Weekly Highlights

• 91-Day and 182-Day T- Bills both dipped by a basis point.
• Accra Bourse kicked start new year on a positive note.
• Ghana cedi outmuscled both the British pound and Euro.
• International equity markets kicked start 2021 on a positive note.
• Brent crude oil advanced but Gold, Cocoa and Coffee tumbled.

Macroeconomic update

Key Ghana Economic Data

Indicator 2017 2018 2019 2020 2020
Target Actual
Inflation CPI (y-o-y %) 11.8 9.40 7.90 8.00 9.80
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 8.40
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 -1.1 Q3
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 ** data yet to be released by MoF

Government of Ghana Treasury Securities
Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Jan 11 – 15 14.09 14.14 16.96 18.50 19.25 19.85
Jan 04 – 08 14.10 14.15 16.96 18.50 19.25 19.85
Dec 28 – Jan01 14.09 14.12 17.00 18.50 19.25 19.85
2021 Yr. Open 14.09 14.12 17.00 18.50 19.25 19.85
NB: The above are the annual yields on Government of Ghana Treasury Securities.

Interest rates on the Government of Ghana treasury securities eased marginally at the week’s auction. The yield on the 91-Day T-Bill dipped by a basis point to settle at 14.09 percent. That on the 182-Day T-Bill also moderated by 14.14 basis points to close at 14.14 percent. The yield on the 364-Day T-Bill was, however, unchanged at 16.96 percent as it was not scheduled for the week’s auction. Yields on the Government Bonds and Notes were also unaltered.

Results of Auction held on 8th January, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 951.28 951.28 14.0930
182-Day T-Bill 122.19 122.19 14.1438

All the GHS1,073.47 million worth of bids tendered by investors at the week’s auction were all accepted by the Government of Ghana. The amount raised outpaced the GHS987.00 million targeted for the week’s auction and the GHS739.100 million raised at the previous auction. The 91-Day T-Bill dominated Government’s purchase, constituting 88.62 percent of the total bids raised. It is in the expectation of Government to raise GHS756.00 million worth of bids at the upcoming auction through the issuance of both 91-Day, 182-Day, and 364-Day T-Bills at the upcoming auction.

Illustrated in the chart above is the term structure of the Government of Ghana treasury securities. The yield curve extended its normality into the new year following the general uptrend of the curve as yields on long dated treasury instruments are generally competitive to their short-dated counterparts. The general bullishness of the market following its safe-haven nature to risk adverse investors coupled with rising demand for funds by Government are factors underpinning the normality of the curve.

Ghana Stock Exchange

Ghana Stock Exchange (GSE) Indices (YTD %)
Year 2017 2018 2019 2020 2021
GSE-CI 52.73 -0.29 -12.25 -13.98 0.73
GSE-FSI 49.51 -6.79 -6.23 -11.73 0.25

The Ghana Stocks Exchange kicked start the new year on a positive note as it extended its strong recovery witnessed in the last month of 2020. The significant rebound which led to a 28 percent reduction in the year-to-date losses of the benchmark index in 2020 hung upon recovery in business and economic sentiments. The GSE Composite Index thus finished with a year-to-date gain of 0.73 percent as it settled at 1,955.78 points. The GSE Financial Composite Index, similarly, rose by 0.25 percent as it settled at 1,787.20 points.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 30.22 70.21 132.33
Total Value Traded (GHS M) 13.60 46.03 238.49
Market Cap (GHS M) 54,374.88 54,549.91 0.32

A total of 30.22 million shares valued at GHS70.21 million exchanged hands. This represents 132. percent increment from the previous week’s trades of 30.22 million valued at GHS13.60 million. MTN Ghana Ltd was the most actively traded stocks, accounting for 132.33 percent of the total traded volume. Market capitalization also posted a weekly gain of 0.32 percent as it ended the week’s trade at GHS54,549.91 million.

Stock Price Movements

At the paring of the week’s closing prices to the 2021’s opening prices, two equities altered their share prices; with no laggard recorded. Standard Chartered Bank Ltd led the gainers with a price uplift of 19 pesewas to trade at GHS16.50 per share. MTN Ghana Ltd also added a pesewa to trade at 65 pesewas per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
MTNGH 0.64 0.64 0.65 0.01 1.56
SCB 16.31 16.31 16.50 0.19 1.16

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7576 5.7634 CAD 4.5322 4.5365
GBP 7.8108 7.8192 CFA 93.0185 93.1096
EUR 7.0450 7.0519 JPY 0.0554 0.0554
AUD 4.4678 4.4734 ZAR 0.3763 0.3766
NGN 66.8345 67.1817 CNY 0.8893 0.8900
Source: Bank of Ghana 08.01.2021

The Ghana cedi outmuscled both the British pound and Euro but lost to the US dollar. The US dollar dropped to its lowest in three years following post-election uncertainties which affected investors bet for the currency. Among such developments were impeachment on President Trump after a second time indicating that the US election was fraud and anticipated nature of US governance system after the Democrats won effective control of the Senate. Despite the US dollar outturn, it recorded a week-on-week gain of 0.01 percent with a selling price of GHS5.76 on the interbank currency market.

The British pound dimmed its appeal on the international forex market as the second wave of the COVID-19 pandemic casted doubt about recovery of the UK economy. Soaring COVID-19 cases in the UK, instigating another round of lockdowns have further darkened already dim growth prospects. This is expected to underpin next monetary policy review of the Bank of England to push interest rates below zero to support the economy. The British pound thus recorded a week-on-week depreciation of 0.76 percent as it trimmed its selling price to GHS7.82 on the interbank currency market.

The Euro finished the trading week in the gains despite some disappointing data from the bloc. The Euro benefitted from the dollar’s and pound’s weakness on the international currency market, as investors ignored contractionary services data from Germany and the Eurozone with PMI’s below the 50-point benchmark, to demand more of the shared currency. The Euro also benefitted from surprised uplift in Eurozone’s retails sales as in rose nearly by 2 percent in November 2020 compared to a contraction of 2 percent in October 2020. Despite the Euro gains, it ended with a weekly depreciation of 0.22 percent at as it buoyed its selling price to GHS7.05 on Friday on the local currency market.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,756.07 3,824.68 1.83 1.83
DJIA 30,606.48 31,097.97 1.61 1.61
FTSE 100 6,460.52 6,873.26 6.39 6.39
NIKKEI 225 27,444.17 28,139.03 2.53 2.53
FTSE/JSEAllShare 59,408.68 63,519.18 6.92 6.92
NSE All Share 40,270.72 40,123.71 -0.37 -0.37
Nairobi All Share 152.11 154.18 1.36 1.36

The US equity market finished the first trading week in the new-year on a positive note as economic plans by the US – President elect – Joe Biden is anticipated to improve economic fortunes of the world largest economy. Plans to spend trillions of US dollars on all sectors of the US economy including unemployment, insurance and rent buoyed market sentiment to close the market in the gains. The S&P 500 thus gained 1.83 percent to settle at an index level of 3,824.68 points. The Dow Jones Industrial Average also gained 1.61 percent to settle at 31,097.97 points.

The London Stocks Exchange closed in the gains supported by positive financial data underpinning AstraZeneca’s plans to increase its dividend payment to shareholders by 25 percent. This coupled with recoveries within energy sector stocks helped the FTSE 500 Index higher by 6.39 percent as it settled at 6,873.26 points.

The Japanese Stocks Exchange upped its index level after the week’s trading activities lifted by the general recovery in risk taking sentiment across the globe. This development saw high demand for shares within the Paper & Pulp, Railway & Bus and Real Estate sectors. The Nikkei 225 thus recorded a week-on-week gain of 2.53 percent as it settled at 28,139.03 points.

On the African equity market, the Johannesburg All Shares Index posted a week-on-week gain of 6.92 percent, as it settled at 63,519.18 points. The Nairobi All Share Index also closed with a weekly gain of 1.36 percent to settle at 154.18 points. The Nigerian All Share Index, however, fell by 0.37 percent to close at 40,123.71 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 51.8 55.99 8.09 8.09
Gold $/ounce 1,895.10 1,835.40 -3.15 -3.15
Cocoa$/metric tonne 2,603.00 2,516.00 -3.34 -3.34
Coffee $/pound 1.2825 1.237 -3.55 -3.55
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil posted a weekly gain following the decline in global crude inventory and supply cut decision by the Saudi Arabia to contribute to the elimination of the glut in the market. The announcement by the Saudi Arabia Government to cut output by 1 million barrels a day in February and March was welcomed by the market hence contributing to the commodities gain. Brent crude oil thus added $4.19 to trade at $55.99 per barrel.

Gold traded below its year opening price of $1,895.10 per ounce following political development in the US which saw Democrats securing majority in the house of Senate. This paved the way for President-elect Joe Biden to implement more fiscal relief measures which will affect demand for the yellow metal. Gold thus shed $59.70 to trade at $1,835.40 per ounce.

Cocoa registered a week-on-week decline weighed by supply glut concerns on the international commodities market as Ivory Coast continue to record bumper harvest. This coupled with recent stricter lockdowns are expected to create imbalances in the market to demand. Coffee thus eased by $87.00 to trade at $2,516.00 per metric tonne.

Coffee fell to a 2-week low following excess supply of the soft crop onto the global commodities market amidst the general weakness in the Brazilian Real. Data on coffee supply in the months of October and November saw an annual increment of 6.5 percent to 20.2 million bags to affect the performance of Coffee. Coffee dropped by 5 cents to trade at $1.24 per pound.

Note: The data in this publication is Friday on Friday (w/w)