Bourse sees upturn in Sept as bond market rebounds

Short selling of securities is coming
Ekow Afedzie, Managing Director, Ghana Stock Exchange

…equities a mixed bag

The Ghana Stock Exchange (GSE) has witnessed a recovery in September, driven primarily by activities in the bond market and Ghana Fixed Income Market (GFIM) after a topsy-turvy performance in August.

Following an all-time high of 10.02 billion in volume trade recorded in July, the market witnessed a significant dip of 43.01%, as 5.71 billion was traded in August.

The market has however rebounded with 9.49 billion in trade, valued at GH¢9.699 billion – the second highest in the Market’s history, after July – over the five-year period since the Market’s inception in August of 2015, according to a report by the GSE.

The figure represents a 66% over volume traded in August 2020, and is an impressive 134% higher than the 4.04 billion traded during the corresponding period of 2019.

Furthermore, the cumulative year-to-date (YTD) volume of trade at 74.74 billion was a mammoth increase of 95% from the 38.22 billion recorded at the same point in 2019.

For additional context, 2020 YTD volume of trade dwarfs the 55.55 billion recorded for the entire 2019. Consequently, GH¢76,26billion was recorded as the value of trade from January to September, compared to GH¢37.39billion to 2019.

While a number of factors, including a return to relative normalcy following the apparent win in the battle against COVID-19, have been suggested as possible reasons for the Bond market’s buoyancy, the GH¢3.56billion made available by the government of Ghana to settle customers of defunct financial institutions is considered the most likely reason as liquidity in the Market stood at 68% at the end of September.

It made for different reading in the equity market as there was a 45.07% dip in the volume of high-volume block trades, with 25.27 million recorded in September – down from the 46.01 million traded in August. This is despite an increase in retail activity over the course of the month, as the number of transactions rose from a total 944 in August to 1,087 in September. Consequently, value traded fell by 39.04% to GH¢22.65million compared to the GH¢37.16million recorded in August2020.

Consequently, the GSE Composite Index (GSE-CI) closed September 2020 at 1,856.56 points; a marginal increase of 0.54% from the 1,846.59 points seen at the close in August, but 15.79% lower than the 2,204.79 for the 2019 period.  The total YTD volume and value traded was GH¢404.92million and GH¢295.20million respectively.

“Adjusting for the significant block trade in Ecobank Transnational Incorporated shares that occurred in September 2019, when 3.48million shares valued at GH¢348.73million changed hands, the total volume and value traded during the first three quarters of 2020 were up 59% and 38% compared to the same period of 2019,” the report added.

While market capitalisation in the equity market saw a 1.13% appreciation from GH¢52.57billion in August to GH¢53.16billion in September, this represented a 5.5% dip from the GH¢56.25billion during the same period of 2019.

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