Ghana Stock Exchange YTD return crosses 50%

Ghana Stock Exchange YTD

The Ghana Stock Exchange YTD return crossed 50% at the close of today’s trading on 20th November, 2017. This figure represents the highest year-to-date return recorded in the year so far.

At the end of the trading session today, the GSE Composite Index increased by 26.25 points to close at 2,547.12, which represents a year-to-date return of 50.8%. Similarly, the GSE Financial Stocks Index was up by 35.4 points to close at 2,248.21, representing a year-to-date return of 45.48%.

Share price increase was led by Agricultural Development Bank (ADB) with 48 pesewas gain to close the day at GH¢5.28 per share. Access Bank Ghana (ACCESS) followed with 43 pesewas gain to close at GH¢4.00 per share. Furthermore, GCB Bank Ltd. marginally gained 2 pesewas to close at GH¢4.29 per share. There were no losses for the day’s trading.

In terms of YTD returns of individual stocks, Benso Oil Palm Plantation Limited (BOPP) currently lead with 190.87% followed by Ghana Oil Company Limited (GOIL) and Standard Chartered Bank Ltd. (SCB), with 136.36% and 108.85% respectively. HFC Bank (Ghana) Limited and Total Petroleum Ghana Limited follow with 85.33% and 75% respectively. Others include Fan Milk Limited (72.14%), Ecobank Transnational Incorporated (70.00%), Enterprise Group Limited (64.58%), Standard Chartered Bank Ltd. Preference shares (60.00%), Unilever Ghana Limited (48.77%), CAL Bank Limited (39.47%), Agricultural Development Bank (37.86%) and Trust Bank (Gambia) Limited (34.62%). The rest with gains are Sam Woode Limited (25.00%), Societe Generale Ghana Limited (19.35%), GCB Bank Limited (19.17%), Guinness Ghana Breweries Limited (17.79%), Ecobank Ghana Limited (16.15%) and Aluworks Limited (14.29%).

In contrast, stocks which have recorded negative returns in 2017 so far include Mechanical Lloyd Company Limited (-53.33%), Tullow Oil Plc (-35.71%), and Starwin Products Limited (-33.33%). Other stocks with losses so far are SIC Insurance Company Limited (-16.67%), Ayrton Drugs Manufacturing Co. Ltd. (16.67%), PZ Cussons Ghana Limited (-9.09%), Camelot Ghana Limited (-8.33%), AngloGold Ashanti Depository shares (7.69%), Golden Star Resources Limited (-2.56%) and Access Bank Ghana (-2.44%).

Finally, a number of stocks are yet to record any price change for the year so far. These include African Champion Industries Limited, AngloGold Ashanti Limited, Clydestone (Ghana) Limited, Cocoa Processing Company Limited and NewGold Issuer Limited. Others are Golden Web Limited, Produce Buying Company Limited, Pioneer Kitchenware Limited and Transol Solutions Ghana Limited.

Investments on the GSE: Has the foreign investor benefited?

Ghana Stock Exchange YTD

Investors all over the world look out for avenues to put their funds in order to get some returns and the Ghana Stock Exchange is one of the possible options.  In the article “The performance of the GSE vs T-Bills”,published on citifmonline.com on 31st January, 2017, it was revealed that in the long term, the GSE returned marginally better than Treasury bills.

Looking at the GSE from the perspective of a foreign investor takes a different twist. I was in a discussion with an investor who informed me he had invested about USD5 Million on the Ghana Stock Exchange in the last eight years but has lost more than 50% of his investment even though the stock market is returning about 40% Year-To-Date this year (2017). I decided to take a closer look at the figures within that period.

GSE foreign investor _ interbank exchange rate

GSE foreign investor _ inflation year on year

The graphs above depict the performance of the various factors that have impacted the funds placed in the investment over the period. The Ghana Cedi has depreciated more than 70% within the period under consideration while the GSE has returned about 13% on average- More than 5% lower than that of 91 Day Treasury bill.

See also: Ghana Stock Exchange suffers losses after record high

GSE foreign investor _ GSE return

Putting the investor’s funds into perspective, as shown in the table above, the investor converted $5M to Ghana Cedis, which was GHC6M in 2008. He earned about 13% on the investment on the GSE to about GH¢16M. He then converted this amount to Dollars which as at the end of 2016 stood at about $3.8M. The result is that about 24% of his funds had depleted.

Even though the GSE may be returning positively to local investors, the foreign investor that converts Dollars to Cedis to invest in the local bourse may be making a mistake. The main issue here, after the analysis, is the stability of the cedi.

Managers of the Exchange and all stakeholders must work together to ensure measures are put in place to ensure that the GSE is competitive.

One major action that must be taken seriously is getting a policy in place that will compel multinationals to list. Owners of these multinationals who are mostly foreigners receive their dividends in foreign currencies especially the USD which are shipped out of Ghana’s economy. This puts pressure on the local currency thus contributes to depreciation.

Others include taking a second look at the cap on price changes on the Ghana Stock Market. Market Forces should be allowed fully to determine price changes.

In bigger markets, the stock exchanges communicate the health of their economies, but ours do not tell the full picture as companies are not fully represented.

The GSE needs rebranding, repackaging and fresh ideas to ensure acceptable returns to all investors.

 

Credit: Kofi Busia Kyei (Financial analyst)

Source: citibusinessnews



GSE begin second half of the year with impressive performance

registrars of ghana stock exchange

Just one month into the second half of the year, the year-to-date (YTD) return of the Ghana Stock Exchange has tremendously increased from its half-year figure of 16.31% to 31.99% as of 24th July 2017. To this effect, the percentage gained so far in the month of July alone is fairly equal to the overall percentage achieved by the bourse in the first half of the year. The graph below depicts the monthly trend of GSE YTD return for the year so far.

GSE return 2017
Monthly trend of GSE YTD return

Increased market activity played a major factor for the remarkable performance in July. In particular, the sustained interest of investors in stocks such as Standard Chartered Bank contributed to the successive gains on the exchange. In the month of July alone (between 1st and 24th July), Standard Chartered Bank has gained an additional return of 55.43 %. This exceeds the return of 39.98% it recorded in the first six months of the year. Besides Standard Chartered Bank, other stocks that have made good returns in the 3-week period (between 1st and 24th July) are HFC Bank, Fan Milk Limited, Ghana Oil Company Ltd. (Goil) and Benso Oil Plantation Ltd. (BOPP). Between 1st and 24th July 2017, HFC Bank, Fan Milk Limited, Goil, and BOPP have recorded positive returns of 32.73%, 25.21%, 15.79% and 14.06% respectively.

Despite the continuous impressive performance of the exchange, a number of stocks such as Agricultural Development Bank, Golden Web Limited, Cocoa Processing Company Ltd., Mechanical Lloyd Company Limited and Clydestone (Ghana) Ltd. have still not recorded any positive return in the year so far.

GSE records 16.31% return in first half of the year

Transol

After failing to post positive results in the last two years, the Ghana Stock Exchange continue on its track of recovering from previous losses. This is reflected in its performance in the first half of the 2017 year. At the end of trading session yesterday (30th June 2017), the GSE Composite Index inched up by 12.77 points to close at 1,964.55, representing a year-to-date gain of 16.31%. Likewise, the GSE Financial Stocks Index edged up by 11.5 points to close at 1,824.88, representing a year-to-date gain of 18.08%. Yesterday’s gains were made possible by six gainers and no losers. At the end of the trading session, Standard Chartered Bank Limited (SCB) led the gainers with 11 pesewas to close at GH¢17.04 per share. This was followed by Benso Oil Palm Plantation Limited (BOPP) and Ghana Oil Company Limited (GOIL), which gained 8 pesewas and 5 pesewas each to close at GH¢4.40 and GH¢1.87 per share respectively. Fan Milk Limited (FML) also gained 4 pesewas to close at GH¢11.82 per share while Enterprise Group Limited (EGL) and Ecobank Transnational Incorporated (ETI) both gained a pesewa each to close at GH¢2.39 and GH¢0.13 per share respectively.

In relation to the year-to-date performance of individual stocks, UTB bank lead with 133.33%, followed by BOPP (111.54%) and GOIL (70%) respectively. These are then followed by GCB (46.07%), SCB (39.98%), ETI (30%) and SOGEGH (20.97%). Others include CAL bank (16%), ALW (14.29%), SCB PREF (13.33%), TOTAL (12.12%), FML (6.1%), EGH (6.06%) and UNIL (5.76%).

Despite the overall positive results of the exchange, a few listed stocks posted negative returns in the half year. Notable of these stocks are Mechanical Lloyd Company Limited (-33.33%), HFC Bank (-26.67%) and Tullow Oil Plc (-22.10%). Other stocks with losses so far include Starwin Products Limited (-33.3%), Produce Buying Company Limited (33.3%), Ayrton Drugs Manufacturing Co. Ltd. (16.67%), PZ Cussons Ghana Limited (-9.09%), Guinness Ghana Breweries Limited (8.59%) SIC Insurance Company Limited (-8.33%), AngloGold Ashanti Depository shares (-7.69%) and Access Bank Ghana (-7.32%).

In the same period, a few stocks such as Agricultural Development Bank, Golden Web Limited, Cocoa Processing Company Ltd. and Clydestone (Ghana) Ltd. neither recorded a gain nor a loss.