The Ghana Stock Market has in recent years recorded negative returns to investors. In 2015, the Ghana Stock Exchange Market recorded a negative return of -11.77%. It also recorded -15.33%, -0.29%, and -12.25 in 2016, 2018 and 2019 respectively.
However, in 2017, GSE recorded a positive when the market gained 52.73%. In 2020, (GSE) returned -16.99% in dollar terms to investors mainly due to the economic shock wave it experienced from the impact of the coronavirus pandemic as well as the financial sector crisis. During periods of such uncertainty, investors including foreigners who are active players on Ghana Stock Exchange are mindful of their investments in the equity market and as such shifts their investment into such assets as gold and other minerals or safe assets. Below is an analysis of GSE’s performance in 2020.
GSE performance in 2020 and the financial sector crises
As the GSE recorded a positive return in 2017 it was expected to translate into 2018. Though the first half of 2018 was largely favourable for investors due to a recorded year high of 35.62%, the announcement by the Bank of Ghana in August 2018 to consolidate Unibank Ghana Ltd, The Royal Bank Ltd, Beige Bank Ltd, Sovereign Bank Ltd, and Construction Bank Ltd to form a united bank called Consolidated Bank Ltd troubled the waters of the stock market.
The incidence was coupled with the clampdown of Menzgold thus creating the issue of liquidity in the financial system.
Within the period, however, some individual stocks such as Societe General, GOIL, CAL Bank and TOTAL recorded year highs of 65.83%, 45%, 44.67% and 41.17% respectively.
GSE performance in 2020
Despite the -16.99% recorded in 2020, it was an improvement from the -20% return in the eight months of 2020.
As economies started to open up and business confidence boosted after a stale economic and financial growth, investor appetite also rebounded. The Accra Bourse witnessed an improvement in its stock performance in the last three months to the end of 2020.
According to the weekly stock market, prior to the end of the year 2020, Standard Chartered Bank, Ecobank Ghana and GCB Bank pushed up the level of the GSE-Composite Index to close the year with a year-to-date loss of -13.98% in cedi term. This was far better than in the nine months of last year.
This translated to a boost in market capitalization to end the year at GH¢54.4 billion, as against around GH¢56 billion at the beginning of the year.