Stop the bleeding of your portfolio, don't sell, reduce loss and hold

The Ghana Stock Exchange ended the week positively, following 0.22% rise in GCB's stock price. The GSE-Composite Index closed recording a year to date of 7.11%. The GSE-FSI gained 0.73 points to close trading at 1,695.04 points reaching  a CYTD of 9.64%.

There have been a lot of activities on the exchange this year with some stocks recording their highest trades ever since inception of trading. This looks promising after a tough year in 2016.

Some investors who got into the market whiles the market was at its low point are beginning to get out retrieving their gains in some good performing stocks like Fan Milk (FML) and GCB bank among others. The issue of timing is very crucial when it comes to investing. Others are still taking advantage of the relatively low prices of stocks in the market hoping for a better year under the new government.

Despite all these some investors are just totally giving up on the capital market and resorting to the money market hoping it gets back to its 2016 form.

Dumsor threatens, Inflation drops, IMF support to stay, probable drainage of Heritage fund to commence, what should one do with the bleeding portfolios of stocks.

This morning, I decided to mitigate the losses by buying more of the stocks I hold at a lower price than I earlier bought them. By so doing, a slight increase in the share price will restore me to the profit zone than waiting for the market to fully recover.

To stop the loss and start seeing gains, you need to consider buying more at the current lower price. How much more will depend on how deep the fall is from your cost price and how much you already hold.

I guess this is your best way out at this current state of the market. It is better than selling you out hoping on the money market.

What if things turn the other way round? Won't that cost me more? Yes..... It surely will. That's why it's a risky market hence you need to be tough and make that decision to stop the breeding.

GSE Composite Index starts the year positively

GSE Composite Index started the year on a positive note, recording a 9.11 point increase from 1,689.09 points to close at 1,698.20 points. The index started the year with a 0.54% return.
 
Sixteen equities recorded activity with 1,057,849 shares being traded at a value of GHS 2,470,257.49. UTB led the market with 40.48% of shares traded while FML on the other hand had 92.24 % of the total value realised.
 
CAL, EGH, FML, GCB, SCB and TOTAL recorded gains respectively. No losses were recorded today.

- CBL RESEARCH

What To Do Before Buying Any Stock

In all my investment coaching I tell my clients who want to venture into stocks trading or investment, to do one thing and that's what you should do before buying any stock in 2017.

And that is; READ MORE ABOUT EVERY COMPANY YOU DESIRE TO OWN.

Knowing more about the companies you buy or sell always gives you some upper hand and courage.

So get to work. And this is how;

On the Ghana Stock Exchange for instance there are about 35 listed companies. In 2017, target to read the Annual Reports, related news and learn more about what each of these 35 companies do.
You can dedicate one week to study about one company and before you know it, you will be more abreast with what's happening in the Market and then you can make informed decisions.
Most of the information you will need can be found here (www.annualreportsghana.com)
Fast readers can take two companies a week and read on.
Do not be scared of the figures and do not worry about interpreting the financial statements. The goal here is to know what these companies do to make profit, nature of their business, what industry they operate in, who is on their boards or management, who are the top 10 or top 20 shareholders, and any other relevant information you will get in their annual reports.

Doing this will not only get you informed but also build up some zeal or interest in you towards investing on the stock market.

You can apply this principle to other Investments you intend to hold, being it real estate, mutual funds, fixed income securities etc.

Simple task that always pays. Enjoy reading.

How to Trade in the Regular & Odd Lots Market

It's great most young investors are getting a chance to trade their own shares at the comfort of their homes or offices without heavily relying on stock brokers  (although there's still some amount of reliance).
In order to fully and easily trade on Ghana Stock Exchange (GSE), one must understand the necessary areas of the market and that brings me to the two kinds of markets - REGULAR and ODD LOTS Markets.

The Regular Market:
When trading on the exchange with the various trading platforms (e.g. iBroker trading platform ) you will come across "REG" & "ODL" .

REG: represents 'Regular market'. In this market you can only trade lots in 100s. Like 900, 500, 1000, 10,000 etc.

ODL: represents 'Odd Lots market'.In this market, you can only trade lots which are not in 100s. (Or better still let me say, lower than 100). Like 99, 45, 60, 75, etc.

How it works:
If you want to trade (buy or sell) 678 shares of any company, you will buy 600 shares in the Regular Market and then buy the remaining 78 shares from the Odd lots market (ODL) provided those number of shares are available on the various markets at the price you prefer.

Now you know. Keep investing.

Financing Your Investments Using Borrowed Money: Margin Trading on GSE

image credit: claytrader.com

I am still deeply concerned about the speed of growth of the Ghana Stock Exchange. Market players are blaming it on the low level of activities on the market because investors are few and hence ‘Ghanaians do not invest enough’.  The question then is, do the few investors we have, get the necessarily tools, options and systems to facilitate the investment process? In cases where investors want to buy more stocks but short of funds, what happens next? Is that the end?

That brings me to the concept of Buying Stocks on Margin. When are we reaching a point where we can buy stocks and other securities on margin? Every time I interact with my colleagues in the market, I hear the response that, it’s in the pipeline. Truly, this pipeline is really long.

What Does Buying on Margin Mean?

Simply put, it is borrowing part of the total purchase amount of a position using loan from a broker. Margin trading allows you to buy more shares from a listed company with the financial help from your broker than you can normally buy. With Margin trading on Ghana Stock Exchange, the market doesn’t only increase in activities but also gives brokerage firms a lot of opportunities to grow bigger. 

Investor who trades on Margin vrs one who does not:

Margin is a double edge sword. As much as margin trading of stocks can bring some good things into the market, so is the risk and let’s see how bad it is.

Here is an example:  Imagine Investor A & B has Ghc 50,000 each worth of stock in their brokerage accounts and this allows them a margin debt of Ghc 50,000 to buy extra stocks (let’s say in a company priced at Ghc 1 per). If Investor A takes the margin available and buys more stocks at the said price, he gets Ghc 100,000 worth of stocks whiles Investor B only has Ghc 50,000 in his / her account. If the share price appreciates to Ghc 2 (100% increase), Investor A will now be worth Ghc 200,000 whiles Investor B will be worth Ghc 100,000. In this case, Investor A can then pay his debt of Ghc 50,000 to his brokers leaving him / her Ghc 150,000 which is Ghc 50,000 more than Investor B who never took the margin available.

On the other side of the coin, when share price in the said company falls to 0.50p, (50% lower), Investor A will get a Margin Call from his brokers requesting him top up his account with more money. In this case, the investor does not only lose 50% of his initial portfolio value but also has a debt of Ghc 50,000 to pay.

It’s always good to take advantage of the money available from your brokers but you need to be aware you stand a chance of wiping out all your equity, leaving you broke or bankrupt.

The beauty of margin trading in the Ghanaian market is that, you cannot wake up over night and see prices of stocks deep so low as a result of any news as it happens on the advanced stock exchanges. Thus if you do your homework well enough, you stand a chance of making a lot more than you equity will allow you. This obviously can create a lot more activity on the Ghana Stock Exchange.

GCB recorded its 13th gain from start of the 3rd quarter on GSE

The GSE-Composite index closed mid-week's 1.99 points high, from 1,789.73 points to 1,791.72 points. The year-to-date currently stands at -10.19%.

The GSE financial stocks index closed at 1,686.52 points, up 2.87 points from 1,683.65 points.

A total volume of 0.15 million shares was traded for a sum of GHS0.03 million. The traded volume and value decline by 37.85% and 95.09% respectively. UTB and ETI were the dominant equities, accounting for 49.33% and 34.05% of traded volume and traded value respectively.

ALW bounced back from a GHS0.02 loss on Tuesday to close trading at GHS0.14. GCB recorded its 13th gain from start of the thrid quarter this year to date, to close trading at GHS3.34. PBC and UTB saw their share prices decline.

PBC & PZC saw their share prices decline leading market to fall

The GSE-Composite Index closed trading at 1,779.31 points, 1.14 points lower than the previous session. The downward movement was as a result of negative returns on two stocks. The year-to-date return on the stock market is -10.81%.

The GSE financial stock index stayed flat at 1,665.93 points.

A turnover of GHS0.73 million was recorded following the exchange of 0.13 million shares. The traded volume and value declined by 53.04% and 98.36% respectively. SIC emerged as the dominant equity, accounting for more than 70% of the trade volume and value.

PBC and PZC saw their share prices decline. No gains were recorded.

GSE-CI drops following decline in CAL stock price

The GSE-Composite Index fell 0.41 points from 1,777.33 points to 1,776.92 points, following losses on CAL share price. The resulting year-to-date return was -10.93%.

The GSE financial stock also lost ground, dropping 0.89 points to close trading at 1,652.55 points.

The total value traded was GHS13.55 million, more than twice of the mide-week's trade value of GHS5.45 million. A total of 1.67 million shares changed hands, more than 2 folds the previous session. FML traded the most shares with 95.29% of the volume traded and 99.98% of the value respectively.

FML and SIC climbed, gaining a pesewa each, while CAL saw a decline is its share price.

Courtesy: CAL Brokers Ltd

Fan Milk Ltd (FML) hits year high amid low turnover

The GSE-Composite Index recorded its fourth win in four trading days, following positive returns on FML. The index closed trading 3.63 points higher at 1,771.47 points. The year-to-date return is -11.20%.

A 0.07% dip in Standard Chartered Bank (SCB) forced the GSE financial stock index down 0.29 points, closing at 1,656.27 points from 1,656.56 points.

A total of 0.04 million share exchanged with a corresponding trade value of GHS0.01 million. The turnover and trade value was 66.53% and 82.30% less than the previous session's volume and value respectively. CAL chalked up 39.64% of the traded volume whereas FML dominated in terms of value traded, accounting for 55.05% of the trade value.

FML gain more ground, climbing to a year-high of GHS8.00 from GHS7.82.

Courtesy: CBL

GSE Stocks: My 6 Technical Picks regardless of Intrinsic Value

The Ghana Stock Exchange has been performing really bad so far this year. The GSE Composite Index is 9.20% down as at today and the GSE Financial Stock Index is even worse,  recording -11. 38% loss. It looks like there is no hope for there rest of the year although the economy is predicted to get better.
Looking through the various listed stocks,  I see a number of companies that are trading significantly lower than they used to trade in the past years when the market was performing averagely well.
Using my technical analyst's eye, I won't hesitate to buy shares in these companies knowing that when the stock market gets back booming,  they will go higher than their current market prices.

1.  HFC BANK (HFC). - HFC is currently trading at 0. 85p and has been trading lower than it has been in the past.  There could be other factors but looking at the General performance of the Financial Stocks this year,  I am hoping it will get back to the tens (that's trading around Ghc 1.2 - its current year high). 

2.  MECHANICAL LLOYD (MLC) - MLC is currently trading at 0.18p which happens to be its year low and  it recorded a year high of 0. 21p.  I have seen it trade around this range (20s range) for sometime and holding other factors constant,  It's making a nosedive due to the current pressure in the market.

3.  ALUWORKS (ALW) - ALW is currently trading at 0.09p and has probably experienced more pressure or shock from the systematic risk in the market than most companies. In the past years it has been trading in the double digits (around 0. 14p).  At a point in this year,  it went as low as 0.07p.

 

4.  ECOBANK TRANSNATIONAL INC (ETI) - ETI is currently 0.17p and heavily responsible for the market's down turn.  Trading of it is still active on the bourse and I won't hesitate to buy if my objective is long term focused. It recorded a year high of 0.27p.

5. STANDARD CHARTERED BANK (SCB) - SCB is currently trading at Ghc 15.10 and in my opinion it's quite lower than it's performance in the past years on the exchange.  Exactly a year ago,  it was trading at Ghc 20.29. There could be other factors causing it's current performance aside the risk in the economy but it's a buy for me.

6.  TOTAL PETROLEUM  (TOTAL )- TOTAL is currently trading at its year low, which is Ghc 4.3.  Last year,  it traded as high as Ghc 6.10 despite the global pressure on oil. As oil prices begin to see a improvement, we shall see how that will reflect in the price of TOTAL. 

So now you know my take based on historical performance of prices. As I mentioned,  there are alot more factors responsible for the price changes in securities on the GSE and could be why some are trading so low but my analysis did not regard any of those factors. One major systematic risk affecting the market is the attractively high returns from Government securities (e.g. Treasury bills) which serves as an alternative for investors. 

Ghana Stock Exchange Market Return History & Index Trend

For some time now I have been receiving calls and emails from friends and people, particularly MBA finance students for an access to the Ghana Stock Exchange market returns history for their various academic researches. Other analysts also request for this information but this has been missing from the website of GSE. You can get access to the full historically data of listed companies on the GSE but not that of the Composite Index or the Financial Stock Index.
The stock market has been operating since 1990 and a big thanks to Annual Reports Ghana, for capturing the year to year returns and trend of the indexes so well.  You can even get access to the time series of GSE indices upon request.

GSE Returns since inception:

click to enlarge
GSE RETURNS
Courtesy: www.annualreportsghana.com

	GSE Return		DATE	INDEX
1990	-29.75%	GSE ALL SHARE INDEX	28-Dec-90	70.25
1991	-8.18%		30-Dec-91	64.51
1992	-3.62%		29-Dec-92	62.17
1993	113.73%		30-Dec-93	132.88
1994	124.35%		30-Dec-94	298.10
1995	6.33%		29-Dec-95	316.97
1996	13.82%		30-Dec-96	360.76
1997	41.85%		31-Dec-97	511.74
1998	69.69%		30-Dec-98	868.35
1999	-15.22%		29-Dec-99	736.16
2000	16.55%		29-Dec-00	857.98
2001	11.42%		31-Dec-01	955.95
2002	45.96%		30-Dec-02	1,395.31
2003	154.67%		31-Dec-03	3,553.42
2004	91.33%		31-Dec-04	6,798.60
2005	-29.72%		30-Dec-05	4,778.07
2006	5.21%		29-Dec-06	5,026.80
2007	31.21%		31-Dec-07	6,595.63
2008	58.16%		31-Dec-08	10,431.64
2009	-46.58%		31-Dec-09	5,572.34
2010	32.25%		31-Dec-10	7,369.21
2011	-3.10%	GSE CI	30-Dec-11	969.03
2012	23.81%		31-Dec-12	1,199.72
2013	78.81%		31-Dec-13	2,145.20
2014	5.40%		31-Dec-14	2,261.02
2015	-11.77%		31-Dec-15	1,994.91

click to enlarge
GSE TREND
Courtesy: www.annualreportsghana.com

Note that, the Ghana Stock Exchange introduced the GSE COMPOSITE INDEX (a capitalisation weighted index, using VWAP of GSE-listed companies) in 2011, to replace the GSE ALL SHARE INDEX. Its base date and value is 31.12.10 and 1,000 respectively.

So now you have it. Email: info@annualreportsghana.com for more information on the Ghana Stock Exchange and Listed companies. 

STANDARD CHARTERED BANK (SCB) APPOINTS A DIRECTOR

StanChart (SCB) announces the appointment of Mr. David Adepoju, as Non-Executive Director to the Board. Read Profile https://t.co/BBbnsqhjn1

— Patrick Edem Agama (@peagama) February 15, 2016

Tullow Oil (TLW) announces an award of shares to Executive Directors

Tullow Oil announces an award of shares to some Executive Directors and PDMR under the Tullow Incentive Plan. Read: https://t.co/TY830DU4oe

— Patrick Edem Agama (@peagama) February 15, 2016

This week on Ghana Stock Exchange.

● ACI announces that the Company will hold its Annual General Meeting at the Christ The King Parish Hall, Liberation Road, Accra on Tuesday, July 21, 2015 at 10.30am.

● GGBL announces that Mr. Oladele Ajayi and Prof. Sir Joseph Woahen Acheampong resigned as Directors of the company effective May 19, 2015.

● ETI has released the attached announcement for the information of the general investing public on bonus issues.

● ETI has released the attached announcement for the information of the general investing public on ETI-RESOLUTIONS ADOPTED AT THE 27TH ANNUAL GENERAL MEETING OF JUNE 19, 2015 IN DAR ES SALAAM, TANZANIA

● TLW-SETTLES CAPITAL GAINS TAX DISPUTE IN UGANDA.
TLW has released the attached announcement for the information of the general investing public.

AngloGold Ashanti - Increase in Share Capital

AngloGold Ashanti (AGA) announces an increase in its share capital.

The issued ordinary shares of AGA increased to 404,632,679 as at April 30, 2015. This was as a result of the issue and listing of additional ordinary shares over the period on the Johannesburg Securities Exchange, South Africa.

The issued shares are as detailed below:

AGA Share Incentive Scheme (April 2015) - 126,368 ordinary shares

By this arrangement, AGA share capital has also been increased to 49,601,551,751.59 South African Rand.

Details of Mandatory Offer to shareholders of HFC

Republic Bank received acceptances of a total of 51,286,733 ordinary shares in HFC Bank representing 17.25% of the total shareholding of HFC Bank.
As at 23rd March 2015, the date of submission by Republic Bank of the Offer Document to HFC Bank, Republic Bank held a total of 118,544,368 ordinary shares.   No shares were acquired by Republic Bank during the Offer Period. 
Republic Bank Limited now holds 169,831,101 ordinary shares representing 57.11% of the issued shares of HFC Bank (Ghana) Limited.

GOIL's 46th Annual General Meeting; What you should know.

The 46th Annual General Meeting of the Shareholders of Ghana Oil Company Limited (GOIL) will be held at the Auditorium, College of Physicians and Surgeons, Ridge, Accra on Thursday, 30th April, 2015 at 11:00 am for the transaction of the following business:

AGENDA
ORDINARY BUSINESS

1. To receive and consider the reports of the Directors and the Auditors and the Financial Statements of the Company for the year ended December 31, 2014.

2.To declare a dividend for the year ended December 31, 2014. (They better declare something substantial.)

3. To elect Directors to replace retiring Directors. (You guys should consider me when electing new directors.)

4. To re-elect Directors retiring by rotation.

5. To authorise the Directors to fix the remuneration of the Auditors.

6. To fix the remuneration of the Directors.

SPECIAL BUSINESS:

7. To authorise the Company to purchase and or hold from time to time as and when it deems it prudent such number of its own ordinary shares.

TEN LARGEST SHAREHOLDERS OF GOIL

TEN LARGEST SHAREHOLDERS of GOIL (as at 2013)
Shareholders	Number of Shares	Percentage Holding (%)
1 Government Of Ghana	128,889,623	51.10
2 Social Security & National Insurance Trust	46,699,835	18.52
3 The Quantum Group Limited	22,548,383	8.94
4 Hopefield Capital Limited	4,365,420	1.73
5 Scbn/Stanchart Mauritius Re	2,785,016	1.10
6 Mr. Daniel Ofori	1,091,138	0.43
7 Edc Stock Brokers Limited	849,420	0.34
8 Scbn/Elac Policy Holders Fund	845,124	0.34
9 SCGN/RBC Hyposwiss (LUX) Fund-Africa	456,000	0.18
10 Mr Victor Kwadwo Djangmah	412,440	0.16