Can Ghana equities sustain positive momentum in Q2'23?

The Ghana Stock Exchange has been making headlines with its recent positive momentum, defying challenging economic conditions such as high inflation and a weak currency. Michael Asare, a Research Analyst at Apakan Securities, shed light on the major drivers behind the remarkable performance of the GSE so far this year. Despite a sluggish start in the equity market with a 3% loss, the GSE has since seen a significant turnaround, boasting an impressive 15% increase in market return. One of the key contributors to this surge has been the oil sector, particularly the oil marketing companies. Total Energies has stood out with a remarkable year-to-date return of about 60%. The telecommunications industry, represented by MTN Ghana, has also shown robust performance with a 48% year-to-date return. Additionally, the agri-processing sector, exemplified by Benson Oil Plantation, has posted a noteworthy year-to-date return of 46%. These sectors have been pivotal in driving the positive sentiment and growth in the Ghanaian stock market. Looking ahead to the second quarter of the year, Asare is optimistic about the market's sustainability. With the prospect of an impending IMF deal, there is an expectation of increased stability in the macroeconomic landscape, further bolstering investor confidence and market performance. Asare anticipates that the market will continue its upward trajectory as the government progresses towards finalizing the IMF agreement. When it comes to potential investment opportunities, Asare highlights several companies across various sectors that are poised for continued growth. Among the standout options are Total Energies in the oil marketing industry, MTN in the telecommunications sector, and Benson Oil Plantation in the agri-processing space. These companies have demonstrated strong performance in the first quarter and are projected to maintain their momentum throughout the year, making them attractive prospects for investors. With the Ghana Stock Exchange defying economic headwinds and showcasing resilience in the face of challenges, investors and market observers are keeping a close watch on the potential opportunities and developments in the coming months.