5 equity stocks drive GSE impressive run in Sept

Macroeconomic concerns weigh down GSE in January

September saw five stocks rally the equities market, ensuring that the Ghana Stock Exchange (GSE) remains on course to provide its highest return in half a decade with the Composite Index (GSE-CI) returning a favorable 47.06 percent year-to-date (YTD).

The local equities market was mainly driven by the share prices of Fan Milk Limited (FML), which rose by 101.25 percent; followed by Société Générale Ghana (SOGEGH), Ecobank Transnational Incorporated (ETI), Benso Oil Palm Plantation (BOPP) as well as Enterprise Group (EGL); which realised about 31.58 percent, 14.29 percent, 13.94 percent and 12.75 percent rise in share prices.

A peek at the main market’s cummulative performance from January to September 2021, in relation to the comparable period in 2020, shows that the volume of shares traded lessened by 0.82 percent from 403.92 million last year to 400.60 million in 2021. However, in value terms, there was an increase of 39.26 percent from about GH¢295.20 million to GH¢411.10 million, indicating a continuous rise in the value shares on the local equities market.

Consequently, the year-on-year market capitalisation and the primary index, the GSE Composite Index (GSE-CI) are up 20.73 percent and 53.88 percent, respectively, with analysts anticipating further bullishness on the local bourse.

Fan Milk

Responding specifically to the high performance of the share price of Fun Milk Limited, a market analyst with Fincap Securities, John Nani, said the leap in the share price of FML share is off the back of good fundamentals, which stems from a recovery of their outdoor business coupled with increased export to neighbouring countries.

“The 101.25 percent leap in the share price of FML share is off the back of good fundamentals. The company has seen a more than 29 percent increase in revenue from mid-year last year to mid-year this year. The strong growth stems from a recovery of their outdoor business coupled with increased export to neighbouring countries,” Mr. Nani said in an interview with B&FT.

He added: “This growth has increased investor appetite for FML shares, thus, driving the share price through the roof. There are not enough FML shares in the market to meet the increasing demand.”

FanMilk Plc, Ghana’s leading producer of dairy-based food products, has increased its investments in the country, with the opening of a new office complex, among other ongoing projects such as a new biomass boiler, and solar systems.

“As of the end of Q3 last year, FML shares had tumbled by 74.76 percent, dropping from a year open of GH¢4.14 to GH¢1.04. The more than 100 percent jump in the share price over the month of September indicates that FML is bouncing back better and I anticipate more growth in share price towards the end of the year,” the anaylst emphasised.

Data made available by the GSE suggests that FML has continued the pattern into October, seeing its share prices appreciate by 9.92 percent, 9.79 percent, and 9.86 percent on consecutive days beginning October 4, 2021. As of the time of going to press, yesterday, the stock had grown by some 9.9 percent from GH¢4.68 per share to GH¢5.14, accruing 175 percent over the past four-week period alone.

This comes after significant lows in 2014 and 2015, with -11.77 percent and -15.33 percent respectively, caused in no small part by the crushing power crisis of the period. Also, the toll of the financial sector clean-up saw 2018 close at -0.29 percent, 2019 saw -12.25 percent and 2020 was worse off at 13.98 percent.

The rebound has been sustained by investor confidence which has been boosted particularly by the performance and fundamentals of stocks such as MTN, CAL, TOTAL, GCB, and ETI.

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