Ghana Stock Exchange fixed income market sees 236% year-over-year growth in August

The Ghana Stock Exchange (GSE) reported significant growth in its fixed income segment for August 2024, contrasting with a more modest performance in the equity market.

The GSE’s fixed income market recorded a 236.02 percent year-over-year (YoY) increase in traded volume for August – reaching 17.92 billion, data from the market operator showed.

This figure represents a 29.2 percent increase from July 2024. The year-to-date (YtD) trading volume reached 103.24 billion, a 99.47 percent increase compared to the same period last year.

This growth marks a return of investor activity to the Ghana Fixed Income Market (GFIM) following a period of reduced participation due to the domestic debt exchange programme (DDEP).

The composition of traded instruments in August was dominated by treasury bills at 64.28 percent, followed by government bonds at 34.08 percent and Corporate Bonds accounting for the remaining 1.64 percent.

Analysts have said that the recovery in fixed income trading volumes suggests improved market liquidity and potentially stabilising expectations regarding the nation’s fiscal management.

In contrast to the fixed income market, the GSE equity segment showed more varied results. The GSE Composite Index (GSE-CI) – which measures the performance of listed stocks – closed August at 4,359.85 points, a marginal decrease of 2.98 percent for the month, with a market capitalisation of GH¢92.1billion.

However, YtD the GSE-CI has recorded a 39.28 percent gain. The GSE Financial Stock Index (GSE-FSI) fared slightly better than the broader market – increasing by 0.77 percent in August, with an 11.38 percent year-to-date gain.

This comes as banking industry assets jumped to GH¢323.2billion in June this year, according to the Bank of Ghana’s Monetary Policy Report for the period.

This growth, according to the central bank, was on account of a surge in deposits and a weakening cedi.

Unsurprisingly, individual stock performances within the equity market varied widely. Top gainers included Guinness with a 9.79 percent increase, Camelot with 9.09 percent and Benson Oil with 8.7 percent. On the other hand, notable declines were observed in MTN which fell by 5.98 percent; and CAL, which dropped by 8.82 percent.

While the trading volume decreased by 75.94 percent year-over-year to 22.3 million shares, the trading value increased by 40.55 percent to GH¢175.91million.

From beginning of the year until end of August, trading figures showed an 83.91 percent increase in volume and a 170.94 percent increase in value compared to the same period last year.

The fixed income and equity segments’ contrasting performances, analysts say, point to a market that is increasingly becoming more efficient – with investors looking for the best possible opportunities.

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