GSE surges with 28.08% return in 2023

By Christabel Oboshie ANNAN & Zeenatu ABUBAKAR, Accra

The Ghana Stock Exchange (GSE), witnessed a remarkable turnaround in 2023, returning a staggering 28.08% for investors at the close of the year.

This impressive performance marked a stark contrast to the market’s negative return of 12.38% in the preceding year, signaling a robust recovery and instilling renewed optimism among market participants.

The stellar performance of the stock market was largely driven by the impressive earnings of listed companies, which bolstered investor confidence and contributed to the market’s upward trajectory.

This resurgence, as noted by the GSE, encompassed both the main market and the Ghana Alternative Market (GAX), underscoring the exchange’s resilience in the face of economic fluctuations.

Positive sentiment prevailed throughout the year, propelling the market capitalization to cross the historic GH₵70 billion mark, a significant milestone for Ghana’s financial sector.

In contrast to the stock market’s success, the Bond Market faced challenges, recording its worst-performing year since 2020, primarily due to the Debt Default Exchange Programme (DDEP).

Managing Director of the GSE, Abena Amoah, highlighted the pivotal role of the DDEP in shaping the financial landscape and serving as a benchmark for market performance.

According to her, the performance last year was anchored by the Domestic Debt Exchange Programme (DDEP), serving as a pivotal benchmark in the nation’s financial landscape.

This turnaround, she highlighted, contrasted starkly with the losses experienced in 2022, offering investors substantial returns on equities.

The Managing Director of GSE shed light on the recent performance of Ghana’s financial markets, citing government’s challenges in meeting bond interest payments and subsequent restructuring as a significant factor in diverting investor attention away from fixed income securities.

In her assessment, Amoah noted that the bond market’s performance witnessed a dip compared to the preceding year due to these developments.

She highlighted that the Financial Stocks Index experienced a notable decline of 7.36%, particularly in response to events surrounding the DDEP.

This situation resulted in losses for bond holders, primarily banks, prompting investors to retreat from banking stocks.

However, despite these challenges, the GSE MD emphasized the resilience of the equities market, which showcased buoyancy buoyed by renewed investor confidence. ‘

She pointed out that while there was a significant decline in volume and value trade, with a 50% decrease compared to the previous year, the overall index surged by an impressive 28%, demonstrating the market’s ability to rebound from adversity.

Looking ahead, Amoah highlighted that the equities market has maintained its upward trajectory into the current year.

Comparing data from February 2023 to February 2024, she stated that the composite index has risen by approximately 34%, indicating a positive trend in share prices.

This growth, she asserted, reflects investor confidence and optimism in the market’s potential.

Furthermore, she noted that market capitalization has seen a commendable increase of around 16% compared to the same period last year.

This steady growth underscores the market’s resilience and attractiveness to investors, despite the challenges faced in the bond market.

Despite the setbacks experienced in the fixed income sector, Amoah emphasized the resilience of the equities market, buoyed by renewed investor confidence.