Stock market analysts are projecting that the current distortions on the local bourse may continue until such a time that MTN completes its Initial Public Offering (IPO).
The stock market’s performance has seen a dip for the past couple of weeks which is affecting trading activities.
Some have blamed the development on the massive nature of the MTN IPO.
The IPO which was launched on May 29 2018, is expected to end on July 31, 2018.
Analysts Citi Business News has been engaging reveal that some existing shareholders have sold up their shares to buy into MTN’s shares.
The volume and size of the IPO also means that investors will have to commit huge investments if they are to benefit greatly from the offer.
An Associate of Equity Trading at UMB Stockbrokers, Kofi Busia Kyei explained the dynamics on the market thus far.
“Most of the amount that we are expecting to go into the general stock market or the other listed companies, they are all being channelled into purchase of MTN shares…A year to date analysis, for instance, shows that the market has even dropped to about 11 percent compared to the over 20 percent which was recorded before MTN launched its shares,” he emphasized.
Finance Minister Ken Ofori Atta has also alluded to the impact of the IPO on the cedi’s performance and other investment markets.
The development has also affected the growth in shares of listed companies especially listed banks who are seeking to raise funds from the market to meet the minimum capital requirement.
But it seems all hope is not lost and there are opportunities for a positive outturn on the stock market.
First, if MTN lists its proceeds on the bourse, it will improve activities.
Also, pension fund managers are expected to buy into shares with proceeds from their operations.
According to Kofi Busia Kyei, such expectations should keep the performance of the local bourse in the positive until the end of the year .
“We are expecting the market to rebound right after the MTN IPO; we are expecting that once the big company [MTN] starts trading, the market will benefit from that…Interest rates and inflation are still on the low and the market is not expected to go into the negative this year whatever happens,” he observed.