Stock Market Stands Strong Despite Banking Sector Challenges

The Ghana Stock Exchange (GSE) on the second week of August trading opened with ten equities experiencing activities in their shares with only one price change; the GSE-Composite Index thus edged by 0.03 per cent to close at 2,936.7 points.

The CAL Bank rose by 0.8 per cent to close at GHC1.27 per share, to emerge as the only gainer for the session. Volume traded was 38,136 shares, which were valued at GHC79,151.50.

Meanwhile Nordea Capital Investment Stock Market review of the first week of August available to the Ghana News Agency indicated that activities turned slightly bullish as investors focused on bottom picking and ignored news of challenges in the banking sector to push the benchmark index northwards.

The GSE-Composite Index thus closed the period 0.1 per cent better than the previous week.

Nordea Capital Stock Expert predicts that market sentiments are likely to dip once again on account of weaker than anticipated impairment losses.

Nordea Capital therefore advised investors to refocus on fundamentals to stoke selling pressures amid the turbulent macro environment.

The week under review saw the Banking sector leading the pack as demand continued to build up for GCB Bank and Ecobank Ghana shares, with each gaining 0.6 per cent and 0.5 per cent respectively.

However, the top performer for the week under review was Ecobank Transnational Incorporated, which rose 4.8 per cent on a week-on-week basis to close at GHC0.22 per share.

Nordea Capital explained that these upward movements are more fundamentally driven and in line with expectations. The banks produced strong half year of 2018 earnings despite the headwinds in the sector.

The Enterprise Group Limited experienced some margin compressions, arising out of competitive pricing, which could have an impact on the bottom line.

Total Petroleum Ghana Limited edged by 1.5 per cent to close at GHC4.16 per share largely on account of bottom picking by investors; and Produce Buying Company led the losers for the week, losing by 25 per cent to close at GHC0.03 per share.

The SIC Insurance dropped by 14.3 per cent to close at GHC0.30 per share but it has increased its gross premium by 1.1 per cent to GHC161.9 million for 2017, which translated into a Payment After Tax (PAT) of GHC23.5 million for year ending 2017, up from GHC11.9 million 2016.

Societe Generale also dipped by 2.4 per cent to close at GHC1.22 per share despite impressive half year 2018 results, whilst GOIL also slipped by 1.0 per cent to close at GHC3.95 per share, Guinness Ghana Brewery Limited went down by 0.8 per cent to GHC2.50 per share and Benso Oil Palm Plantation shed 0.1 per cent to close at GHC7.24 per share.

According to the Nordea Capital Stock Market review, both liquidity and turnover trails the previous week’s numbers.
Total Petroleum Ghana Limited shares traded trailed behind the previous week’s performance, as it declined by 24.2 per cent while turnover, however, also dipped by 34 per cent.

The Enterprise Group Limited emerged as the most traded equity in value terms as it accounted for 47.6 per cent of turnover during the week.

The Nordea Income Growth Fund was priced at GHC0.4290 with a year-to-date return of 6.14 per cent. Yields on treasury securities were mixed as the 91 day bill remained unchanged at 13.31 per cent but the 182 day bill however dipped from 13.83 per cent to 13.82 per cent.