Investors on the Ghana Stock Exchange (GSE) should expect good returns this year if the current financial performance of majority of the listed companies should continue.
A report by Bloomberg sighted by Citi Business News has pegged the Ghana Stock Exchange as growing by 33 percent, making it the best world performing stock exchange so far in 2018.
The performance according to Bloomberg is due to government decision to transfer 690 million dollars in December to private pension funds.
Explaining the benefits to investors, Investment Banker, Mahama Iddrisu pointed out that the performance demonstrates a vote of confidence in the private sector.
“For the stock market to perform up to 34 percent, this tells us that the stock market will be good this year,” he said.
Mr. Iddrissu was of the view that a number of factors may have contributed to the good performance in just a month.
“The performance may be due to the economic fundamentals, and also it could be because the pension funds are allowed to invest, or probably the investment environment in Ghana is encouraging investors. It could also be the cyclical form that the market goes through where prices go up at a certain time and come down at particular period,” he stated.
He maintained that all factors point to a general confidence on the part of investors who see the period as being productive for the private sector.
He was of the view that the trend may continue for a while depending on signals sent by government in partnering the private sector to expand their operations.
According to Bloomberg, a flood of money from private pension funds drove the 33 percent surge in Ghana’s benchmark stock index this year, making the GSE the world’s best-performing equities.
“The government in December transferred 3.1 billion cedis ($690 million) to the funds, money the state had held since 2012 while the industry put structures in place for new entrants. Seven months earlier, Ghana doubled the proportion of assets that pension funds can invest in stocks to 20 percent,” it said.
By: Lawrence Segbefia/citibusinessnews.com/Ghana