Possible price drop in commodity-based stocks in the short term

On the Ghana Stock Exchange

Continuous dip in some key commodity prices on the world market is likely to impact the output of certain commodity-bound listed companies on the Ghana Stock Exchange.  The world price of Crude Oil is currently on a downward trajectory given the rise in the supply of oil output while demand remains stifled. This has led to the price of crude oil trading below USD 45.00 per barrel. The price of Cocoa has also taken a nose dive on the global market falling below USD 2,000 MT. With the current output levels of cocoa, GN Analysts foresee a dip in government revenue in 2017 from cocoa and oil production should the current trend persist on the world market. The price of gold however has been fairly stable owing to consistent production levels especially from South Africa.


Companies such as Tullow (TLW), Cocoa Processing Company [CPC] and Produce Buying Company [PBC] could face serious challenges in improving on their profitability from the results churned out in 2016. GN Analysts expect a direct impact of the dwindling commodity prices on the share performance of the afore-mentioned equities as a result of weakened company fundamentals. TLW, PBC and CPC could record dips in their share price in the short term.


Trading activity on the bourse ended with 2 gainers [FML, EGL and SCB] and 2 losers [SIC and SOGEGH] yesterday. SOGEGH shares topped the trading chart in terms of volume as 524,500 shares worth GHS 398,620.00 changed hands. Returns on the Composite and Financial Stock Index pegged at 14.81% and 16.46% 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 all the major trading currencies on the inter-bank market yesterday. The local currency exchanged at a mid-rate of GHS 4.3521 to the USD, GHS 5.5121 to the GBP and GHS 4.8503 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 5.74%.


GN Research


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