GSE to sustain bullish performance this year

The Ghana Stock Exchange (GSE) recorded a bullish performance last year, emerging as the best stock exchange in Africa, an exploit industry experts are optimistic will continue this year.

Ghana’s stock index led Africa with 56.17 per cent return, the highest since 2013. This was bolstered by a $3-billion International Monetary Fund (IMF) bailout and an average Gross Domestic Product (GDP) growth of 6.3 per cent over the year.

Going into 2025, investors anticipate further gains under President John Dramani Mahama’s administration, which has prioritised economic stability and fiscal consolidation. With this backdrop, analysts forecast a 45 per cent gain in 2025, underpinned by an improving economy and strengthening cedi currency.

The exchange’s composite index (CI) rose from 3,130.23 points to 4,888.53 points, marking its strongest performance in 11 years – since 2013’s 78.8 per cent return.

Also, the GSE-CI recorded a stellar 56.17 per cent year-to-date (YTD) return, marking the highest in 11 years and more than doubling its five-year average of 20.31 per cent.

The outstanding growth is also linked to consistently demonstrating a commitment to driving economic growth and supporting sustainable development in Ghana and beyond.
 

Traded shares increase

Last year, the GSE witnessed a surge in trading activity with 992 million shares traded, representing a 71 per cent year-on-year increase. Turnover also rose sharply to GH¢2.15 billion, up by 163 per cent compared to the previous year, underscoring the increasing appeal of equities among investors seeking higher returns.

The top-five gainers of 2024 included Unilever, which posted 140.44 per cent YTD gain and Ecobank Transnational Inc., which rose by 106.67 per cent. MTN Ghana also featured prominently with a 78.57 per cent increase in its share price, closing the year at GH¢2.50. 
 

Forward looking strategy

With the GSE’s forward-looking strategy reflective of an ambitious vision of creating a robust and inclusive capital market that drives both corporate and economic transformation in Ghana, experts tip the market to sustain the bullish performance this year.

By aligning with regional and continental initiatives, the GSE’s intended target to channel domestic savings into productive local projects, positioning itself as a significant player within Africa’s evolving financial landscape would not only impact growth in the local economy but continue as the most responsive market.

Capital Finance International), a print journal and online resource reporting on business, economics and finance, said through strategic innovation and resilience, said GSE had made notable advancements, including the introduction of over-the-counter (OTC) trading services, designed to provide a simplified entry point for companies seeking capital.

It highlighted GSE’s expansion of product offerings which also feature a commercial paper market, enabling companies to access short-term financing, and a dedicated sustainable market segment launched in line with international environmental, social, and governance (ESG) standards.

The GSE is projected to deliver another strong performance in 2025, with Databank research forecasting a 45 per cent gain in the GSE composite index, closing the year at 6,850 points.

This follows a 26.13 per cent return in dollar terms in 2024, with the Accra bourse ranking as the best-performing market in Africa in cedi terms.

Key sectors such as banking, telecommunications, and fast-moving consumer goods (FMCG) are expected to drive growth.

MTN Ghana remains a top pick due to strong earnings and dividend yields averaging 12 per cent since its 2018 listing.

FMCG leaders such as Unilever Ghana, Fan Milk, and Guinness Ghana Breweries are poised for recovery, supported by favourable operating conditions and stronger earnings.

Other analysts anticipate that the Composite Index (GSE-CI), which tracks the performance of the main market, will surpass the 5,000-point mark this year to extend its remarkable performance from 2024.

An analyst at Fincap Securities, John Nani, highlighted a growing confidence in the equities market as a key driver for sustained growth.

“The equity market’s broad-based performance is expected to persist, with MTN Ghana continuing to play a leading role due to its consistent dividend payouts, rising revenues and growing profitability,” he said in an interview.
 

Role of T-Bills, cedi depreciation

The Treasury bill market experienced significant undersubscription, with a GH¢20 billion shortfall in the third quarter alone. This scarcity of traditional fixed-income options, combined with the cedi’s 19 per cent depreciation against the US dollar, redirected investor attention to equities.

The exchange’s Financial Index gained 25.2 per cent, recovering from a 7.36 per cent decline in 2023.

The rebound followed a challenging period after the restructuring of domestic cedi bonds, cocoa bills and domestic dollar bonds had impacted bank balance sheets and dampened investor sentiment.
 

Equity market outperforms T-Bills

The equity market significantly outperformed Treasury bill returns in 2024, as 91-day T-bills stood at 28.24 per cent. Similarly, the 182-day and 364-day bills stood at 28.68 per cent and 30.07 per cent respectively.

This reinforced the equity market’s attractiveness as an investment option.

Analysts observed that this trend is likely to continue in 2025, with the broader market expected to deliver stronger returns compared to short-term debt instruments.

Future plans

Sharing insights recently on the market's performance and future plans, the Chief Executive Officer of GSE, Abena Amoah, emphasised the importance of engaging the market, executing financial literacy programmes, diversifying products and attracting profitable companies that share information with investors.

In the context of the African Continental Free Trade Area (AfCFTA), Ms Amoah stressed the pivotal role of capital markets in supporting economic transformation and business expansion. 

By enabling companies to raise capital and encouraging individual African investors to participate in wealth generation, stock exchanges such as the GSE are poised to contribute to the success of AfCFTA and drive growth across the continent.

As the GSE gears up for another year of opportunities and challenges, Ms Amoah's strategic vision and commitment to market development position the exchange for continued success in 2025.

She said the GSE's outlook for 2025 reflected confidence in broad-based sector growth, underpinned by improved corporate earnings and market conditions. 
 

Continental competition

While Ghana came top on the continent in the year under review, other African markets also posted strong performances.

Malawi Stock Exchange followed GSE with 55.06 percentage gain, with Zambia’s index ranking third, by gaining 44.1 per cent in 2024.

The country’s focus on debt restructuring and infrastructure development has attracted international attention. With global demand for critical minerals increasing, Zambia’s stock market could sustain its momentum in 2025. This could pose strong competition to Ghana.

Nigeria’s stock market surged 37.7 per cent, supported by President Bola Tinubu’s economic reforms, including currency liberalisation and the removal of fuel subsidies. The energy sector was a standout, with Oando Plc and Seplat Energy Plc posting exceptional gains.

However, ongoing inflationary pressures and a cost-of-living crisis may temper investor enthusiasm in 2025.

The Uganda Securities Exchange recorded a 36.94 per cent appreciation, with its All-Share Index rising from 872.5 points to 1194.8 points. Notable listings included Airtel Uganda, British American Tobacco and Stanbic Bank Uganda.

Kenya’s market posted 34.06 per cent gain in local currency and leading the continent in dollar terms with a 65.3 per cent return.

The BRVM, serving Francophone West Africa, returned 29.7 per cent as its composite index moved from 212.82 points to 276.02 points. In dollar terms, the market achieved a 34.9 per cent return – second only to Kenya among African exchanges.

Morocco’s Casablanca Stock Exchange advanced 22.16 per cent, with its All-Share Index rising from 12,092.88 to 14,773.19, as Dar es Salaam Stock Exchange in Tanzania gained 20.85 per cent, with its All-Share Index closing at 2,139.73 points. Major listings included East African Breweries, KCB Group, Tanzania Breweries, Vodacom Tanzania and Tanzania Cigarette.

Egypt’s exchange rounded up the top performers with a 19.47 per cent increase in its EGX-30 index.

These performances exceeded the MSCI Frontier Emerging Markets Index’s 7.43 per cent gain.

The index tracks several African markets, including Ivory Coast, Morocco, Egypt, Mauritius, Kenya and Tunisia.

Credit: Ghana Stock Exchange