The Ghana Stock Exchange (GSE) exhibited steady performance during the week ending November 22, 2024, highlighted by gains in the GSE Composite Index (GSE-CI). The GSE-CI, which tracks the performance of all listed companies, closed at 4,665.35 points, marking a weekly increase of 10.66 points from the previous session’s 4,654.69 points. This reflects a year-to-date change of 49.04%, indicating substantial growth in the market over the year.
In contrast, the GSE Financial Stock Index (GSE-FSI), which focuses on financial sector stocks, remained unchanged at 2,325.64 points. Despite this stability, the index has shown a year-to-date increase of 22.30%, reflecting consistent performance in the financial sector.
Trading volumes experienced notable fluctuations throughout the week. A total of 87,834 shares were traded on Friday, November 22, a decline from the previous day’s 164,397 shares. The highest trading volume for the week was recorded on Monday, November 18, with 427,667 shares changing hands.
Market capitalization, representing the total market value of all listed companies, ended the week at GH¢104,498.82 million, indicating growing investor confidence and aligning with the overall market growth observed in recent months.
Understanding Key Terms:
- GSE Composite Index (GSE-CI): A benchmark index that measures the performance of all companies listed on the Ghana Stock Exchange.
- GSE Financial Stock Index (GSE-FSI): An index that tracks the performance of financial sector stocks on the GSE.
- Market Capitalization: The total market value of a company’s outstanding shares, calculated by multiplying the current share price by the total number of outstanding shares.
- Trading Volume: The number of shares traded during a specific period, indicating the activity level of a particular stock or the market as a whole.
Economic Indicators and Recent Developments
Ghana’s economic outlook continues to evolve, driven by key developments:
- Inflation Rate: As of October 2024, Ghana’s inflation rate rose to 22.1%, up from 21.5% in September. This slight increase reflects continued price pressures in the economy.
- Interest Rate: The Bank of Ghana’s policy rate currently stands at 27%, following a 200 basis points cut in September 2024. However, the upcoming Monetary Policy Committee (MPC) meeting is expected to address interest rate dynamics. Market watchers are keen to see whether the central bank will maintain, increase, or further reduce the rate in light of recent economic trends.
- Exchange Rate: The Bank of Ghana reported the interbank exchange rate for the US dollar at GH¢15.8000 as of November 22, 2024, reflecting slight stability in the foreign exchange market.
- IMF Programme Update: Ghana recently passed the third review of its $3 billion Extended Credit Facility programme with the IMF, unlocking a $360 million tranche expected to be disbursed in December. The IMF praised Ghana’s significant progress in economic growth, inflation control, debt restructuring, and fiscal consolidation. However, it stressed the need for sustained reforms to ensure long-term macroeconomic stability and avoid a relapse into economic difficulties.
Outlook and Expectations
The upcoming Monetary Policy Committee (MPC) meeting will be a focal point for the market, with discussions on interest rates likely to influence the broader economic trajectory. Investors and analysts are watching closely to determine how the central bank balances inflation management with economic growth.
Furthermore, with Ghana approaching its general elections in December, economic policies and political developments are expected to play a crucial role in shaping investor sentiment. The IMF’s continued support, coupled with Ghana’s efforts in local content development and fiscal discipline, could provide a solid foundation for economic recovery.
