Ecobank Ghana (EBG) held lion's share of trade value - Market records worst performance

CBL:- The Stock Market recorded its worst day-on-day performance today, as the major indices (GSE Composite Index & GSE Financial Stock Index) fell, following losses in three equities. The GSE-Composite Index returned -0.96% as it fell 10.04 points from 1,040.70 points to 1,030.66 points. The GSE-Financial Stock Index closed at 883.00 points, from 893.32 points.

CAL BANK was dominant in terms of volume traded, accounting for

How fast does information reflect in the prices of shares on the Ghana Stock Exchange?

The question about efficiency of the capital market always comes up in my mind. And now I am asking how fast information released by stakeholders of the market affects or reflect on prices on the exchange.

Shareholders make investment decisions based on the information they get from stakeholders of the market. Such information include new tax measures announced by the government, announcement of new products by the company, release of annual reports and announcement of higher or lower dividends. In the advanced markets, for instance on Wall Street, information released by companies or the government rapidly reflects on the prices of shares within minutes. Information release at non-trading hours affects the market in the next trading session.

In the Ghanaian market on the other hand, one can hardly tell the relationship between information and their effect on the prices in the market. Moreover, the speed of reflection on the market varies from time to time.
In the immediate past, CAL Bank share price saw a decrease when there was a problem in the company with respect to share transfer between two parties. How direct and certain can one be to link the cause of decrease in share price to that particular information? Other stocks in the market have shown similar trend. By my observations in the earnings season, share prices respond to the performance of companies as reported by their financial. Even at this time, the speed of reflection is an issue to be concerned about.

 I can’t wait for the capital market to reach the point where information takes minutes to reflect on the market. This would make the market active and inform investors in making good decisions moreover, aiding accurate speculations.

Benso Oil Palm Plantation (BOPP) in the 1st Quarter of 2012 on Ghana Stock Exchange

6 months performance on GSE - BOPP [Oct - Mar]

Benso Oil Palm Plantation with GSE stock ticker symbol; [BOPP] is an oil palm producing and processing company and was listed on the GSE on August 30, 2004 when it was converted into the public limited liability. The nature of businesses the company is authorized to carry on include: Growing of oil palm and other agricultural products, Processing of oil palm fruits to produce palm oil and palm kernels and Dealing & trading in palm oil, palm kernels and other agricultural products.

BOPP on the Ghana Stock Exchange has recently been the choice for investors as the company continues to show greatness in different forms.

The Key Statistics for BOPP as researched by Bloomberg reveals that, the current P/E ratio [trailing twelve months (ttm)] is 6.0546 and Earning per share (EPS) (ttm) is 0.2808.  BOPP’s current market capitalization is GHS 59.16 million with about 34.80 million shares outstanding. Price per Book (most recent quarter) is valued at 1.9908.

BOPP started the year, 2012 on the Ghana Stock Exchange with a share price of GHS 1.10 (03.01.12) and has since been rising to attain a year high of GHS 1.78 (20.02.12); the highest since 18^th October, 2011. An investment made in BOPP exactly a year ago would make an outstanding 121.23% profit to date.

Year to Date change on GSE - BOPP [Jan -Mar. ]

Analysts predict further rise in price of this stock in the year but the greatest fear for most investors is the Election Year fever on the market which has shown its power over stocks in the past years.

We hope to closely follow this stock and see how investors react to it despite the election year’s controlling force in the market. 

Bank of Ghana vs. Onward Investment Limited, Power vs. Fraud?

 With a vision ‘to achieve a comparative advantage among leading investment companies…’ and a mission ‘to become an outstanding provider of legitimate investment services…’ Onward Investment Limited, an indigenous Ghanaian company with registration number CA-75,073 is experiencing the sanction of Bank of Ghana (BOG) as they operate without a license in the financial market.

BOG is making a relentless effort to protect ordinary investors in the system hence would stop any organization that flouts its regulations.

Onward Investment Limited has an aim to contribute to the economy by developing the Forex market through the offering of Forex training services and online forex trading for individuals in the country and even foreigners. But it’s very unfortunate on their part that the BOG had to put a hold on their operations and warn the public about them, on the basis of not having a license to receive deposits from the public. What is the point in trying to achieve those great visions without passing through the right processes?

How many of these unlicensed financial service providers are in the system? What is the Securities and Exchange Commission doing to protect investors? Why do companies refuse to get a license if that could boost their businesses? Are the licensing processes too rigid or demanding? These are questions the average investor is asking.  

On the part of Onward Investment ltd.; who are the owners? , what is their expertise? , what are their records and what are the clear benefits for the investment community. If potential partners and investors find it difficult to answer these questions then there is something wrong.

The only 'known' Board of Directors of this company includes; Lawrence Mensah, Mohammed B. Saleh , Kwesi T. Ababio and Simon Y. Nyarko.

We hope to know more about this company and the progress of their restriction by the Bank of Ghana.

What is Short-Selling and why the ban in some European markets?

Short Selling as I explained to my younger brother is that; I borrow his nike school bag and sell at a price let's say GHC 2.00 and then hope for the price of the same nike school bag to come down to GHC 1.00 in the market. And after that I quickly buy the same nike school bag for him at the current market price of GHC 1.00 leaving me with GHC 1.00 of which I pay him a lending fee ( 0.20p) and keep the rest. (0.80p).
It is quite obvious in the case that, if the price of the nike school bag rises from GHC 2.00 to GHC 3.00 after I bought from him, I would make a loss of GHC 1.00 since I have to return his nike school bag (by buying) for him to go to school. In a more matured example, I approach an Investor of Company A to lend me 1000 shares which currently trades at $ 100 per share. (i.e. $100,000) then I sell those shares at $100 per share hoping for the price to drop to $50 per share. When that happens, I buy the same 1000 shares of Company A at $50 per share and give back to the Investor of Company A with the lending fee whether the value decreases or not. The market can turn in favour of the Investor too.
Short selling of assets mostly occurs in the securities markets and most experts allude market volatility to it. In most European markets, short selling has been banned to reduce market volatility. France, Spain, Belgium and Italy are prohibiting short sales on bank stocks and it is likely other countries would follow.
Investors are now skeptical of what would happen to the market now that short-sellers are out.