GSE Records Decline In Volume Despite Market Gains

At the end of the trading session on the Ghana Stock Exchange (GSE) last week Wednesday, December 18, the market recorded notable shifts in volume and turnover.

A total of 2,293,605 shares were traded, representing a market value of GHS 13,176,377.57. However, these figures reflected significant declines compared to the previous trading day, as trading volume dropped by 68% while turnover fell by 39%.

Despite these declines, the trading session showcased positive movements in market indices and stock performance, leaving investors with a mixed bag of results.

Highlights

The trading day saw 19 equities actively participating on the GSE. Out of these, two stocks emerged as gainers while none recorded losses. The two gainers, NewGold ETF and TotalEnergies Marketing Ghana, demonstrated resilience in an otherwise subdued session.

NewGold ETF closed at GHS 392.08 per share, gaining GHS 4.68 (1.21%) over its previous closing price of GHS 387.40. TotalEnergies Marketing Ghana followed closely, closing at GHS 13.07 per share, a GHS 0.15 (1.16%) increase from its previous closing price of GHS 12.92.

MTN Ghana led the market in trading volume, with 2.13 million shares changing hands. Other actively traded stocks included SIC Insurance Company (134,668 shares), NewGold ETF (20,130 shares), and CalBank (3,310 shares).

Positive Movement

The GSE Composite Index (GSE-CI), a key benchmark for market performance, inched up by 1.36 points, or 0.03%, to close at 4,809.63. This marginal increase contributed to a 1-week gain of 2.16%, a 4-week gain of 3.35%, and an impressive year-to-date gain of 53.65%.

Meanwhile, the GSE Financial Stocks Index (GSE-FSI) remained unchanged at 2,370.11 points. This index has recorded a 4-week gain of 1.97% and a year-to-date gain of 24.64%, signaling stability in the financial sector.

The current market capitalization of the GSE stands at GHS 110.1 billion, underscoring the robustness of the stock market despite periodic fluctuations. The sustained gains in the Composite Index highlight the resilience of the market, even in the face of reduced trading activity.

Key Insights

The sharp declines in trading volume and turnover reflect changing investor sentiments, possibly influenced by broader economic factors or profit-taking strategies. However, the gains in key indices and select stocks provide a glimmer of optimism.

NewGold ETF’s performance underscores the appeal of commodity-backed investments in times of market uncertainty. As a gold-backed instrument, it remains a reliable hedge against inflation and currency volatility.

Similarly, TotalEnergies’ steady gains reflect investor confidence in the energy sector, driven by its strategic market positioning and consistent performance.

MTN Ghana’s dominance in trading volume reaffirms its status as a market leader and a favorite among retail and institutional investors. Its high liquidity and consistent dividend payments make it an attractive choice for long-term investment portfolios.

As the GSE approaches the end of the year, the market’s performance continues to be driven by a mix of global and domestic factors. The robust year-to-date gains in the Composite Index signal a strong recovery from previous downturns, with investor confidence gradually improving.

However, the declines in daily trading activity may prompt caution among market participants. For sustained growth, the GSE will need to attract more participation from institutional investors and enhance its product offerings to deepen market liquidity.

With a market capitalization of GHS 110.1 billion and impressive year-to-date performance, the GSE remains a vital driver of Ghana’s economic growth. As investors navigate the complexities of the market, the focus will likely shift toward stability, diversification, and long-term value creation.