The Head of Brokerage at Ecobank Development Corporation (EDC), Mahama Iddrisu has blamed the continuous depreciation of the cedi against major foreign currencies to the poor performance of the Ghana Stock Exchange (GSE) this year.
Ghana’s Stock Exchange has been ranked as the third worst performing market in Africa coming third after Mauritius and Zambia which were the worst markets in Africa. The Africa Quarterly Report ranks performance of stock markets in Africa in terms of returns to investors in dollars.
Speaking to Citi Business News Mahama Iddrisu said government must support Ghanaian manufacturing companies by reducing the high tariffs on imports and exports.
“If I change a $100,000 and buy a company listed, in the next six months what is the return am looking at. The price might not have changed or I would have experience some loses which is the exchange loses which is largely due to the depreciation of the cedi, fund managers representing firms outside Ghana are not buying which means we are not able to see some growth and see any appreciation of the price that affect the all share index.
The depreciation of the cedi is an outcome of how the economy is managed. So is the general economic performance that affect the foreign currency which investors use to buy the stocks on the market that is having the stock market perform that well”
He adds that ‘the manufacturing sector is currently the worst performing sector on the stock market due to the several taxes that they are charged with and therefore if something can be done to ease the pressure which affect them to reduce their cost of operation which is one of the thing the foreign investors are looking at then their stocks will perform better’.
According to Mahama Iddrisu though manufacturing companies were greatly affected by the decline of the cedi on the stock exchange, banks continue to benefits greatly from the setbacks.
“The ones we see performing well are the banks because whether the economy is good or bad the banks would always churn out profit depending on what product and what management they have in place. This year at half year the banks have made what they made full year in 2013 as profit.”