Weak economy affects profitability of local bourse
The profit margin of the Ghana Stock Exchange (GSE), declined sharply from GH¢4.18m recorded in 2014 to GH¢2.55m in 2015.
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The Chairman of the Board of Directors of GSE, Dr Sam Mensah, announced this at the 26th annual general meeting (AGM) in Accra last Thursday.
According to Dr Mensah, the GSE Composite Index, which measured the performance of the entire market, made a negative return of 11.77 per cent compared to the marginal gain of 5.4 per cent recorded in 2014.
As a result, he indicated, that the listed companies on the capital market bore the negative impact of the energy crisis and the continuous depreciation of the cedis against major currencies in 2015.
Dr Mensah stated that the volume of shares traded for the year ending 2015 stood at 240m, valued at GH¢247m compared to the volume and value of 207m and GH¢346m respectively recorded in 2014.
He, however, indicated that the market turnover in 2015 was lower than that of the previous year.
“The market capitalisation for all listed securities at the end of December 2015 was GH¢57.1b compared to the GH¢64.4b in 2014, representing a decrease of 11 per cent,” he said.
With regard to the domestic market capitalisation, the GSE recorded a 19 per cent decrease, with the 2014 figure standing at GH¢13.9b, as against the GH¢11.2b figure for 2014.
Causes of market decline
Dr Mensah blamed the dwindling in profits on the harsh economic conditions, which included erratic power supply, high inflation rate and high interest rates.
The Managing Director, Mr Kofi S. Yamoah, also stated that nearly all of the market’s indicators either recorded low margins or were in negative territories.
On the main equity board of the market, Mr Yamoah said there was no new or original listing during the year under review, except that there were, however, additional listings by Societe General Ghana, Ecobank Transnational Incorporated, Mega African Capital and AngloGold Ashanti Limited.
Ghana Alternative Market (GAX)
For the Ghana Alternative Market (GAX), he said, there were four equities issued on the primary market; Samba Foods Limited, Meridian Marshals Company Limited, Hords Limited and Intravenous Infusions Limited.
“Thus, at the end of December 2015, there were 39 equities, one preference share and one exchange traded fund listed on the exchange,” he said.
At the end of December 2015, Mr Yamoah said the listed debts securities were 15 corporate notes and bonds worth GH¢107.37m, including 151 Government of Ghana notes and bonds worth GH¢11.77b and two secondary-listed Eurobonds worth $2b.
He added that the introduction of the “Facts Behind Figures” programme had been helpful for companies and institutions as that had given them the platform to easily interact with their customers and shareholders.
He, thus, implored all companies to take advantage of the platform to promote their businesses.