Impressive market run to continue in 2nd half of 2017

On the Ghana Stock Exchange

The first half of the year 2017 witnessed a turnaround of the market from the previous trend seen in the past two years.

Key market indexes showed that the stock market has indeed rebounded. Inflows of funds particularly from the pension funds and provident funds also contributed immensely to the rise in market value. The total market value has risen by 11.51% Year to Date (YTD), from GHS 52.690 billion in 2016 to GHS 58.756 billion. Composite index of the market is currently pegged at 1,917.27 representing YTD change of 13.51% compared to last year where the CI was pegged at -11.97% (1,756.16).

Financial stocks have been the main drivers for market returns in the first half of 2017. Financial stocks currently records YTD market returns of 15.06% with UTB, SCB and GCB returning 100%, 46.07% and 32.35% respectively. Manufacturing stocks such as FML and UNIL have also led record capital gains with aggregate gains of 8.44%. BOPP has outstripped its 2016 YTD performance returning an incredible 92.31% gains to investors.  Mining stocks however have performed poorly so far in the year as a result of fall in gold prices on the world market. On the whole the market currently outperforms the 91 and 182 day t –bill rates, making the stock market attractive to investors.

The outlook for the 2nd half of the year will mimic the 1st half of 2017. Falling rates on treasury bills will likely cause the inflows of more funds into the stock market. Stable electric power supply and local currency performance will also help most manufacturing stocks to improve their market performance. Earnings report and firm profitability will remain the main attraction points for investors on the market. Liquidity on the market will certainly improve on the back of expected influx of funds and listing of more firms on the local bourse.

Trading activity on the bourse ended with 2 gainers (FML and GOIL) and 1 loser (EGH) yesterday. EGH topped the trading chart in terms of volume as 160,100 shares worth GHS 1,121,713.00 changed hands. Returns on the Composite and Financial Stock Index pegged at 13.24% and 15.06 % respectively.

On the Ghana Alternative Market (GAX)
Trading activity on the Alternative Market was hushed as no shares changed hands on the GAX.
HORDS currently lead record capital gains on the GAX, appreciating by 25% from 2016 year open.

On the Currency market

The Cedi LOST marginally to the Dollar and Euro but GAINED to the British Pound on the inter-bank market yesterday.
The local currency exchanged at a mid-rate of GHS 4.3279 to the USD, GHS 5.4851 to the GBP and GHS 4.8487 to the EURO.

The GCFM Cedi index, a measure of the holistic performance of the Cedi on the inter-bank market now records a year-to-date depreciation of 5.33%.

 

GN Research

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