Financial stocks outperform others on GSE in Q1

The Ghana Stock Exchange Financial Stocks Index (GSE-FSI), which measures stocks of publicly-listed financial sector companies
Source: GSE
  • First time in 5 years

The Ghana Stock Exchange Financial Stocks Index (GSE-FSI), which measures stocks of publicly-listed financial sector companies, has for the first time in five years outperformed the rest of the market, first-quarter data from the Exchange have shown.

Compared to the benchmark market-wide Composite Index (GSE-CI), which lost 1.67 percent at end of the period, the GSE-FSI has given investors a modest 1.07 percent gain – maintaining its value at 2,174.96 points.

The latter’s rally gathered steam in March following the release of results for last fiscal year, as the financial index gained 2.64 percent during the month.

Both indices, however, are at significantly lower levels than last year. For context, in 2021 the GSE-CI had returns of 13.9 percent at end of the first quarter, while the GSE-FSI rallied at 3.5 percent. The CI and FSI ended the full year at 43.6 percent and 20.7 percent respectively.

According to a market analyst, the development is not surprising owing to a number of factors – including the respectable performance of financial services providers coupled with the overall muted activity of non-financial stocks, except MTN.

“Despite the fairly suppressed level of activity on the market in the first quarter, the banking and insurance sectors performed admirably. The former has proven strong following the sector clean-up, and was not as affected by the pandemic as other sectors – although we have seen a marginal rise in non-performing loans in the recent earning reports. However, the same cannot be said for other areas,” stated investment analyst at Nimed Capital, Joshua Adagbe.

A look at the market table indicates that the year’s biggest gainers have been financial stocks, including SIC – with Ecobank (ETI), Trust Bank Gambia Limited (TBL) and Guinsess (GGBL) leading the charge. At the other end of the table, Produce Buying Company (PBC), Fan Milk and Benso Oil are the laggards, with Access Bank being the only financial stock in that category.

The MTN and GAX conundrum

The analyst noted that the market continues to be swayed largely by MTN, with the non-activity of others weighing down the wider market.  In 2021, non-financial stocks other than MTN were responsible for a combined 5.85 percent of volume and 10.56 percent of value traded on the local bourse.

“MTN remains an outlier for the rest of the market; and while we see this happen in other jurisdictions, it remains an issue in a market of our size. We however expect that with a return to normalcy other sectors will pick up, perhaps in quarter two and three,” he said.

The biggest culprits of inactivity in the market remain those listed on the Ghana Alternative Market (GAX). Established as a parallel market in 2015 and focusing on small and medium-sized enterprises with strong growth potential, the stocks listed on the GAX have seen little interest or subsequent activity.

Operators of the Exchange have however given clear indication of a proposed re-launch of the alternate market, with adjustments to listing requirements in a bid to ramp-up additional listings and stimulate trade.


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