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Investors Exit Overvalued Stocks At GSE

botchway June 6, 2018

The mood for most of the sessions throughout the last week of May (28 to 31) remained lukewarm on the Ghana Stock Exchange (GSE), as investors exited overvalued stocks in exchange for long-term quality plays.

On the balance, laggards had the numerical advantage, tilting the index towards pessimism for the fourth straight week, despite strong macro fundamentals, therefore, the GSE-Composite Index consequently closed the week down by

3.1 per cent on a week-on-week basis to touch 3,192.3 points, bringing the year-to-date return to 23.7 per cent.

Nordea Capital Investment Stock Market expert review of the week, obtained by the Ghana News Agency revealed that the selling pressures across multiple sectors.

According to the Nordea Capital Expert, selling pressures intensified in the week under review, as price changes for the week tipped towards pessimism, with the advance to decline ratio coming in at 3:10; Starwin Products Limited lost half of its value (-50 per cent) to end the period at GH¢0.01 per share.

The Ecobank Transnational Incorporate also declined despite strong fundamentals. The bank holding company has had its shares undervalued for several months as the market price continues to trade below the intrinsic value.

The stock dipped 17.4 per cent on a week-on-week basis to GH¢0.19 per share; Enterprise Group Limited continued on its losing spree, falling by 14.3 per cent to GH¢3.00 per share. TOTAL Petroleum went down by 13.6 per cent to GH¢5.10 per share.

The other losers for the week were Standard Chartered (-6.7 per cent), CAL Bank (-5.8 per cent), Societe Generale (-2 per cent), GCB Bank (-1.6 per cent), Ecobank Ghana (-0.2 per cent), Fan Milk Limited shed-0.1 per cent to close the week at GHC16.46 per share.

According to the Nordea Capital Stock expert, the best performing stocks with regards to capital appreciation were from the consumer and agribusiness sectors. Gainers for the week included PZ Cussons (+4.5 per cent), Benso Oil Palm Plantation (+0.4 per cent) and Unilever (+0.1 per cent).

Despite the lacklustre mood, activity on the market witnessed an improvement over the previous week’s performance. Both turnover and liquidity increased by 311.5 per cent and 695.5 per cent respectively on a week-on-week basis.

A block trade in CAL Bank at the last trading session saw it emerge as the most traded counter on the exchange, accounting for 51.1 per cent of total value traded.

Meanwhile the shares of Ghana Oil Company Limited (GOIL) the nation’s foremost indigenous Oil Marketing Company (OMC), has started exhibiting signs of major upward movement on the Ghana Stock Exchange (GSE) as investors across board continue to take keen interest in GOIL shares.

GSE Stock watchers has predicted that GOIL shares would begin to hit the upper trajectory in June, stressing that market reactions by the 20 largest shareholders which stood at 347,027,776 shares representing 88.56 per cent of the total shares as at the end of December 2017, seeks to be the main underlining factors for the upward movement.

The GSE Stock Market watchers told the Ghana News Agency in an interview on Monday that investors on the stock market were also keenly monitoring the minority shareholders whose shares stood at 44,835,352 shares representing 11.44 per cent.

According to GSE Stock Market watchers, the minority shareholders have also gradually started increasing their portfolio after the GOIL Annual General Meeting recently, where it was affirmed that GOIL remained the biggest company Oil Marketing Company (OMC) in the country in terms of market share, which was attracting investors’ interest.

According to Stock Market Experts, GOIL market share of OMC field operations moved to 20 per cent in 2017, up from 18.2 per cent in 2016, and from all indications, the company was on course to achieve the target of 30 per cent market share by the end of year 2020.

Source: GNA

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