Ghana’s `Forgotten’ Stock Market Beats World Equities (Update1)

By Janice Kew and Emily Bowers

Oct. 30 (Bloomberg) — Vendors hawking handbags and fruit along downtown Accra’s Liberia Road are busier than the traders five tales upstairs on the Ghana Stock Exchange.

An offshore-oil discovery, rising commodity prices and government spending on roads and other projects drove the market to a 63 percent gain this year, making it the world’s best- performing bourse.

Then volume on the market fell to 23,875 shares daily over the last four weeks, a 20th of the average for the past six months. This left investors unable to flee even as stocks in nearby Nigeria declined 44 percent since March 5. On some days, nearly no shares have changed hands in the Cedi Household Building.

“It’s hard to call it a stock market because of the liquidity levels,” said Don Elefson, an emerging-markets specialist at Harding Loevner Management in Somerville, New Jersey. “Ghana’s a small market that gets forgotten.”

The path of Ghana’s All-Share Index diverged from the Merrill Lynch African Lions Index on March 5, climbing 54 percent as the broader measure of bourses started a 60 percent plunge.

“Ghana missed out on the initial Africa bull run and is now playing catch-up,” said Cape Town-based Roelof Horne, who helps manage billion in Investec’s Africa Fund and Pan-Africa Fund.

Stock-market development in the country of 22.5 million, sandwiched between Togo and Ivory Coast, has trailed neighbors such as Nigeria. The Lagos exchange has 219 listed companies and a valuation of about 10 trillion naira ( billion) as of September, compared with Accra’s 34 listed companies worth 18.1 billion cedis (.5 billion).

Ghana’s All-Share Index now lost 0.1 percent to 10,788.29, while Nigeria’s benchmark tumbled 3.5 percent.

Electronic Trading

Unlike Nigeria, Ghana doesn’t have electronic trading, according to the market’s Web site. Traders scribble bid and asking prices on whiteboards. That’s forecast to exchange before the end of the year, according to the exchange’s general administrator, Ekow Afedzie.

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