The stock market’s bearish performance may not witness any significant turnaround for the remainder of this year considering the seeming low investor confidence in the financial sector.
That is the comment from the Group CEO of Databank, Kojo Addae-Mensah.
The Ghana Stock Exchange witnessed a negative 0.29 percent growth last year.
This is an unfavourable performance compared to the growth recorded in the preceding year.
For the first half of 2019, spanning January to June, the market is still not seeing any significant improvement as its growth is estimated at negative ten percent.
A development, Kojo Addae-Mensah, CEO of Databank Group attributes to an array of factors.
“Investor sentiments seem to be feeding into the lack of activity. People are still not confident about the whole financial industry. In addition, because the bonds market is looking quite lucrative, you find out that foreign participation is drifting towards that market. Also, the Fed increased its rate sometime back so you could see the foreign investors selling off in the emerging and frontier markets to go and take advantage of the rate hikes back in the US,” he asserted.
For the same year under review, the Financial Stock Index which measures the performance of financial companies that are listed on the Ghana Stock Exchange recorded a negative 6.79 percent compared to the 49.5 percent recorded in the preceding year.
Meanwhile, the volume of shares traded in 2018 reached 201 million shares valued at 659 million cedis compared to the volume and value of 322 million shares worth 518 million cedis respectively recorded in 2017.
Despite the under performance of the local bourse, Mr. Addae Mensah explains that the development should however present an opportunity for potential investors to patronize shares on the stock market.
“As we speak now, the local bourse’s performance is estimated at negative ten percent which is not looking very good. We had expected it to have performed much better on the back of the fact that the banking industry had finished its recapitalisation and so now had stronger balance sheets hence performance would be good. If you look at the stocks fundamentally, they are looking good, this is the time for people to buy,” he intimated.
For 2018, Databank’s mutual funds recorded appreciable returns for investors and the company’s CEO is hopeful of sustaining the situation by the end of this year.