Databank report shows Covid-19 crushed Ghana’s feeble stock market

A report from Databank shows that Ghana's stock market is currently facing challenges due to the coronavirus - The market has reported its lowest turnover yet with a contribution of 14.8% as compared to 56.5% recorded in January and 28.6%s in February in 2020 - The downturn is also expected to be worsened by the upcoming.

A Databank research has proven that Ghana’s stock market has experienced a downturn since the outbreak of the coronavirus.

Information available shows that a substantial portion of the market has been wiped out since Ghana recorded its first case in March 2020. The Databank report, which analyzed the economy for 2020’s first quarter, revealed that the market had its lowest turnover with a contribution of 14.8% as compared to 56.5% recorded in January and 28.6% in February in 2020. Per a report by thebtfonline.com, the price-to-earnings (P/E) ratio, which determines the market value for stocks on the trading platform, remains grossly undervalued at 5.58x on a trailing 12-months basis, which is significantly lower than the historical average P/E of 11x. This implies that the average investor is now willing to pay only 5 times the price of a stock for a company’s earnings, compared to a previous 11 times. The report goes on to say that the Ghana Stock Exchange Composite Index is expected to close this year with a loss of 12% or even lower as the pandemic is envisaged to dominate market sentiments until there is clear visibility on how it will be contained and the extent on its direct economic impact is determined.

Source : yen.com

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