GHANA STOCK EXCHANGE WEEK FROM 14-01-19 TO 18-01-19

GHANA STOCK EXCHANGE WEEK FROM 14-01-19 TO 18-01-19 AGAIN SHOWED A LITTLE BIT OF UP AND DOWN. BUT IT SEEMS THE GHANA STOCK EXCHANGE (GSE) HAS AT LEAST FOUND THE BOTTOM  LINE FOR BOTH INDEXES. THE COMPOSITE ENDED THE WEEK AT 2556 POINTS, DOWN 8 POINTS FROM THE DAY BEFORE. ON THE OTHER HAND, THE FINANCIAL FINISHED AT 2155 POINTS, DOWN 10 POINTS.

THIS SEEMS TO BE A CONTINUATION OF THE DOWNTURN THAT WE SAW AT THE END OF LAST YEAR, BUT REALITY IS FAR FROM THAT. THERE WAS AN UP AND DOWN FOR BOTH INDEXES. IT SEEMS THEREFORE THAT BOTH INDEXES FINALLY FOUND THEIR BOTTOM LINES. CALCULATED CAUTIOUSLY, THE COMPOSITE’S GROUND SHOULD BE AT 2,500 POINTS, WHEREAS THE FINANCIAL BOTTOM SHOULD BE AT 2,100 POINTS.

ALSO THE FURTHER MACROFINANCIAL ENVIRONMENT IS SUPPORTING THE IDEA THAT THE END OF THE DOWNWARD MOVEMENT OF THE GSE IS THERE. THE ASSOCIATION OF GHANA INDUSTRIES (AGI) HAS HAILED THE RECENT RE-CAPITALISATION OF THE BANKING SECTOR IN GHANA.  THE AGI EXPECTS THAT THIS EXERCISE LEADS TO A STABILISATION OF THE FINANCIAL SECTOR, AND TO MORE LIQUIDITYY. CONSEQUENTLY, THE BANKS WILL IN FUTURE BE LESS RELUCTANT TO DISBURSE LOANS TO THE BUSINESS COMMUNITY. THIS, IN TURN, WILL MEAN THAT BUSINESSES CAN INVEST MORE IN INNOVATIVE PRODUCTS AND RESEARCH AND DEVELOPMENT (R&D).

FURTHERMORE, THE BANK OF GHANA OBVIOUSLY INTENDS TO EXTEND THE STABILISATION EXERCISE TO SAVINGS&LOANS COMPANIES AND MICROFINANCE INSTITUTIONS. THAT WILL LEAD TO A CHANGE IN THE CONFIDENCE OF THE BUSINESS AND THE CONSUMER COMMUNITY IN THE FINANCIAL SECTOR. AT THE LONG RUN, THE RURAL AND COMMUNITY BANKS WILL ALSO  COME UNDER THE SCRUTINY OF THE BOG

THERE MIGHT BE SOME QUESTIONS ABOUT THE RE-FINANCING OF SOME BANKS THROUGH THE GHANA AMALMAGATED TRUST (GAT). THESE QUESTI ONS MIGHT BE CONCERNING THE PROFITABILITY OF THE INVESTMENTS OF PENSION FUNDS IN THE BANK’S DEBTS. SEE FOR THAT THE ARTICLE IN https://thebftonline.com

BUT ON THE OTHER HAND, WE SHOULD AT LEAST TRUST THE FINANCIAL EXPERTS IN THE PENSION FUNDS A LITTLE. THEY SHOULD KNOW WHY THEY INVEST IN SOME FINANCIAL INSTRUMENTS, AND HOW NOT TO PUT THE LIQUIDITY OF THEIR ORGANISATIONS AT A RISK.

AS A CONCLUSION, I AM OF THE OPINION THAT WE CAN HAVE A POSITIVE LOOK INTO THE FUTURE. THE ECONOMICAL ENVIRONMENT TAKES SHAPE AND WILL CONTRIBUTE TO A POSITIVE DEVELOPMENT ON THE GSE. NOW IT’S IN THE HANDS OF THE VARIOUS MANAGEMENTS TO USE THE BETTER ECONOMICAL ENVIRONMENT TO ALSO DEVELOP THEIR BUSINESSES. ONLY THE REALISATION OF THIS CORRELATION BETWEEN MACRO- AND MICRO-ECONOMICS WILL LEAD TO A POSITIVE DEVELOPMENT OF THS COUNTRY.

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