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Cedi, banking sector clean-up impacted negatively on Ghana Stock Exchange’s performance in 2018

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The domestic currency lost 8.39 percent of its value to the United States dollar in 2018, while the banking sector clean-up which required universal banks to raise fresh capital of GH¢400million led to the collapse of seven indigenous lenders. 

Another contribution to the GSE negative performance was an increase in the rate of 91-day Treasury bill to 14.59 percent.

The GSE Composite Index ended 2018 with a negative 0.29 percent compared to the previous year’s 52.73 percent.

Just like its Composite Index, the GSE Financial Stock Index also recorded a negative 6.79 percent return in 2018 compared to the positive 49.51 percent registered the year before.

The GSE Managing Director, Kofi S. Yamoah who spoke at the 2018 Annual General Meeting of the GSE in Accra said, “There were a number of micro-economic challenges that added to global difficulties. Interest rates on the 91-day Treasury bill inched up from 13.35 percent at the end of 2017 to 14.59 percent at the end of 2018, and the cedi lost 8.39 percent against a strong US dollar compared to a loss of 4.87 percent in 2017.”

He added that “There was also the distraction or focus of attention on the banking sector clean-up and recapitalisation, as well as the results posted by listed issuers.” 

But the managers of the Ghana Stock Exchange (GSE) have assured that despite the negative impact, investors on the GSE should expect a marginal increase on returns for 2019.

According to the Board Chair of the GSE, Mr Albert Essien, far-reaching initiatives are being taken to improve the performance, relative to 2018.

“The initiatives include preparation and adoption of a new strategic plan, irreversible steps towards the demutualization of the GSE, and plans to acquire a market surveillance system,” he said.