How Ghana's macro uncertainties impacts equities

The Ghana Stock Exchange has been battling to gain momentum this year, with the Year-to-date Performance sitting at a modest 1.2 per cent. Analysts have attributed this lackluster performance to the prevailing macroeconomic conditions in the country. Michael Asare, a Research Analyst at Apakan Securities, shed some light on the situation in a recent interview with CNBC Africa. Asare highlighted the negative sentiments prevailing in the equities market, which are a direct reflection of the general macroeconomic challenges faced by Ghana. The country's President recently delivered the State of the Nation address to address these issues and reassure the public about the government's efforts to improve the economic situation. This has brought some optimism to the market, with a slight reversal of losses seen, pushing the year-to-date return to around 2.13 per cent. Investor sentiment seems to be cautiously optimistic, with a focus on fundamentally strong stocks that are weathering the storm. Two stocks that have stood out in the market are MTN and Benzo Oil Palm Plantation, showing resilience and positive returns amid the overall negative trend. Analysts believe that the upcoming approval of the $3 billion loan from the IMF could serve as a significant catalyst for the market, boosting investor confidence and potentially attracting offshore investments back into the market. Additionally, talks with China on debt restructuring have also been a positive development for the market's outlook. Despite the challenges faced by the banking sector, there is hope for recovery in the coming months as conditions stabilize. The Ghanaian currency, the CD, has shown signs of improvement, with a decrease in depreciation and an increase in stability, thanks to the central bank's intervention in the foreign exchange market. As the IMF loan is expected to bolster the central bank's reserves, further enhancing the currency's performance, investors are closely monitoring the situation and cautiously hopeful for a turnaround in the market.