The stock market rally is expected to continue through the second and third quarters of 2025, driven by favorable corporate earnings and a recovery in economic activity.
According to Databank Research, given these positive backdrops, it reiterates it expectation of the Ghana Stock Exchange-Composite Index (GSE-CI) closing around 6,850 points by the end of 2025, translating to 45%±500bps.
Also, the Consumer Confidence Index (CCI) and Business Confidence Index (BCI) have both increased significantly to around 100 points, which was last seen pre-Covid.
“We believe these indicators reflect the rebound in consumer spending, which is expected to anchor organic growth in most listed companies across various sectors, thus boosting investor appetite for equities”, it said.
Medium-Term Tailwinds for Growth in Equities Market
Databank Research continued that the agricultural and roll out of the “Big Push” initiatives is likely to bolster rural economic activities, injecting income and improving spending. This will be positive for topline growth for most FMCGs.
“Based on the government’s 2025 budget, we estimate about GH¢2 billion in direct flows to rural areas. In our view, this uplift in rural economies will likely translate into increased consumption, especially across fast-moving consumer goods (FMCG) categories”.
As rural households experience improved cash flows, the demand for essential and semi-essential goods is expected to rise, presenting a near- to medium-term tailwind for topline growth for FMCG companies. It also said affordable borrowing costs for consumers may likely improve household disposable income to aid spending and topline growth for some listed stocks.
“We believe the government’s plans to trim high interest rates may translate to affordable borrowing costs for consumers. This could complement existing household wallets while improving consumer confidence as they feel more financially stable with lower debt servicing costs”, it added.
With strong consumer confidence, FMCGs can have better pricing to drive volume growth and expand margins, consequently boosting earnings outlook.
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