File photo Interest rates, inflation, foreign exchange amongst others are factors to consider when making investment decisions in an economy.
Changes in these indicators, directly and indirectly, affect the performance of financial investments, especially the Ghana Stock Exchange (GSE) where various companies are listed.
We have however witnessed changes in the economic figures and news not having an impact on the GSE and vice versa partly because the sectors of the economy are not fully represented on the stock market and the market not being efficient enough.
Out of 23 banks in Ghana, 8 are represented on the Ghana Stock Exchange, and these are the stocks that mainly dictate activities on the bourse.
In the year 2019, the Banking Sector had recorded the largest number of trades at 529 followed by the Distribution Sector at 203 and ICT 112.
The distribution sector is represented is by GOIL, Total Petroleum, Mechanical Lloyd and Produce Buying Company. GOIL recorded 83% of the number of trades while TOTAL recorded 17%. The rest did not record any trades. GOIL is ahead of TOTAL Petroleum because of its consistency in profitability and dividend payments.
The food and beverage sector which is mostly led by Fan Milk Ltd recorded 98% of total trades on the GSE against 2% by Guinness Ghana Ltd. The increase in trades by Fan Milk is due to increase in sales and revenue over the period.
MTN Ghana, the largest stock on the Market is represented by Clydestone Ltd in the ICT Sector. Clydestone did not record any trade in 2019.
The finance sector recorded GHC4.2M in value of trades representing 25% of total trades. MTN Ghana recorded GHC11.9M, the highest in 2019.
The GSE is mostly driven by the banking stocks because of the safety assured resulting in the high number of trades it commands.
The banking sector in 2018 was a nervous period as investors were left in a state of disarray as to whether the banks were still the best sector to invest in. The banking sector crises started on the blind side of most investors as UT Bank, a listed entity at the time had its license revoked. As the crises wore on through to the end of the year 2018 into 2019 activities in the GSE slowed down.Prior to the crises, the GSE has had mixed performance returning some appreciable returns to shareholders. In a year on year analysis, though it can be argued that the […]