Food and consumable sector stocks performance on the Ghana Stock Exchange were significantly poor for the first half of 2020 compared with their performance in the same period in 2019.
All the three food and consumable sector stocks on the local bourse– Guinness Ghana Breweries, Unilever Ghana and Fan Milk –as of June 2020, had declined in their valuation by 28.9, 14.7 and 56.3 percent respectively.
Over the same period last year, that is January to June of 2019, Guinness Ghana Breweries witnessed no decline, while Unilever Ghana and Fan Milk declined in their valuation by 0.7 and 37.5 percent respectively.
The poor valuation of the food and consumable sector stocks has been attributed to poor financial and operational performance.
Alex Boahen, Head of Research at Databank speaking to Citi Business News said: “The decline in the share prices for the consumer sector stocks on the stock exchange for the first half of this year is largely attributable to the week operating and financial performance of the underlying companies. For example, Unilever reported a net loss of GHS16.8 million in the first half of this year as against a profit of about GHS17 million last year. There’s a similar case for Fan Milk and GGBL who have a major improvement in recent times.”
Mr. Boahen however was optimistic of a resurgence in the performance of the food and consumable sector companies as COVID-19 restrictions continue to be eased.
“We are likely to witness some slow recovery as government eases restrictions further. Fan Milk for example depends largely on outdoor sales hence the lack of movement that hit major regions as a result of COVID-19 induced restrictions really affected them. But that should change slowly as things get back to normal,” he noted.
GSE Performance (January to August)
The Ghana Stock Exchange Composite index (GSE-CI) which reflects the average performance of shares of listed companies witnessed a significant drop of about 18 percent from January to August 21 of 2020.
Meanwhile, the composite witnessed a drop of about 11 percent within the same period in 2019.