The Ghana Stock Exchange (GSE) is expected to leverage the positive improvements in the macroeconomic environment to recover from its sluggish performance in 2016.

The GSE has recorded a rather slow performance in the last few years but envisages some profitability this year as the indicators in the macro- economy continue to improve.

The Managing Director (MD) of the GSE, Mr Kofi Yamoah, told journalists after the annual general meeting of the GSE on July 6 that “we are seeing improvement in the macroeconomic environment, inflation is trending downwards, interest rates have gone downwards, and the currency is also relatively stable”.

“We count on the fact that the environment would continue to improve this way and on the basis of that we expect much more improvement as far as the secondary market activity is concerned,” he said.

Market performance

The acting Chairman of the Ghana Stock Exchange (GSE) Council, Mr Albert Essien, said the exchange continued to feel the impact of the difficult conditions of the economy in 2016.

The GSE Composite Index which measures the performance of the entire market continued its downward trend ending 2016 with a negative 15.33 per cent similar to the negative 11.77 per cent recorded in 2015 mainly on the back of subdued performance by listed banks.

Market turnover in 2016 recorded some improvement in volume but values recorded were lower than those of the previous year.
The volume of shares traded for the year stood at 253 million shares valued at GH¢247 million.

Market capitalisation for all listed securities at the end of December 2016 was GH¢52.7billion compared to GH¢57.1billion in 2015, representing a decrease of 7.75 per cent. Domestic market capitalisation also fell by 2.75 per cent ending December 2016 at GH¢10.9 billion compared to GH¢11.2 billion at the end of December 2015.

He said in spite of the economic and market conditions, the exchange managed to improve its performance and recorded a surplus of GH¢5.38 million in 2016 compared to GH¢2.55 million in 2015.

Listings

Mr Yamoah said on the listing front the exchange had not made much headway, but was expecting a number of companies to formalise their processes in due course of time.

“The only unfortunate aspect is that the Securities and Exchange Commission (SEC) doesn’t have its full complement of commissioners in place, and we hope that would also come in later so we can have the full complement for the second half of 2017,” he said.
On encouraging listings on the market, Mr Yamoah said there was the need for more companies in various sectors of the economy to take part in trading on the market to give the GSE a great and wider sectorial representation of economic activities as far as the exchange was concerned.

“We don’t have telecommunication companies on the market, we have only two insurance companies and about seven banks. We want the market to improve so that when you talk about the exchange it becomes a much broader representation of economic activities in the country,” he said.

There were two new listings on the exchange in 2016, namely Agricultural Development Bank Limited and Access Bank Ghana Plc. The two together raised a total of GH¢355 million.

There were three additional listings by way of Rights Issue by Ghana Oil Company Ltd, Guinness Ghana Breweries Limited and Societe Generale Ghana Ltd, who in total raised GH¢395 million.