GSE Market Recap after Christmas

Losses in two banking stocks forced the GSE-Composite index downwards. The index closed the week at 2,142.79 from 2,146.02, bringing the year-to-date change to 78.61%. The financial stock performance benchmark also declined by 4.76 points to close at 1,783.75. 

A total of 0.05 million shares valued at GHS 0.07 million were traded. Trade volume and value declined by 99.59% and 99.74% respectively, from the previous session. HFC dominated trading with a 23.33% share of the total trade volume and 16.64% of the total value traded.

Fan Milk (FML) went up one (1) pesewa to close at GHS 6.61. Losses were recorded in CAL Bank, and GCB.

Courtesy GSE research and CBL.

Highlights from Ayrton Drug's Annual Report- Chairman's Letter

• The Chairman said 2012 was a tough year for the company. Top-line (Sales) grew by 14.68% but the bottom-line ( Profit after tax) fell by 13.61%. This he attributed to the depreciating cedi and astronomical increases in interest rates, among other factors.

• Earnings per share fell from 0.0133p in 2011 to 0.0115 in 2012 whiles dividend per share remained at 0.125p

• Plans are far advanced to build a new facility in a bid to improve the bottom line. There would also be restructuring of the company to increase efficiency of all the Departments.

Earnings Season on the Ghana Stock Exchange: Half Year Reports

We are in the first half Earnings Season on the Ghana Stock Exchange and in my earlier post about Benso Oil Palm Plantation (BOPP), i.e. Half Year Performance of BOPP, I looked at how BOPP performed on the exchange and for the first half. Below are the various performances for some of the companies listed on GSE.

UT Bank

UT Bank Ltd (UTB), an indigenous bank, have reported an 89.23% surge in profit after tax, from GHS 4.69m in 2011 half year results to GHS8.87m for the same period in 2012.

Tues. 22.05.12: Ghana Stock Exchange: Market Update

Courtesy: CAL Brokers.

In today’s trading, the GSE-Composite Index rose 1.36 points to close at 1,039.28 points. This change brings the year-to-date return to 7.25%. The Financial Stock Index also gained 0.66 points closing at 898.65 points from 897.99 points in the previous session.

Focusing on the Banking sector of the Ghana Stock Exchange (Part I)

The financial sector on the Ghana Stock Exchange includes banking and non-banking stocks. There are seven (7) banks on the exchange, six of which operate in the country and one in Gambia, (Trust Bank ltd, TBL). The banks operating in Ghana include CAL Bank (CAL), Ecobank Ghana (EBG), Ghana Commercial Bank (GCB), HFC Bank (HFC), Standard Chartered Bank (SCB), and UT Bank (UTB).

Let us now look at the various facts & figures behind these banks and how they performed since January 2012 on the Stock market.
I would be concentrating on GCB & HFC in this post.

Ghana Commercial Bank (GCB);

GCB - Bloomberg Chart: Price movement from Dec 2011 to May 2012. 

With market capitalization of about GHS 506.15 million, GCB began the

One year GSE Equities Trend Analysis for FML, EBG & GCB

One Year EQUITIES TREND ANALYSIS. [Charts from Databank Financial Services]

Fan Milk Limited (FML)

  Ecobank Ghana Limited (EBG)

  Ghana Commercial Bank (GCB)

 

Value Investing and its rewards on the Ghana Stock Exchange.

There are different kinds of stocks or shares of companies on the Ghana Stock Exchange and every investor has a purpose for investing with reference to individual risk preference and time horizon. An investor’s purpose for investing could be for growth or for income or value. Value investing is investing in stocks believed to be worth far more than their current prices rather than those that pay high dividends or seem likely to appreciate irrespective of underlying value. 

On the stock market, there are some stocks that are mispriced. Mispricing is calculated as the difference between the estimated intrinsic value and the market price of a stock. Intrinsic value of an asset, in this case stock, is the value of the asset given a hypothetically complete understanding of the asset’s investment characteristics.  Therefore when a stock is undervalued on the exchange, there is an investment opportunity and smart investors take advantage of that.

The Question then is, how do you know whether a stock is undervalued or not? This is where you need an expert to advice you. Knowing this involves a lot of factors and calculations. One must first valuate the stock using some figures on the financial statement of the company. Some industry experts say that, UT bank is currently undervalued on the stock market. They make their argument with respect to the potentials of the company and how low it is currently priced on the Stock market (0.33p, courtesy: GSE). One thing you should know is that, so many investors do these calculations and that informs their investments strategy. An advice to you is that, for an active strategy to be consistent and successful, the investor’s expectations must differ from consensus expectations and be, on average, correct as well.