local bourse, ended 2020 with negative returns of -14 per cent, representing a further decline in the GSE-CI when compared to the -12.2 per cent negative returns recorded for 2019.
Meanwhile, the year-to-date growth of the GSE Financial Index (GSE-FI) also fell by 5.5 per cent on year-on-year basis from 2019 to 2020.
Market capitalization of the GSE-FI also fell from Ghs 12.6 billion to Ghs 11.7 billion, representing a loss of Ghs 900 million in market capitalization.
The Ghana Stock Exchange witnessed positive returns in the last quarter of 2020 as it returned +5.60% and +1.85% in December to reduce the GSE Composite Index (GSE-CI) year-to-date losses from about 19% to 13.98%.
Making it the fourth worse among seventeen stock markets in Africa. It lost 315.56 points on its year open level of 2,257.15 points to 1,941.59 points. However, in 2019, the GSE-CI recorded a year-to-date return of -12.25% and its level at 2,257.15 points. This also implies that in 2020 in terms of yields, the GSE – CI declined further into the negative trajectory.
