Some Stock Market analysts are hopeful market activity on the Ghana Stock Exchange will pick up by May after a sluggish start to the year.
UMB Stockbroker Kofi Busia Kyei is optimistic companies will be paying dividends to their shareholders around the middle of the second quarter of this year (among other happenings) which should see the market rebounding.
The recent banking sector crises and subsequent reforms have led to the collapse of a number of banks and the strengthening of some others.
The crisis is believed to have had a ripple effect in areas outside of the banking sector, going as far as contributing to the poor performance of the Ghana Stock Exchange in the last part of 2018, and is thought by many as still contributing to the sluggish performance of the bourse in the first two months of 2019.
However, UMB Stockbroker Kofi Busia Kyei told Citi Business News the trend was expected to happen.
“UMB Stockbrokers, we’re on record as predicting that the first quarter will be difficult. So this trend is expected. Currently though the economic fundamentals are looking good apart from the situation with the forex. The released financials from institutions like MTN, Ecobank and Standard Chartered Bank all look good. Based on these indicators, we expect the market to rebound,” he said.
A total of GHc 2 billion was raised on the Ghana Stock Exchange (GSE) in 2018 through new share issues.
This is as against the 2017 financial year when no capital was raised on the local bourse.
The amount was raised through two Initial Public Offers which raised a total of GHc1.15 billion – nearly all of which resulted from the IPO done by MTN Ghana– and the floating of additional shares from nine other already listed companies.
The nine companies, which included Access Bank, Societe Generale, Republic Bank, and Standard Chartered Bank, raised a total amount of GHc 906 million.
Touching on the expectations in the coming months, Kofi Busia Kyei maintained that once the banking sector issues are resolved, the market should rebound.
“I think the market will need some more time. We’re expecting that once the banking issues are fully resolved then the market will rebound.”
He added that he expects the paying of dividends by companies in April and May to stimulate market activities on the local bourse. “Looking at what is happening maybe we should give the market up to the middle of the second quarter. That is when we would start seeing dividends on the market. So once the companies starts paying dividends, then it will impact on the performance of the stock market.”