Banking sector clean-up restores confidence on local bourse, Ghana Stock Exchange confirms

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According to the Deputy Managing Director of the Ghana Stock Exchange, Ekow Afedzie, this is due to a regained confidence in the banking sector after the Bank of Ghana (BoG) completed its clean up.

Mr Afedzie said that the market will be doing a more aggressive campaign to boost listing and maintain confidence in the market.

“One thing that we need to understand is that markets are impacted by many factors being it positive or negative and one thing is about how the economy is going.”

“On the economic front, things are stabilizing inflation is dropping, GDP is projected to grow higher and all that but there are other factors. People invest for returns and it’s important that people have confidence in the market and put in their money. We’re beginning to see some returns and movement in the indices increasing as a result of coming back of confidence in the banking sector due to the clean-up exercise,” he added.

In the first two months of 2019, the GSE continued to record the same bearish performance that it suffered from 2018.

The two market indices, the GSE Composite Index (GSE-CI) which measures the weighted average price changes of all the equities listed on the market; and the GSE Financial Stock Index (GSE-FSI), which tracks the weighted average price changes of financial services equities have recorded continuous downward movements since the start of this year.

This was despite the optimistic forecasts by many equity analysts at the start of the year.

The depreciation of the cedi and the rising interest rates on benchmark government treasuries which have favoured fixed-income investments over equities have largely been blamed for this.

Mr Afedzie was optimistic the confidence will be maintained since GSE is planning to improve upon its campaign for companies to list on the local bourse.

“Moving forward we need to try to get more companies to come on the market and trade. We’re enhancing our campaign with potential firms to get them listed on the market at the same time educating investors on how to handle their investments on the capital market,” he said.

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