GSE WEEK FROM 09-03-20 TO 13-03-20 AND CORONA VIRUS

 

GSE WEEK FROM 09-03-20 TO 13-03-20 AND CORONA VIRUS WAS SOMEWHAT BORING AGAIN.MOVEMENTS WERE WITHIN A RATHER NARROW RANGE. BUT THAT CAN CHANGE IN THE NEXT FEW WEEKS, AS THE FIRST CORONA VIRUS CASES APPEARED IN GHANA. WILL IT CHANGE?

EXPERIENCE FROM OTHER STOCK MARKETS HAVE SHOWN THAT MANY FINANCIAL MARKETS REACT ON THE VIRUS WITH MUCH VOLATILITY. REMEMBER, VOLATILITY IS DEFINED AS FOLLOWS.

Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index.

In the securities markets, volatility is (we)often associate volatility with big swings in either direction. For example, when the stock market rises and falls more than one percent over a sustained period of time, it is called a “volatile” market. An asset’s volatility is a key factor when pricing options contracts.

https://www.investopedia.com/terms/v/volatility.asp

THAT SIMPLY MEANS THAT VOLATILITY TS A FAST AND UNPREDICTABLE CHANGE, MOSTLY IN THE NEGATIVE. OFTEN, THE ECONOMIC EFFECTS OF THE VIRUS ONLY MULTIPLY TRENDS WHICH ARE ALREADY PREVALENT IN THE GIVEN COUNTRY. THIS IS THE CASE, E.G., IN THE UNITED STATES, WHERE THE EARNINGS OF LISTED COMPANIES WERE ALREADY ON THE DOWNTURN.

OF COURSE, THE VIRUS WILL PROBABLY ALSO AFFECT THE GHANAIAN FINANCIAL MARKETS IN ONE WAY OR THE OTHER. THIS IS ESPECIALLY TRUE AS GOVERNMENT ANNOUNCED VARIOUS RESTRICTIONS. BY ALL MEANS, THESE RESTRICTIONS WILL AFFECT THE PROFITS OF GHANAIAN FIRMS.

ECONOMIC DEVELOPMENTS HAVE ALREADY AFFECTED OUR ECONOMY NEGATIVELY. OIL PRICES HAVE GONE DOWN BECAUSE OR QUARRELS WITHIN THE OPEC+ RUSSIA AND OTYTHERS. EVEN THE GOLD PRICE WENT DOWN SOMEWHAT. IN A WAY, THAT WAS SURPRISING, AS USUALLY GOLD IS A “SAFE HAVEN”. BUT, IN THIS CASE FIRMS AND GOVERNMENTS WENT OUT OF GOLD AND WENT INTO CASH. THIS IS BECAUSE MANY OF THEM WANT TO COMPENSATE POSSIBLE LOSSES DUE TO THE VIRUS.

NEVERTHELESS, I DON’T SEE ANY REASON FOR A FINANCIAL PANIC, AS I DON’T SEE A REASON FOR A HEALTH PANIC. FIRST OF ALL, OUR CONSUMPTION SHOULD GO ON AS USUAL, ALTHOUGH WITH SOME RESTRICTIONS. WE MUST LIVE WITH ECONOMIC RESTRICTIONS FOR SOME TIME, AS WE MUST LIVE WITH HEALTH RESTRICTIONS.

ON THE OTHER HAND, ANY HEALTH CRISIS IN A COUNTRY GIVES THE OPPORTUNITY FOR A NEW BEGINNING. WE WILL HAVE NEW DEVELPMENTS WHEN THE CORONA CRISIS IS OVER. THESE NEW DEVELOPMENTS WILL GIVE NEW INVESTMENT OPPORTUNITIES. AS GHANA IS ONE OF THE COUNTRIES IN AFRICA INVESTORS PREFER, NEW MONIES WILL FLOW INTO THE COUNTRY. AFTER THE DARKNESS OF THE CORONA VIRUS CRISIS, SUNSHINE WILL COME AGAIN OVER THE GHANAIAN ECONOMY, AND THEREFORE, OVER THE GHANAIAN PEOPLE.

SO, GSE WEEK FROM 09-03-20 TO 13-03-20 AND CORONA VIRUS MIGHT HAVE A NEGATIVE EFFECT ON THE ECONOMY AND THE FINANCIAL MARKETS. BUT THAT WILL ONLY BE IN THE SHORT TERM. IN THE MEDIUM AND LONG TERM, A NEW BEGINNING WILL HAVE A POSITIVE EFFECT ON THE GHANAIAN ECONOMY AND THE FINANCIAL MARKETS HERE.

STAY TUNED FOR NEW DEVELOPMENTS!

 

 

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