Equities, bonds on bearish run in August – GSE

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Ekow Afedzie--MD Ghana Stock Exchange

… despite rise in volumes traded

The nation’s bourse, the Ghana Stock Exchange (GSE), witnessed a bearish run in the equity and bond markets for August that eroded gains recorded on the market in July, the GSE monthly report has revealed.

The development, which is sure to a leave a section of investors disappointed, was attributed to a slowdown in the rate of trading activity on the markets for the month.

In the equity market, the number of shares traded during the month under consideration stood at 46,007,442 at the end of August, down from 70,388,905 – a difference of 24,331,463 traded shares – representing a significant 34.64 percent drop from July.

Additionally, the value of shares traded for the month dropped by 10.18 percent from GH¢41,375,349.45 in July to GH¢37,161,800.78 in August.

The market value of all listed companies, the market capitalisation, also closed in the red with a negative GH¢154million or 0.29 percent drop from GH¢52.7billion to GH¢52.6billion during the same time frame.

Daily average value of shares traded saw a whopping 44.85 percent fall from GH¢2.9million in July to GH¢1.6million in August.

The GSE’s Composite Index (GSE-CI), the metric for measuring the overall performance of the exchange, closed the month down 1.65 percent to 1,846.59 points, representing a 19.85 percent year-to-date loss compared to 16.81 percent drop recorded at the end of July.

This was largely due to no trades in 27 of the 40 listed companies – with Fan Milk, Unilever and Guinness Ghana Limited recording losses.

Despite the gloom, the equity market witnessed a surge in cumulative volume and value of shares traded year-to-date with 378,645,100 from 153,308,690 shares traded, valued at GH¢272,545,117.64 from GH¢153,907,629.76 year-on-year.

This translates to a 146.98 and 77.08 percent increase for volume and value of shares traded respectively as at August, compared to the same time-frame in 2019.

The situation was not dissimilar in the bond market, as the Ghana Fixed Income Market (GFIM) witnessed a significant 43.01 percent dip in monthly volumes traded – from an all-time high of GH¢10.02billion recorded in July to GH¢5.71billion for August.

Nonetheless, year-on-year, volumes traded were up by 30.6 percent to 5,710,860,984 with a corresponding value of GH¢5,819,395,192.62 from GH¢4,373,117,491 for the same period in 2019.

Furthermore, cumulative traded volume was up by 47.63 percent to 65,251,333,271 from 33,426,272,397 for the comparable period in 2019.

New issuances and a rebalancing of portfolios by fund managers were cited as possible reasons for the developments in the bond market.

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