GHANA STOCK EXCHANGE WEEK FROM 22-10-18 TO 26-10-18

THE GHANA STOCK EXCHANGE WEEK FROM 22-10-18 TO 26-10-18 WAS TERRIBLE. BOTH THE COMPOSITE AND THE FINANCIAL WENT DOWN DURING THE WEEK.THE COMPOSITE LOST 24 POINTS DURING THE WEEK FROM 2,952 TO 2,928 WITH ONLY A SHORT UPWARDS TREND ON THURSDAY. ON THE OTHER HAND, THE FINANCIAL LOST EVEN 66 POINTS FROM 2,483 TO 2,417. IT HAD THE SAME SHORT UPSIDE MOVE ON THURSDAY, ALTHOUGH NOT AS SIGNIFICANT.

THE REASONS FOR THIS DOWNWARD SLOPE WE CANNOT ONLY FIND DOMESTICALLY. ACCORDING TO AN ANALYSIS OF THE BANK OF AMERICA, AROUND 80% OF THE EMERGING STOCK MARKETS ARE IN BEARISH TERRITORY. A BEAR MARKET EXISTS IF THERE IS A DOWNTURN OF 20% IN A STOCK MARKET WITHIN 2 MONTHS (https://www.investopedia.com/terms/b/bearmarket.asp )

AS FAR AS I HAVE THE OVERVIEW, THIS STAGE WE HAVE NOT REACHED IN GHANA YET. BUT IT SHOWS HOW IMPORTANT EXTERNAL INFLUENCES ARE ON THE DOMESTIC STOCK MARKET. THIS IS ESPECIALLY TRUE FOR STOCK MARKETS IN EMERGING ECONOMIES. THESE ECONOMIES ARE BASICALLY NOT AS CONSTANT AND STRONG AS MANY OF THE DEVELOPED ECONOMIES. CONSEQUENTLY, FOR EXAMPLE, A STRONGER DOLLAR INFLUENCES THE STOCK MARKET IN DEVELOPING ECONOMIES IN A FAR MORE PERILOUS WAY. CAPITAL WILL BE REMOVED FROM THE EMERGING MARKETS. THEY WILL FLOW INTO THE US MARKET, FOR EXAMPLE, WHERE THE CONDITIONS ARE BETTER. COMPANIES WHICH FINANCE INFRASTRUCTURE AND INNOVATION IN DOLLARS MUST PAY HIGHER PRICES FOR INVESTMENT.

TO SUMMARISE THE WHOLE ISSUE, THERE ARE SURELY DOMESTIC ISSUES THAT PLAY A ROLE IN THE DOWNWARD TREND OF THE GHANA STOCK EXCHANGE. THIS MIGHT BE MANAGERIAL, FINANCIAL, OR ECONOMICAL ISSUES. BUT TO REDUCE EVERYTHING ON DOMESTIC REASONS WOULD BE A BIG MISTAKE.

WE WILL SEE HOW THE GHANAIAN STOCK MARKET WILL DEVELOP IN THE FOLLOWING WEEKS. STILL, THERE IS NO REASON TO PANIC.  MANY OF THE BLUE CHIPS ARE STRONG AND WILL BE ABLE TO WITHSTAND CHALLENGES TO A CERTAIN EXTEND.

LOOK OUT FOR MORE INFORMTION IN THE COMING WEEKS ON https://www.recklingblog.com

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