The value of stocks traded on the Ghana Stock Exchange (GSE) reached an all-time-high (ATH) in May, as the local bourse saw shares worth GH¢607.31million change hands.
The uptick in market activity ensured that by end of the period the cumulative value of shares traded on a year-to-date (YtD) basis was GH¢1.02billion – a 295.12 percent increase over the comparable period of last year. This was driven by the volume traded (657,115,501), which was up 1,015.12 percent on the 2021 figure.
This comes despite the equities market enduring a period of sustained downturn – with the benchmark composite index (GSE-CI) declining by 8.41 percent as at the end of May. The flameout has been induced primarily by investor concerns over prevailing macroeconomic conditions, as they alter their portfolios in favour of fixed income securities due to higher rates and presumed safety.
Market analysts have however stated that the flurry of activity on the market bodes well for development of the local market, as it points to improved liquidity – a problem that has proven hard to resolve for stakeholders.
“While there is a temptation to run in one direction when we look at the composite index alone, we must remain alive to the many nuances. We are seeing a record level of activity on the market in terms of volumes and value traded, and this is better than the market staying stagnant,” one analyst, who pleaded anonymity as he was yet to obtain clearance to speak on the matter as at the time of filing the report, explained to the B&FT.
The analyst however added that the weight which certain stocks hold, and their ability to tilt the market in one direction or another, is an issue operators of the GSE must look to address in the near term.
A look at the volume and value of trades from beginning of the year, as well as in the month of May, shows that the primary information and communications technology (ICT) stock, MTN, has dominated both sectors; beating its average of 80 percent. The telco was responsible for 99.63 percent and 99.22 percent of the volume and value of shares traded, respectively, on the Accra bourse in May.
Similarly, from January to May, MTN’s stock accounted for 96.2 percent of the volume traded and 95.19 percent of the value of shares traded on the market. The GSE-CI ended the period at 2,554.79 – up 5.52 percent from its value during the comparable period of 2021. The market capitalisation at the end of May stood at GH¢62.28billion.