Coronavirus: Financial stocks likely to revamp post-2020 polls – Analyst

Head of Research at Databank, Alex Boahen has expressed optimism at the likely revamp of financial stocks post the 2020 general elections and post COVID-19 pandemic.

The GSE Financial Stocks Index (GSE-FSI), has experienced a substantial drop of about 15 percent from January to August 17, 2020. The index reflects the average performance of shares of listed financial companies.

According to Mr Boahen, the poor performance of financial stocks on the Ghana Stock Exchange (GSE) for 2020 has been largely accredited to the pandemic, poor public sentiments and fallouts from the banking sector reforms.

“The fundamental growth of the banking sector that we have seen from last year and this year, that positive development has not been reflected in share prices. So banking stocks have continued to decline. That, however, is something that in my view is providing an opportunity for investors. The current low share prices do not mean that the companies are not performing well, it is due to poor market sentiments,” he said.

“In my view, once we are able to get over this election as well as this COVID-19, we are likely to see a significant recovery. What I believe is that a successful election will bring some renewed confidence in the market and that will augur well for the performance of the market.”

The Research analyst, however, said the performance of financial companies on the GSE with low share prices will offer prospects for investors for some firms.