GHANA STOCK EXCHANGE WEEK FROM 19-11-18 TO 23-11-18

I MUST ADMIT THAT I SPECULATED WRONGLY WITH MY EXPECTATIONS CONCERNING THE GHANAIAN STOCK MARKET. THE GHANA STOCK EXCHANGE WEEK FROM 19-11-18 TO 23-11-18 SHOWS THE LOWEST POINT SINCE A LONG TIME. WEEKS AGO, I ASSUMED THAT THE GHANA COMPOSITE WILL REACH A POINT FAR ABOVE THE 3,000 MARK UNTIL THE END OF THE YEAR. I THINK THAT LOOKING AT THE RECENT DEVELOPMENTS, I MUST REVISE MY ASSUMPTION. THIS IS BECAUSE SINCE WEEKS, BOTH THE COMPOSITE AND THE FINANCIAL GO SOUTHWARDS. THIS WEEK, THE COMPOSITE ENDED AT 2,640, AROUND 100 POINTS LOWER THAN AT THE BEGINNING OF THE WEEK. AND THE FINANCIAL WENT INTO EXACTLY THE SAME DIRECTION, ONLY AROUND 400 POINTS LOWER THAN THE COMPOSITE.

THERE ARE SEVERAL REASONS FOR THIS DOWNTURN.

FIRST, THERE ARE THE EXTERNAL FACTORS. ALTHOUGH THE CEDI HAS STABILISED AGAINST THE DOLLAR IN THE LAST WEEKS, THE DOLLAR IS STILL VERY STRONG. THIS MAKES IMPORTS IN DOLLARS RATHER EXPENSIVE FOR LOCAL ENTERPRISES. THIS COMBINED WITH THE FACT THAT THE FINANCIAL BASE OF LOCAL COMPANIES IS NOT STRONG MAKES NEW INVESTMENTS RATHER DIFFICULT.

SECONDLY, THE BANK OF GHANA HAS OBSERVED  THAT THE BUSINESS CONFIDENCE HAS LOWERED FOR THE THIRD MONTH IN A ROW. THE ENTHUSIASM ABOUT THE AKUFFO-ADDO GOVERNMENT IS GONE. PEOPLE REPLACE THE ENTHUSIASM BY THE INSIGHT THAT CAMPAIGN PROMISES DIFFER FROM REALITY A LOT. THEY TAKE A LONGER TIME TO BE FULFILLED IN THE POLITICAL AND ECONOMICAL WORLD.

NEVERTHELESS, I AM STILL OPTIMISTIC FOR THE ECONOMY IN GHANA. THE REAL FIGURES ARE BETTER THAN THE PERCEPTION ABOUT THE DEVELOPMENTS. THIS IS BECAUSE – AS I ALWAYS SAY – DEVELOPMENTS IN THE ECONOMY TAKE BETWEEN ONE AND TWO YEARS TO BE FELT IN THE POCKETS OF THE ORDINARY PERSON. THIS ACCOUNTS FOR POSITIVE AS WELL AS THE NEGATIVE DEVELOPMENTS. I AM QUITE CONFIDENT THAT UNTIL THE END OF 2020, PEOPLE WILL ULTIMATELY FEEL THE CHANGES IN THE ECONOMY.

THE SAME ACCOUNTS FOR THE DEVELOPMENT ON THE GHANA STOCK EXCHANGE. BY 2019, BUT LATEST IN 2020, THE STRENGTH OF THE U.S. ECONOMY WILL WEAKEN, AND SO WILL THE DOLLAR. THIS WILL GIVE THE EMERGING MARKETS INCLUDING GHANA TO REALLY EMERGE.

YOU SEE THAT ALL IS NOT LOST FOR THE GHANAIAN ECONOMY AS WELL AS THE GHANA STOCK EXCHANGE. BOTH HAVE A LOT OF OPPORTUNITIES, AND AT THE LONG RUN, THEY WILL TAKE THESE OPPORTUNITIES.

STAY TUNED!

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