Stable macroconomic environment to boost GSE growth in second-half of 2024
Stocks are expected to continue to perform well on the Ghana Stock Exchange (GSE) going into the second-half of 2024.
While non-financial stocks have predominantly driven the rally in the stock market, the financial sector has shown strong recovery, with most banks joining the rally following a good quarter one 2024 financial results.
According to Databank Research, the Ghanaian economy is benefitting from a successful International Monetary Fund programme, thus maintaining stability, and fostering a positive earnings growth outlook across various sectors. This stability is expected to bolster investor confidence in equities.
In the first half of 2024, the GSE-Composite Index performed better than expected, surpassing its initial forecast of 3,756 points and currently stands at 4,490.80 points (43.47% Year-to-Date).
“From a technical analysis standpoint, we expect the GSE-CI to close at 4,380 points, reflecting 40% (±500 basis points). We remain cautious of potential profit-taking and some volatility as elections draw nearer. Below are our sector-specific opinions”, it said.
Robust earnings recovery to stimulate demand for banking stocks
Similarly, robust earnings recovery in the banking sector will stimulate demand for banking stocks.
In the hindsight of Domestic Debt Exchange Programme, it anticipates the banking sector will continue to benefit from the favourable yields on short-term treasury securities in a bid to preserve capital.
At the close of quarter one 2024, the sector posted a significant earnings recovery with a notable 53% year-on-year growth in net profits, largely fueled by a 31% year-on-year growth in interest income piggybacking on a 42% increase in investment securities.
BOPP to lead non-banking stocks gains
Again, analysts believe the non-banking sector would remain strong largely due to the ongoing recovery in consumer demand coupled with positive turnaround in profitability Benso Oil Palm Plantation’s (BOPP) generous dividend policy has revived positive traction in the stock, flunking it to trade at its all-time high of GH¢23 per share.
This reflects investor confidence in BOPP’s performance and its growth potential.
Despite the current gains, Databank believe BOPP still has a significant upside in the agribusiness stock, with occasional periods of profit taking-driven pullbacks.
The Ghana Stock Exchange experienced remarkable growth in the first half of 2024, continuing the positive trend that began at the start of the year.
The Composite Index (GSE CI) gained 373.41 points in the second quarter of 2024 to close at 3,829.61 points, marking a Year-To-Date return of 22.34%.