The Ghana Stock Exchange (GSE) despite the uncertainty that characterised the keenly contested general elections and the uneasiness following the results declaration, recorded some marginal gains.
On Tuesday, the first trading session of the week, the stock market recorded gains with the Ghana Stock Exchange Composite Index (GSE-CI) appreciating by some 1.54 per cent day-on-day (d/d), consequently reducing its Year-to-Date (YTD) loss to 18.11 per cent.
The Databank DSI-20 Index, which measures the 20 most liquid stocks on the GSE, also gained 1.21 per cent day-on-day, climbing up to 80.13 points.
Furthermore, a total of 2.8 million shares were traded across six counters representing a gross turnover of Ghs 2.6 million.
Ecobank Ghana, Total and MTN Ghana were the three gainers on the market with Ecobank Ghana emerging as top gainer for the day.
On the second day of trading, the market exhibited measured buoyancy, as there were block trades in Guinness Ghana Breweries Ltd. (GGBL) of 2.3 million shares, valued at Ghs 2.04 million, accounting for approximately 93 per cent of the day’s trade volumes.
The bourse’s primary Index, the GSE-CI as well as share prices across the board remained unchanged d/d.
Speaking on the stock market’s performance during the election period and its aftermath, Head of Research at Databank, Alex Boahen stated that there was nothing amiss about the reaction of the market to the current political climate.
According to him, the stability witnessed on the market over the course of the final quarter of the year, coupled with Ghana’s enviable track record of holding comparatively free and fair elections must be taken into consideration and expressed anticipation that a smooth outcome of the polls will reinforce investor confidence.
“We must remember that this year has been affected largely by the coronavirus, which saw investors, particularly foreign investors exist the market and fly to ‘safety’. This wasn’t peculiar to Ghana, though, but was a feature of many emerging markets in Africa and Asia.”
“The general notion is that Ghana will have a smooth election without any significant disruption to economic activities; this has ensured that the market participants have not reacted frantically, one way or another and we expect that post-election optimism will push market activity positively,” he said.
He also called for circumspection when speaking about the efficiency of the local market with respect to the degree to which available information is reflected in stock valuation.
He argued that it is a feature of a still developing market and agrees with operators of the bourse that the low Price-to-Earning (P/E) and Price-to-Book (P/B) ratios of many stocks will make the market very appealing to investors.