GHANA STOCK EXCHANGE WEEK FROM 08-10-18 TO 12-10-18

 

THE WEEK FROM 8TH TO TWELTH OCTOBER WAS DISAPPOINTING ON THE GHANA STOCK EXCHANGE (GSE). BOTH THE COMPOSITE AND THE FINANCIAL ENDED THE WEEK LOWER THAN THEY STARTED IT. LAST WEEK I SAID THAT THE FINANCIAL HAS PROBABLY FOUND ITS BOTTOM LINE AT 2,600. THE LAST WEEK ALSO SHOWED THAT FINANCE IS NOT AN EXACT SCIENCE. I WAS WRONG. ON THE LAST DAY OF THE WEEK, THE FINANCIAL FELL UNDER THE 2,600 MARK AND ENDED THE WEEK ON 2,576. IT SEEMS THAT INVESTORS DON’T BELIEVE THAT ANY BANKING CRISIS – IF IT REALLY EXISTS – IS NOT OVER YET. SOME PARTS OF THE INVESTOR COMMUNITY OBVIOUSLY THINK THAT MORE FINANCIAL INSTITUTIONS WILL EXPERIENCE MORE PROBLEMS. WELL, WE WILL SEE IN THE COMING WEEKS.

SURPRISINGLY, HE COMPOSITE ALSO ENDED THE WEEK ON A LOW POINT, FINISHING AT 3,006. BUT HERE, IT DOESN’T SEEM TO ME THAT IT IS A STRUCTURAL PROBLEM. I BELIEVE MORE IN A CASH-IN OF GAINS OF THE  LAST WEEKS.. NEW COMER MTN GHANA LOST SOMETHING FOR THE FIRST TIME SINCE LISTING ON THE GSE. I AM SURE THAT THIS CONTRIBUTED TO THE DECREASE OF THE COMPOSITE. WE WILL SEE HOW THE SHARE DEVELOPS IN THE COMING WEEKS. I PERSONALLY BELIEVE THAT RATHER SOONER THAN LATER, THE SHARE WILL BREAK THE ONE CEDI MARK. THAT WOULD MEAN A 33% RISE WITHIN A FEW MONTHS. POSITIVE FOR INVESTORS. BUT WE MUST SEE WHETHER THE SHARE JUSTIFIES THE RAPID GROWTH AT THE LONG RUN.

DESPITE THE DISAPPOINTING WEEK, THERE IS STILL HOPE THAT THE COMPOSITE AS WELL AS THE FINANCIAL WILL REGENERATE THEMSELVES IN THE COMING WEEKS. APART FROM SOME COMPANIES WHICH FOR MY UNDERSTANDING SHOULD HAVE NOTHING TO DO WITH THE GSE, THE FINANCIAL INSTITUTION IS HEALTHY. STOCKS GO UP, AND STOCKS GO DOWN. BUT AT THE LONG RUN, STOCK MARKETS USUALLY SHOW A POSITIVE DEVELOPMENT.

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