By Dela AGBO
When discussing the best-performing stock exchanges in Africa, the Ghana Stock Exchange (GSE) consistently stands out.
Despite its relatively small size, with only about 35 listed stocks, the GSE offers unique investment opportunities for both local and international investors. Below are some of the reasons why you should consider investing in the GSE now.
Consistent Performance and Resilience
The GSE has proven itself as one of the most resilient and well-performing stock exchanges in Africa. Over the years, the exchange has delivered notable returns, often outperforming larger African exchanges. This consistency is fueled by Ghana’s stable political environment, growing economy, and a robust regulatory framework that ensures investor confidence.
A Market with Growth Potential
With just around 35 stocks listed and only about 15 to 20 actively traded weekly, the GSE is a compact market with significant room for growth. Companies like MTN Ghana (Scancom PLC), Ecobank Ghana, and TotalEnergies Ghana dominate the market in terms of activity and liquidity, providing a solid foundation for new and emerging companies to enter the exchange. This combination of established players and potential for new entrants creates a fertile ground for investors looking to diversify their investment portfolios.
Attractive Valuations
The GSE boasts relatively low stock valuations compared to other African markets, making it an attractive destination for value investors. For instance, stocks like CAL Bank PLC and Ghana Oil Company PLC consistently trade at affordable prices, offering substantial upside potential for long-term investors.
Opportunities in Underrepresented Sectors
The GSE provides opportunities to invest in sectors often underrepresented in larger exchanges. From agriculture (Benso Palm Plantation PLC) to telecommunications (MTN Ghana) and financial services (Ecobank Ghana and Access Bank Ghana), the GSE offers a diverse portfolio for investors seeking exposure to Ghana’s key economic drivers for solid positive investment returns.
Steady Dividend Yields
Many listed companies on the GSE, including MTN, Standard Chartered Bank Ghana and GCB Bank, have a history of paying consistent dividends. For income-focused investors, the GSE provides an opportunity to earn steady returns while benefiting from potential capital appreciation.
Transparency and Regulation
The GSE is governed by the Securities and Exchange Commission (SEC) of Ghana, ensuring a transparent and fair trading environment. With strict regulations in place, the exchange promotes investor confidence, which is critical for both retail and institutional investors across board. Strong investor confidence is the backbone for positive economic growth hence the importance of the SEC as the regulator.
Key Players Driving Liquidity
Despite its size, the GSE is supported by highly liquid stocks such as:
- MTN Ghana (Scancom PLC): A dominant player in telecommunications, providing strong growth prospects.
- TotalEnergies Ghana: A key player in energy, leveraging Ghana’s growing energy demand.
- Ecobank Ghana and Access Bank Ghana: Financial giants driving liquidity in the banking sector.
A Gateway to West Africa
Investing in the GSE is not just about Ghana; it’s a gateway to West Africa. Many listed companies have operations across the sub-region, giving investors exposure to broader markets beyond Ghana.
Strong Local and International Demand
Recently, MTN Ghana localized more shares at a discounted price of GHS 1.94, compared to the market price of GHS 2.20. This reflects the strong demand from both local and international investors who see the potential of the GSE.
Conclusion: A Market Worth Exploring
The Ghana Stock Exchange is more than just a market for trading stocks—it is a reflection of Ghana’s economic aspirations and a testament to its financial resilience. With its strong performance, growth potential, and diverse opportunities, the GSE is a compelling choice for investors seeking high returns in an emerging market.
When one invest in the GSE, you’re not only diversifying your portfolio but also contributing to the growth of Ghana’s economy. As at February 3rd, 2025, The Benchmark Index dropped by 1.91 points (-0.04%) to close the session at 5,227.53 with a year-to-date return of 6.93% while the market capitalization decreased by 0.02% to settle at GH¢117.15 billion. The time to invest in the Ghana Stock Exchange is now—don’t miss out on this hidden gem in African markets.
