Ghana Stock Exchange said to be world’s most poorly performing stock market – Report

The Ghana Stock Exchange (GSE) performed poorly among all stock markets in the world in 2009 during the global financial crisis, a new report says.

The report, Financing Africa through the Crisis and Beyond, was prepared by the African Development Bank (AfDB), the World Bank and the German Federal Ministry for Economic Cooperation and Development.

Under the subtitle “Performance on selected stock markets during 2008–09”, the report co-authored by Thorsten Beck, Samuel Munzele Maimbo, Issa Faye and Thouraya Triki said “In Ghana, the Ghana Stock Exchange all-share index, which had experienced an impressive 64% increase between January and October 2008, while stock markets around the world were collapsing, lost almost 46.6% during 2009, making it the world’s most poorly performing stock market over this period.”

The report explains that the effect of the financial crisis was worsened by the migration to a new automated trading system to which investors needed time to adjust and the rise in domestic interest rates, which made money market instruments more attractive.

“Domestic mutual funds were under pressure as investor redemptions could not be offset by sales in the illiquid equity markets; indeed, at least one fund had to borrow for redemptions,” said the report.

In Ghana, the report noted that bank lessors sourced more than 75% of the new leases in 2007 and held 65% of the market share.

It said Ghana had five new equity listings in 2004.

By Ekow Quandzie