GSE: Capital gains tax imposition causes 8.8% YTD loss on local bourse
“The GSE-CI fell, on year-on-year basis, due to shifts in investor preference to fixed income securities as yields on fixed income securities became relatively more attractive. In addition, exchange rate pressures and portfolio reversals have impacted negatively on performance of the stock market.
Year-to-date performance of the Ghana Stock Exchange (GSE) – as at end-June 2022 – stood at 8.8%.
The recorded year-to-date loss in the prices of equities listed on the bourse according to the Central Bank was mainly due to the imposition of capital gains tax on securities, inducing some investors to switch to Government securities.
Additionally, the application of E-Levy on investment transactions has also created a disincentive for investors, the BoG noted.
Other factors included relatively higher yields on fixed income securities and uncertainty induced by inflation and exchange rate pressures, as well as portfolio reversals.
“The GSE-CI fell, on year-on-year basis, due to shifts in investor preference to fixed income securities as yields on fixed income securities became relatively more attractive. In addition, exchange rate pressures and portfolio reversals have impacted negatively on performance of the stock market.
“The financial sector stocks, however, showed resilience to these developments, on the back of sustained financial performance,” said the BoG in its 107th Monetary Policy Report.
The Ghana Stock Exchange Composite Index (GSE-CI) decreased to 2545.48 points in June 2022 from 2643.67 points recorded in the corresponding period of 2021.
This translated into a year-on-year loss of 3.7 percent in June 2022 compared to a gain of 39.2 percent in June 2021.
The GSE-Financial Stocks Index (GSE-FSI) closed at 2176.97 points, representing a gain of 16.3 percent compared to a gain of 8.5 percent over the same comparative period in 2021.
Total market capitalisation of the GSE at the end of June 2022 was GH¢64.84 billion, representing a growth of 5.7 percent (GH¢3.51 billion), compared with a growth 15.8 percent (GH¢8.61 billion) in June 2021.
On year-to-date basis, total market capitalization increased by 0.54 percent. The marginal improvement in market capitalization was largely on account of the listing of Ashanti Gold Corporation (ASG).
Source: norvanreports.com
