GSE composite index loses more than 3%

The Bank of Ghana (BoG) in its current Monetary Policy Committee report for March, 2022, has disclosed that the Ghana Stock Exchange Composite Index (GSE-CI) lost more than 3 per cent in the first two months of the year 2022.

According to the Central Bank, taking into consideration data for the year 2021, the composite index made a gain of over 40 per cent to build on the loss made in the previous year.

However, it noted that the index started terribly this year compared to the previous year.

“On the capital market, the Ghana Stock Exchange Composite Index (GSE-CI) recorded a gain of 43.7 percent in 2021, relative to a loss of 14.0 percent in 2020. For the first two months of the year, [2022] the index has recorded a loss of 3.33 percent.”

BoG MPC Report

The Central Bank, meanwhile, explained some factors that are responsible for the Ghana Stock Exchange Composite Index making losses in the first two months of the year-January to February.

The Central Bank observed that the imposition of tax on the listed securities on the local bourse and many other factors pushed investors to move to other investment platforms which adversely affected the GSE.

“The year-to-date loss has been driven by a variety of factors to include the re-imposition of capital gains tax on securities listed on the GSE which is inducing some investors to switch to Government securities. Other factors include selling pressures, poor performance of some companies, relatively higher yields on fixed income securities, uncertainty induced by inflation and exchange rate pressures, as well as portfolio reversals” part of the report reads.

Current Composite Index

The Benchmark Composite Index in March has marginally recovered some of the losses suffered in the first two months of the year.

As at Monday, Mach 21, 2022, the performance of GSE market indices advanced marginally by 0.02 per cent. The benchmark GSE Composite Index (GSE-CI) inched up by 0.60 points to close at 2,739.23 points.

Nonetheless, this represents a week on week loss of 0.55 per cent and a month on month gain of 1.71 per cent, but an overall year-to-date loss of 1.8 per cent.

On the other hand, the GSE Financial Stocks Index (GSE-FSI) also increased by 0.05 per cent to reach 2,168.38 points, also cumulating to a week on week gain of 0.63 per cent and a month on month gain of 2.63 per cent.

Unlike the composite index which made a loss in year to date, the financial sector stocks index made a year-to-date gain of 0.77 per cent.

This was driven mainly by the expansion in the financial sector stocks which include banking stocks and insurance. Some of the biggest gainers in the financial sector this year include: SIC Insurance Company PLC, GCB Bank PLC, Ecobank Transnational Incorporated, Cal Bank, and others.

Many Experts are of the opinion that, given the myriad of factors responsible for the slow start of the GSE in the new year, it will be difficult for the Exchange to bounce back, though some experts indicated that the GSE will recover some of the early losses along the way.