#MoneyReport2023: Navigating volatility—GSE’s resilience amid changing market tides

Abena Amoah, Managing Director, Ghana Stock Exchange
  • amid economic flux, GSE forges ahead with resilience and innovation

In the dynamic realm of financial markets, the ability to adapt is the linchpin of survival. The Ghana Stock Exchange (GSE) stands as a testament to this truth, weathering storms and emerging stronger from each challenge. As we delve into the remarkable journey of the GSE, we uncover a story of record-breaking achievements, strategic ingenuity, and an unwavering commitment to sustainability.

Charting new heights: GSE’s remarkable market capitalisation achievement

With a sense of pride, we unveil the GSE’s most recent triumph – an unprecedented market capitalisation of GH¢70.24billion in the first half of this year. This achievement transcends mere numbers; it symbolises the evolving dynamics of investor confidence and market sentiment.

The upsurge in market capitalisation finds its roots in factors such as heightened investor trust, positive market sentiment, and the promising announcement of dividend disbursements by multiple-listed companies. This amalgamation of positive elements underscores the innate resilience of the GSE.

As we glance back at the market’s journey, we cannot overlook the hurdles posed by the economic headwinds of the previous year. The Composite Index (CI) and the Financial Stocks Index (FSI) bore the brunt of this, witnessing downturns of 12.8 percent and 4.61 percent respectively, a reflection of the adverse economic conditions.

However, the CI’s impressive year-to-date return of 21.8 percent and the signs of recovery in the banking sector attest to the market’s swift recuperative abilities. The GSE, like any responsive stock market, mirrors the ebbs and flows of the economy – demonstrating its inherent adaptability.

Deciphering the dynamics of trading activity

Amid the applause for the GSE’s market capitalisation milestone, the realm of trading activity has undergone shifts. The first half of this year witnessed a decline in both trading volume and value, sparking a need to dissect the reasons behind this trend.

Escalating interest rates have cast a shadow over equity investments as investors tread cautiously amid the evolving prospects of listed companies. The looming presence of the Domestic Debt Exchange Programme (DDEP) has cast uncertainty over listed companies’ financials, particularly in the banking sector, dampening investor involvement.

In response to the imperative of invigorating trading activity, the GSE has charted a strategic course. Collaborative efforts with business associations and umbrella bodies will pave the way for increased listings.

Moreover, the prospect of market-making initiatives holds the promise of infusing liquidity into the market. The introduction of novel products, such as the forthcoming Commercial Paper Market and an Over-the-Counter (OTC) Market, sets the stage for diversified investment opportunities. In tandem, elevated market education endeavours aim to empower investors with the insights they need to engage more actively.

GSE’s continuing evolution: embracing efficiency and sustainability

The ascending trajectory of the Composite Index and the overall market performance serve as beacons of encouragement for investors and participants alike. To enhance the market’s responsiveness to positive news, the GSE has taken proactive measures.

Timely dissemination of corporate information via the GSE’s Disclosure Portal, coupled with regular equities reports and stakeholder engagement, contributes to a well-informed investor community. Going forward, the cultivation of stronger relationships with stakeholders and the augmentation of digital platforms are poised to amplify the GSE’s transparency and real-time updates.

The GSE’s pursuit of sustainability remains a focal point in the financial sector. In an era where responsible and transparent business operations are of paramount importance, the GSE’s endeavours resonate deeply.

The introduction of Rules for Green, Gender, and Sustainability-themed Bonds, its inclusion in the UN Sustainable Stock Exchange Initiative, and the roll-out of the GSE ESG Disclosures Guidance Manual underline the GSE’s commitment. As stakeholders increasingly align with global sustainability trends, the GSE’s role in guiding businesses toward positive societal impact grows ever more crucial.

Peering ahead: innovations and demutualisation

Gazing into the future, the GSE’s vision crystallises into tangible initiatives. The imminent launch of the Commercial Paper Market anticipates a surge in short-term securities, enriching the market landscape without substantially impacting long-term corporate issuances. This development echoes the rapid ascent of Nigeria’s CP Market, portending a value-driven future for Ghana’s capital markets.

The GSE’s demutualisation process stands as a testament to its commitment to progress. With stakeholder engagement paving the way, the imminent announcement of the next steps signals the transformation of the operational landscape.

Anticipating the unveiling of future products

As we peer through the lens of time, the GSE’s horizon gleams with innovation and promise. The years ahead unveil an array of products and initiatives, including Securities Lending and Borrowing, Asset-backed Securities (ETFs), Margin Trading, Market Making, and Underwriting and Issuing House Rules. These are poised to diversify investment avenues, embolden investors, and invigorate the market’s vibrancy.

In summation, the Ghana Stock Exchange’s journey is an inspiring testament to resilience, adaptability, and forward-thinking. It is a reaffirmation of the potency of strategic innovation, sustained dedication to transparency and sustainability, and the unwavering determination to flourish despite market fluctuations. As the GSE continues its journey through volatility with its characteristic grace, we are reminded that in the world of financial markets, adaptability is indeed the currency of success.









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