MTN Ghana share price doubles by 94% on GSE Composite Index

In a remarkable turn of events, MTN Group's Ghanaian unit has seen its shares nearly double on the Ghana Stock Exchange's Composite Index this year, soaring by approximately 94%. This unprecedented growth has not only boosted investor confidence in the company but has also propelled the nation's main stock index to become Africa's leading equity benchmark. Alex Boahen, the Head of Research at Data Bank, shed light on the economic dynamics that may be fueling this phenomenal market performance during an exclusive interview with CNBC Africa. Boahen highlighted the rocky economic journey Ghana has traversed in recent times, emphasizing the disruptive impact of the COVID-19 pandemic on the nation's macroeconomic indicators. Despite a less-than-ideal growth rate of 0.9% in the previous year, Ghana's economy has shown signs of recovery in the first quarter of 2021, with the Gross Domestic Product (GDP) expanding by 4%. Boahen attributed this positive trend to the government's effective management of the public health crisis and its support initiatives for the populace. However, the slow pace of vaccination rollout remains a concern, with Boahen urging for expedited efforts in this regard. Turning his focus to the stock market landscape, Boahen delved into the underlying factors driving the exceptional performance of MTN and the broader index. He noted that the market sentiment had been subdued in recent years due to various challenges, including a banking crisis and the onset of the pandemic. However, a surge in liquidity, primarily fueled by domestic pension funds and foreign investors, has significantly bolstered market activity. The attractive returns offered by fixed income assets prompted a shift towards equities, fostering increased interest in stocks like MTN. Addressing the specifics of MTN's stock performance, Boahen expressed optimism about the company's future prospects, citing its robust fundamentals and consistent dividend payouts. Despite the stock's impressive rally this year, Boahen believes there is still room for growth, given MTN's historical dividend yield of 6-10%. He attributed the stock's recent surge to stellar financial results in the first and second quarters, surpassing market expectations and driving investor demand. Transitioning to other sectors, Boahen briefly touched on AngloGold Ashanti, a mining company set to pay an interim dividend. While acknowledging limited activity surrounding the stock on the local market, Boahen highlighted its international presence and diversified listing platforms. Despite its subdued performance on the Ghana Stock Exchange, AngloGold Ashanti's global footprint positions it as a key player in the mining industry. As Ghana's stock market continues to showcase remarkable resilience and growth, investors remain optimistic about the opportunities presented by high-performing equities like MTN. With a conducive economic environment and increasing investor appetite, the Ghanaian capital market appears poised for sustained expansion and prosperity.