Ghana's stock exchange was the best performing market in the world in 2008 but has suffered this year in the global economic crisis. Now, an oil boom is putting the west African nation back on track.
After rising 58.06 percent in 2008, the Ghana Stock Exchange (GSE) has fallen 47.87 percent so far this year as foreign investors shunned assets considered risky while local investors sought refuge in short-term securities.
Market observers say the bourse will bounce back in the year ahead as Ghana prepares to pump out oil for the first time, with interest rate cuts, a strong local currency, the cedi, and falling inflation also boosting confidence.
"We are expecting GSE All-Share index to climb to about 35 percent as commercial oil production will commence in the last quarter of next year," Edem Dewortor, a stock analyst with Ecobank Development Corporation, told AFP. The GSE-All Share index gained 2.04 percent from Monday to Thursday last week before closing for Christmas break.
"The outlook for the Ghanaian bourse next year is very bright as the local currency is holding against the major international trading currencies and inflation is on the decline," said analyst Collins Appiah of Gold Coast Securities. Appiah said part of the reason for the recent decline of the stock market was that it was overpriced in 2008 and had to adjust in 2009, commenting: "It is natural that the market reacts to this by correcting itself." The global financial meltdown has also impacted negatively on Ghana's stocks as well as bringing down financial markets across Africa, dealers said.