• Ghana’s economy posted mixed outturns in first nine months
• Yield on 182-Day T-Bill dropped to 14.11 percent.
• Accra Bourse sustained recovery mode.
• Ghana cedi outmuscled the British pound and the Euro.
• Wallstreet ended bullish as stimulus hopes heightened.
• Brent crude oil rebounded on supply disruptions.
Ghana’s economy posted mixed outturns in first nine months
Economic outturn in the first nine months of 2020 witnessed mixed outturns with most of the key economic indicators worsening their outlook due to the harsh impact of the novel virus pandemic. Gross domestic product (GDP) contracted by 3.2 percent in Q2, against a growth of 4.9 percent in Q1 of 2020. The drag is attributed to poor performances within the services and industry sectors as they suffered significantly due to the pandemic. Headline inflation resumed to double digit in April 2020 after twenty-one months of staying in the single digits. Inflation rose to 10.60 percent in April 2020 and further to 11.40 percent in July 2020 but eased to 10.50 percent in August 2020.
The impact of the pandemic on fiscal operations resulted in an expenditure overrun of GH¢56.2 billion, above the target of GH¢53.3 billion vis-à-vis a revenue generation of GH¢27.7 billion. This resulted in a negative primary balance of 3.7 percent of GDP in July 2020 as compared to the 0.0 percent of GDP a year ago and further, an overall budget deficit of 7.4 percent of GDP, against the revised target of 7.2 percent of GDP in July.
Despite these development, Ghana’s external market continues to remain bullish. A positive trade balance was recorded in the first eight months of 2020 albeit lower than a year ago. A trade surplus of $1,318.0 million representing 2.0 percent of GDP was recorded in August 2020, compared with the $1,421.0 million (2.1 percent of GDP) recorded in 2019. Economic growth is expected to rebound as economic activities strengthens, as evident in the steady growth in the Composite Index of Economic Activity of 3.6 percent in July 2020, from a negative index of 10.6 percent in May.
Key Ghana Economic Data
Indicator 2017 2018 2019 2020 2020
Inflation CPI (y-o-y %) 11.8 9.40 7.90 8.00 10.50
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 9.00
Monetary Policy Rate (%) 20.0 17.0 16.00 n/a 14.50
GDP Growth (y-o-y %) 8.5 6.3 6.5 6.8 -3.2Q2
Budget Deficit (% of GDP 5.9 3.8 4.5Sep 7.2 7.9
Public Debt (% of GDP) 69.8 57.6 63.00 n/a 68.3
Fx. Reserves (M. Cover) 4.3 3.7 4.1 ?3.5 4.0
Source: BOG; MOFEP; GSS. * represents provisional estimate
Government of Ghana Treasury Securities
Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Oct 12 – 16 14.05 14.11 16.98 18.50 19.00 19.25
Oct 05 – 09 14.05 14.14 16.98 18.50 19.00 19.25
Sep 28 – Oct 2 14.04 14.15 16.99 18.25 19.00 19.25
2020 Yr. Open 14.70 15.15 17.90 20.95 19.70 19.50
NB: The above are the annual yields on Government of Ghana Treasury Securities.
At the end of last Friday’s auction, the yield on the 182-Day T-Bill dipped by 3 basis points to 14.11 percent. Interest rate on the 91-Day T-Bill, however, was unchanged at 14.05 percent. The yield on the 364-Day T-Bill was unchanged at 16.98 percent as it was not scheduled for the week’s auction. Similarly, interest rates on the Government of Ghana treasury notes and bonds were also unchanged as they were not part of the week’s auctions.
Results of Auction held on 9th October, 2020
Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 854.10 854.10 14.0536
182-Day T-Bill 65.24 65.24 14.1092
Government accepted all the tendered bids at the auction. A total of GHS919.34 million worth of bids was raised at the auction, exceeding the week’s target of GHS876.00 million and GHS821.21 million raised at the previous week’s auction. The 91-Day T-Bill dominated Government’s purchase, constituting 92.90 percent of the overall bids raised. The Government anticipates raising a total of GHS733.00 million from the issuance of the short-dated treasury securities at the upcoming auction.
The term structure of the Government of Ghana treasury securities sustained its normality following the general positive sloping nature of the curve. The continued risk aversion of investors sparking high demand for safe-haven assets, amidst the relative robustness of the Ghanaian economic despite the COVID-19 threats, are factors underpinning the normality in the yield curve.
Ghana Stock Exchange
Ghana Stock Exchange (GSE) Indices (YTD %)
Year 2016 2017 2018 2019 2020
GSE-CI -15.33 52.73 -0.29 -12.25 -17.40
GSE-FSI -19.93 49.51 -6.79 -6.23 -15.80
The Accra Bourse posted another round of week-on-week gain as positive sentiment begins to pick up after the decision by Government to fully pay depositors of revoked finance houses in cash instead of the 5-year zero-coupon bonds. The gradual uptick in demand for some blue-chips stocks in the week under review closed the market indices slightly higher to erase portions of it loses. The GSE Composite Index thus recorded a weekly gain of 1.01 percent as it settled at 1,864.32 points last Friday. The year-to-date loss of the index thus reduced to 17.40 percent. The GSE Financial Stocks Index also rose by 1.39 percent to 1,700.50 points on Friday, representing a year-to-date loss of 15.80 percent.
GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 7.39 11.46 55.01
Total Value Traded (GHS M) 7.87 8.06 2.40
Market Cap (GHS M) 53,045.37 53,297.46 0.48
Market turnout witnessed an improvement over the previous week’s trade. A total of 11.46 million shares valued at GHS8.066 million exchanged hands as compared with the 7.39 million valued at GHS7.87 million recorded at the week ended 2nd October 2020. MTN Ghana Ltd led the activity chart in terms of volume, contributing 91.22 percent of the overall traded volume. It also dominated in value with an amount of GHS6.27 million. The GSE Market Capitalization also improved by 0.48 percent to GHS53,297.46 million at the end of the week’s trade.
Stock Price Movements
In all, five equities appeared on the movers list, three advancers and two decliners. Standard Chartered Bank Ltd led the bulls run with a price uplift of GHS1.00 to trade at GHS15.00 per share. MTN Ghana Ltd and Fan Milk Ltd gained a pesewa each to trade at 61 pesewas and GHS1.05 per share, respectively.
Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
SCB 18.40 14.00 15.00 1.00 7.14
FML 4.12 1.04 1.05 0.01 0.96
MTNGH 0.70 0.60 0.61 0.01 1.67
On the flip side of the market, Unilever Ghana Ltd dropped by GHS1.00 to trade at GHS9.21 per share. Benso Oil Palm Plantation Ltd also eased by a pesewa to trade at GHS2.10 per share.
Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
BOPP 2.86 2.11 2.10 -0.01 -0.47
UNIL 16.40 10.21 9.21 -1.00 -9.79
Currency Buying Selling Currency Buying Selling
USD 5.7003 5.7061 CAD 4.3385 4.3424
GBP 7.4110 7.4190 CFA 97.2927 97.3793
EUR 6.7361 6.7421 JPY 0.0540 0.0540
AUD 4.1205 4.1257 ZAR 0.3463 0.3467
NGN 67.1553 67.3306 CNY 0.8514 0.8522
Source: Bank of Ghana 09.10.2020
On the interbank forex market, the Ghana Cedi appreciated against the British Pound and the Euro but traded flat versus the US Dollar. The US Dollar sank as prospects of a new stimulus package and a win by presidential aspirant-Joe Biden, trimmed demand for the dollar. The renewed hopes that US lawmakers will agree on a new covid-19 relief package and the increased investors’ short bets for the Democrat presidential candidate – Joe Baiden to win the upcoming election affected the greenback’s outturn on the international front. The US dollar thus changed by 0.01 percent to trade at GHS5.71 against the cedi, as the latter gained support from the $525 million forex injection by the Bank of Ghana. The year-to-date depreciation of the cedi thus stood at 2.97 percent.
The British Pound lost its footing on the international currency weighed by Brexit uncertainties and fears of an escalation in covid-19 cases in the UK. Investors braced for a likely no-deal Brexit as hopes of the UK government reaching a compromise with the EU ahead of the end of the transitional period of December 31, faded. On the back of this, the British Pound depreciated by 0.50 percent on interbank currency market to sell at GHS7.42. The year-to-date depreciation of the cedi thus narrowed to 1.33. percent.
The Euro edged lower as investors reacted to a dovish assessment of the bloc’s economic outlook by the European Central Bank. Data signalling weak inflationary pressures and slowness in economic recovery in the Eurozone was highlighted by the central bank in the week-under-review. In addressing this, it’s considering adopting more stimulus initiatives such as Quantitative easing to deal with the persistently weak inflation and downside risks to ensure price stability. The euro thus depreciated by 0.83 percent to sell at GHS6.74 on the interbank currency market. The year-to-date depreciation of the cedi thus narrowed to 7.85 percent.
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,348.44 3,477.13 3.84 7.63
DJIA 27,682.81 28,586.90 3.27 0.17
FTSE 100 5,902.12 6,016.65 1.94 -20.23
NIKKEI 225 23,029.90 23,619.69 2.56 -0.16
FTSE/JSEAllShare 54,219.24 55,182.99 1.78 -3.33
NSE All Share 23,029.90 28,415.31 23.38 5.86
Nairobi All Share 140.22 140.07 -0.11 -15.83
Wallstreet surged to a two-month high as news of a proposed $1.8 trillion stimulus package for the US to shore its economy boosted equity demand. The S&P 500 thus recorded a week-on-week gain of 3.84 percent to trade at an index level of 3,477.13 points. In a similar vein, the Dow Jones Industrial Average also advanced by 3.27 percent to settle at 28,586.90 points.
The London Stock Exchange edged up as investors reacted to the roll-out of an intended Job Support Scheme. UK’s finance minister – Rishi Sunak in the week under review announced Government’s plan to alleviate the economic burden on businesses and employees affected by the covid-19 pandemic through the Job Support Scheme. The FTSE 100, riding on this, upped by 1.94 percent to close at 6,016.65 points.
The Asian equity market surged following the release of upbeat economic data in the region. China’s Caixin/Markit services Purchasing Managers’ Index for September crossed the 50-point mark as it hit 54.8, signifying expansion in the services sector. The Nikkei 225 thus traded 2.56 percent higher at 23,619.69 points in the trading week.
On the African equity market, the Johannesburg All Share Index recorded a week-on-week gain of 1.78 percent to settle at 55,182.99 points. The Nigerian All Share Index also recorded a week-on-week gain of 23.38 percent to settle at 28,415.31 points. The Nairobi All Share Index, on the downside, slumped by 0.11 percent to close at 140.07 points.
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 39.27 42.85 9.12 -35.08
Gold $/ounce 1,907.60 1,926.20 0.98 26.47
Cocoa$/metric tonne 2,482.00 2,432.00 -2.01 -4.25
Coffee $/pound 1.0895 1.1155 2.39 -13.99
Source:www.bloomberg.com, & www.investing.com -
Brent crude oil posted a weekly gain on the international commodities market despite market imbalances created by the viral pandemic. This was spurred by the surge in the unit price of the energy commodity in the week under review, following supply outages emanating from a storm in the Guld of Mexico and production disruption in Norway. The harsh impact of the Hurricane Delta in Mexico forced producers to shut 1.69 million barrels per day and the strike of offshore workers in Norway affected the availability of the energy commodity on the international market. Brent crude oil thus gained $3.58 to trade at $42.85 per barrel.
Gold upped its unit price after the week’s trade on the international commodities market, supported by the growing expectations for an approval of the stimulus package laid before the US House of Senate. The yellow metal also benefitted from the softness of the US dollar against major peers as investors rode on this development to demand more of the metal. Gold thus added $18.60 to trade at $1,926.20 per ounce.
Cocoa dropped further as the supply-side continued to keep the market imbalanced. The improved climatic conditions with rainfall occurring in most cocoa growing communities in Ivory Coast lifted the outlook of the soft crop despite measures adopted by the Ivorian Government to expand its grinding firms. Cocoa thus shed $50.00 to close at $2,432.00 per metric tonne.
Coffee rose marginally on the international market as dry weather conditions threatened production in Brazil. The above-average temperatures and lack of adequate rainfall in Brazil’s largest coffee-growing region – Minas Gerais negatively affected the outlook of the crop. Coffee thus added 3 cents to trade at $1.12 per pound.
Note: The data in this publication is Friday on Friday (w/w)