equitiesghanaportfolio insightsStrategy

27 January 2022

Bull’s Eye: Painting a silver lining on sombre clouds

In brief

  • The Ghanaian equity market has rallied significantly since the start of the year and as a result, our equity portfolio has returned more than 46.0%
  • In our opinion, a relatively stable currency, a refocus on fundamentals and poor risk-adjusted returns in money market securities have supported bullish sentiments despite the fragile macro backdrop
  •  After such a rally, we admit that we are tempted to cash in our chips while we are ahead. However, being value investors, we still see some upside from current levels despite our view of a weaker macroeconomic outlook
  • We see four key themes emerge as we look beyond 4Q2021?
    • How sustainable is the rally and is there more upside in MTNGH?
    • Can the new pensions regulations provide some support amid a decline in global liquidity?
    • Consumption has improved due to successful vaccination rates but are our consumer stocks are overpriced?
    • Banks will drive the next rally as asset quality improves and credit expands
  • The market appears fully priced but we see plenty of interesting long-term themes and attractive opportunities where research-focused value investors can differentiate among winners and losers