GSE delivers 20th positive year

African Securities Exchanges Association
Ms. Abena Amaoh, GSE-MD
  • Outpaces inflation with 28% Return
  • non-Financials lead rally
  • IPOs, lower rates and recovering banks key drivers for 2024

The Ghana Stock Exchange (GSE) closed 2023 with its 20th positive return in its 33-year history, as the GSE Composite Index (GSE-CI) returned 28.08 percent to investors for the period – with analysts saying it consistently points to the asset class’s viability versus alternatives.

This saw the market capitalisation rise beyond the GH¢70billion mark for the first time to GH¢73.89billion, a 14.55 percent growth over the previous year.

The 28.08 percent gain, equivalent to an increase of 3,130.23 points compared to the 2,443.91 points in 2022, marks a substantial turnaround from the negative 12.38 loss experienced in the previous year.

However, it is noteworthy that this positive performance was only the fourth occurrence of a favourable return on the Accra bourse in the past decade; a period marked by challenges such as a power crisis, financial sector clean-up and the Domestic Debt Exchange Programme (DDEP).

Unsurprisingly, the rally was spurred on by non-financial stocks – with agriculture (Benso Oil/BOPP), distribution (Total), manufacturing (Unilever), food and beverages (Guinness/GGBL) and information and communication technology (MTN) leading the way.

These stocks returned 187.58 percent, 127 percent, 109.02 percent, 65.85 percent and 59.09 percent respectively during the period under consideration.

The Financial Stock Index (GSE-FSI) recorded a year-to-date loss of 7.36 percent, as investor sentiments over the DDEP’s impact and the consequent Bank of Ghana directive for the suspension of dividend payments took a toll.

At an average of 26 percent, the 91-day Treasury bill rates were surpassed by stocks as an investment even before factoring-in the impact of dividends, which effectively made the actual stock returns exceed 28 percent.

Moreover, considering November 2023’s inflation rate of 26.4 percent and anticipated decrease in the figures released this week for last December, stocks are poised to yield a positive real return. Additionally, the cedi depreciated by 26 percent against the US dollar throughout the year; reinforcing the notion that stocks emerged as the superior investment option for 2023.

Due to the bond market’s reduced activity, pension funds raised their involvement in the stock market: accounting for 17 percent – GH¢196.3million – of traded value in the stock market for the initial 10 months of 2023, a significant increase from six percent in the corresponding period of 2022.


Analysts are anticipating a positive market outlook for the upcoming year, despite challenges posed by the upcoming elections – historically marked by investor apathy. This optimism suggests a potential consecutive positive return for the market, a phenomenon not witnessed since 2013/2014.

In a recent X Space discussion titled ‘Starting your year right: Ghana stock market performance’, key industry experts shared insights. Desmond Bredu, Head-Client Coverage, Stanbic Investment Management Services (SIMS); Patrick Edem Agama, Head-Trading & Business Development, Republic Securities – and a Financial Analyst and operator of the Ceditalk blog, deliberated on factors influencing this outlook.

Foremost among these factors is the projected slowdown in secondary bond market activity and a corresponding decrease in Treasury bill rates, aligning with a decline in inflation. November 2023 saw a substantial drop in inflation rates from 35.2 percent (October 2023) and 54.1 percent (December 2022) to 26.4 percent.

In March 2023 government had already, rejected all bids at the Treasury bill auction in a bid to force interest rates down – which ranged from 24 percent to 27.5 percent for the 91-day through 364-day Treasury bills – in a bid to lower the cost of borrowing. This was briefly successful, as the rates declined to between 19 percent and 26 percent. Analysts believe that despite elevated concerns over the broad economy, the money market rates will moderate throughout 2024.

There is also an expectation of fresh Initial Public Offerings (IPOs), the first since 2018 – especially from state-owned enterprises (SOEs) as well as some on the small business-focused, secondary board…the Ghana Alternative Market (GAX).

They were also optimistic that financial stocks will see some recovery following their performance in 2023. This is expected to be bolstered by whispers that banks are seeking to persuade the central bank to rescind its dividend directive on the basis of their 2023 performance.

“We expect this domineering theme to continue for telcos (MTNGH), with a handful of banks posting attractive returns. Consumer stocks are our wildcards for 2024, as inflationary pressures ease amid ongoing stringent cost controls from these companies,” IC Securities, a market watcher, added in its commentary.

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