Ghana?s Bourse failed to stick to historical trends during the month of March 2014 with the indices pegged back by decliners. The usual trend of investor expectation of impressive results and dividend announcements during this time of the year which typically led to increased risk taking was nonexistent.
Though a number of listed firms have released impressive results for the 2013 financial year, some have begun declaring dividends and ?investors appeared unfazed with profit taking having a toll on some equities.
Additionally, investor concerns about the economy weighed on demand while the rising rates on money market instruments restricted risk taking.
On the back of the reduced interest in the market volume and turnover failed to match figures registered during the previous month. A total 10.11M shares valued at GH?23.67M changed hands in twenty seven equities. This compares to February?s volume of 12.52M shares valued at GH?23.67M.
In spite of the foregoing, eight stocks closed the month higher as the activities of speculators, and also the drive to take positions in some stocks gave some verve to the indices. Total Petroleum (22.5%) and SIC Insurance (18.2%) were some of the key advancers in March. Other gainers were HFC Bank, GOIL, ETI, CAL Bank and Fan Milk.
On the flip side, Enterprise Group (-19.8%), Societe Generale (- 14.5%), Ecobank Ghana (-9.7%), and Standard Chartered (-2.8%) failed to extend gains in March. They however remain in positive territory this year. Nine others slipped.
Overall however, decliners had the edge with the benchmark Composite Index shedding 34.57 points to close at 2,386.34.
This saw the return on the broader market close the month at 11.24% from 12.85% at the end of February.
The GSE Financial Index also failed to add to the previous month?s gains trimming 75.8 points to close March at 2,092.46. This represents a year to date return of 17.12%.
Outlook:
In the coming weeks, market watchers ?foresee a mixed outturn as some stocks which rallied earlier in the year give up some gains.
In spite of the slowdown in market activity in recent weeks we believe there are opportunities for investors.
The latest slide in the prices of stocks like GCB has increased its appeal. CAL Bank, which boosts some of the best multiples in the industry may also attract investors.
Though profit taking may weigh on the shares of TOTAL, EGL, SCB and Ecobank Ghana in the near term, we expect the market to return to winning ways in April as demand for dividend paying stocks is likely to give a boost to demand. Additionally, we anticipate demand by long term investors helping to steady the indices.
Source Merban Stockbrokers Ltd
