Stock market slumps in first half of the year

Accra (Greater Accra) 28 July '99

Total volume of shares traded on the Ghana Stock Exchange (GSE) in the first half of this year has slumped compared with that for the same period last year and analysts said this was due to dumping of shares on the market by investors.

Mrs Diana Okine, Research Officer of the GSE, told the GNA that the market was over-flooded by investors who off-loaded their shares after making some gains over time.

She also attributed the trend of continuous fall in the All-Share Index to investor panic as share prices depreciate.

The Market Index currently stands at 789.56 points. It reached an all-time high of 1,201.08 points in May 1998 and recorded an all-time low of 55.49 points in May 1991.

According to statistics obtained from the GSE in Accra on Tuesday, total volume of shares traded up to the end of June was about 166 per cent down from 18 million compared with 48 million traded in the first half of last year.

The total volume of shares traded in the whole of last year was 91,446,520.

The value of the shares in the first half of the year was 26 billion cedis as against 74 billion cedis for the same period in 1998.

For example, the total volume of shares traded in June, this year stood at 1.9 million shares with a value of 2.8 billion cedis while for the same month last year, the volume of shares was 5.1 million shares and the value was 18.6 billion cedis.

Between May and June 1999 the Exchange recorded a percentage change of negative 72 in volume of shares traded while the percentage change for the full year of between June 1998 to June 1999 stood at negative 63 per cent.

On whether the gloomy atmosphere would soon be over, Mrs Okine said: "as unpredictable as the market is, nobody can tell what may happen. Things could improve".

She said the Exchange has adopted a number of strategies to increase investor interest. These include promotions, training programmes, public lectures and the publication of success stories of people who have benefited from investing on the Exchange.

The promotions, she said, are directed at investors, listed and unlisted companies.

There has not been any listing since 1996. This has led to the crowding of the market where investors have no options but the 21 listed companies.

Mrs Okine said brokers could also contribute by attracting more investors and convincing their clients not to sell off when prices fall.

Market capitalisation as at the end of June last year was 3,347.45 billion as cmapared with 3,308.52 billion cedis in June this year.

GRi../