Activity remained slack on the GSE on Wednesday, with just 9 issues traded. No price movements were recorded, so the All-Share Index held steady at 819.31.
The only trade of interest was dealing in excess of 580,000 shares in SSB Ltd. The last traded price was unchanged at 1662 cedis, but the high bid price was slightly up at 1665, and bid exceeded offered at 593,600 against 589,100 offered.
Ghana Commercial Bank saw a trade, 5200 shares at 1000 cedis. The low offer price has been cut to 900 cedis, with a block of 262,200 shares overhanging the market. GCB had a share repurchase plan approved last year, but there is no sign of the company moving in to bolster its own price.
No other trade exceeded 1500 shares. A line of 1.2m shares in Aluworks was offered into the market at 2800 cedis, of which 1500 were snapped up.
The Aluworks Ltd annual report has been received by this column - and depressing reading it makes. Sales by volume were flat last year, at 16,821 tonnes against 16,827 in 1997. In the face of power shortages during the first half of the year this must be rated an achievement, to maintain production, but domestic demand fell by 12.5% and sales were maintained by a 100% increase in export sales. The balance sheet is strongly improved, with assets up from 45.5b cedis to 51.2b cedis. A worrying sign however is a more than 50% increase in Stocks from 12b to 19b cedis.
The annual report gives further evidence of just how peripheral the Stock Exchange is to the economic life of Ghana. The company records 731 shareholders, of whom the top 20 hold 80.52% of the shares. Just 497 shareholders own 1000 shares or less. The report carries a long paragraph explaining that the share price opened 1998 at 2500 cedis and rose to 3550 in May last year before falling back to close unchanged. The Board is arranging with NTHC Ltd the Brokers to work towards an all year round demand for your Company's shares to ensure that there is a constant appreciable return on your equity. Once again, this column will be told that it is out of touch with the peculiarities of the Ghana market, but the Board really should stick to its knitting. Get production and sales up and make sure the company's growth continues. In the past fortnight the FT-SE African Gold mining share index has fallen by 17.5%. This follows a 25% rise in the previous quarter. There is very little reason for this. Admittedly the gold price is now at a 20 year low, following the announcement that the British government is to sell half its gold reserves, but the gold price has been in a gradual long-term decline.
Any number of shares on the London Exchange fluctuate by as much as 80% in the course of a year. It is this volatility that attracts traders, people who want to buy and sell. Ghana needs more issues - even the tiny island of Mauritius can boast more quoted stocks than Ghana, and there have been no IPOs since the Aluworks issue in 1996.
The "optimism index" held steady at 4. Shares offered continued to swamp bids at 3.43m to 1.63m.
There were no trades in the bond market.
