Weekly Highlights

• Yields on GoG Treasury securities at the lower end of the yield curve moderated.
• The GSE indices rebounded to recover gains from previous week’s losses.
• The Ghana cedi firmed up against the British pound and the Euro but dipped marginally versus the US dollar.
• The major international equity markets closed the week bullish.
• Commodity prices closed the week’s trade, recording positive gains.

Macroeconomic Update

Key Ghana Economic Data

Indicator 2018 2019 2020 2021 2021
Target Actual
Inflation CPI (y-o-y %) 9.40 7.90 10.40 8± 2 9.70
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 8.10
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 13.50
GDP Growth (y-o-y %) 6.3 6.5 0.4 5.00 3.90
Budget Deficit (% of GDP) 3.8 4.5Sep 11.7 9.50 5.1
Public Debt (% of GDP) 57.6 63.00 68.3 n/a 77.1
Fx. Reserves (M. Cover) 3.7 4.1 4.1 4.00 5.0
Source: BOG; MOFEP; GSS.

Government of Ghana Treasury Securities

Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Oct 04–Oct 08 12.47 13.18 16.21 17.50 17.70 18.80
Sep 27–Oct 01 12.49 13.22 16.14 17.50 17.70 18.80
Sep 20–Sep 24 12.49 13.17 16.14 17.25 17.70 18.80
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.

The first auction of the month ended with a marginal ease on yields at the lower end of GoG treasury securities. The interest rate on the 91-Day and the 182-Day bills lowered by two and four basis points, respectively, to close trade at 12.47 percent and 13.18 percent respectively. The 364-Day bill, on the other hand, climbed seven basis points to open this week’s trade at 16.21 percent. Yields on the treasury note and bonds, however, remained unchanged, as they were not scheduled for the week’s auctions.

Results of Auction held on 1st October, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 591.76 591.76 12.4732
182-Day T-Bill 119.01 119.01 13.1769
2-Year Note 98.95 97.30 16.2131

Government accepted a total of GHS 808.07 million, out of GHS 809.72 million worth of bids tendered in by investors across the 91-Day, 182-Day, and 364-Day treasury bills. This represents 17 percent shy of the week’s target of GHS 972.00 million. The 91-Day bill dominated government’s purchases by more than 73 percent of total successful bids. At the upcoming auction, government plans to raise a total of GHS 1,475.00 million from the sale of the 91-Day, and 182-Day treasury bills.

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 47.21
GSE-FSI 49.51 -6.79 -6.23 -11.73 15.28

The first trading day of October saw a positive closure of the market indices, following improved demand for equity positions in some blue-chip stocks on the bourse. Both the GSE Composite Index and the Financial Stock Index extended their levels to close the week’s trade at a price of 2,858.17 and 2,055.20, respectively. This translates to a year-to-date gain of 47.21 percent and 15.28 percent, respectively, to shareholders.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 5.07 14.12 6.73
Total Value Traded (GHS M) 7.67 18.52 2.45
Market Cap (GHS M) 62,314.15 64,205.11 3.03

A total of 14.12 million shares valued at GHS 18.52 million changed hands in trading across nineteen equities. Scancom PLC (MNTGH) was the week’s most traded stock in volume terms, recording 64.56 percent of total volumes traded. The total market capitalization of the exchange closed the week at GHS 64,205.11 million.

Stock Price Movements

At the closing bell, seven advancers and a lone laggard were recorded on the mover’s chart. NewGold (GLD) topped the bulls’ list for the first time in the year, after lifting its value by GHS 5.20 to close the trade at GHS 102.50, easing shareholders year-to-date loss to 2.84 percent. Fan Milk PLC (FML) experienced an impressive week as the best performing stock as its share price inched up by 28.83 percent to book 226.85 percent year-to-date returns to investors.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
GLD 105.50 97.30 102.50 5.20 -2.84
SCB 16.31 18.50 20.35 1.85 24.77
FML 1.08 2.74 3.53 0.79 226.85
EGL 1.40 2.10 2.30 0.20 64.29
MTNGH 0.64 1.12 1.24 0.12 93.75
GOIL 1.50 1.60 1.70 0.10 13.33
TOTAL 2.83 4.62 4.65 0.03 64.31

Mega African Capital Ltd (MAC) appeared as the lone laggard, after losing 59 pesewas to trade at GHS 5.39 per share, extending shareholders year-to-date loss to 9.87 percent.

Stock Price Laggards in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
MAC 5.98 5.98 5.39 -0.59 -9.87

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.8634 5.8692 CAD 4.6271 4.6315
GBP 7.9419 7.9505 CFA 96.3835 96.4785
EUR 6.7990 6.8057 JPY 0.0528 0.0529
AUD 4.2561 4.2614 ZAR 0.3938 0.3941
NGN 70.4055 70.4874 CNY 0.9103 0.9107
Source: Bank of Ghana 01.10.2021

The Ghana cedi registered positive weekly gains against the British pound and the Euro but declined marginally versus the US dollar on the interbank forex market.

The US dollar rallied, posting an impressive performance against its major trading peers to close its highest level in nearly a year, underpinned by expectations that the Federal Reserve will taper stimulus beginning November and start hiking rates next year. Rising treasury yields and concerns over the possibility of an uptick in the U.S. debt ceiling gave flight to the greenback. Yields on 10-year US Treasury Inflation Protected Securities, have been up for about 37 basis points, since early August, compared with a gain of just 5 basis points for its German counterpart, Eurozone’s biggest economy, thus, making dollar-denominated treasuries attractive to investors. The green back, on a weekly basis, rose by 0.03 percent to the local currency, settling at a selling price GHS 5.87 on the interbank market. The year-to-date depreciation of the cedi closed the week at 1.81 percent.

The British pound sterling was down as it struggled to recover from the nine-month low, amid expectations the Bank of England will be raising interest rates sooner-than-expected. Treat to the British economy heightened due to a surge in energy prices and labor shortage in the wake of Brexit and the COVID pandemic, while investors also worry about the unemployment outlook as a furlough scheme introduced to mitigate the effects of the pandemic ended in September. The Pound thus reached 0.89 percent weekly depreciation to the cedi, as the selling price dropped to GHS 7.95 on the inter-bank forex market. The year-to-date depreciation of the cedi eased to 0.90 percent.

The euro traded lower on the international currency market, hitting its weakest level since July 2020, amid signs the European Central Bank (ECB) will remain dovish for some time while the US Federal Reserve moves towards tapering, beginning November 2021. ECB’s President, Christine Lagarde, told the ECB Forum on Central Banking that there are no signs recent price increases are becoming broad-based across the economy, while promising patience before policy tightening. The common currency thus recorded 0.89 percent weekly depreciation against the Ghana cedi as it traded a selling price of GHS 6.81. The year-to-date appreciation of the cedi advanced by 100 basis points from the previous week to settle the week at 3.85 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,455.48 4,357.05 -2.21 16.00
DJIA 34,797.60 34,327.45 -1.35 12.16
FTSE 100 7,051.48 7,027.07 -0.35 8.77
NIKKEI 225 30,248.81 28,771.07 -4.89 4.83
FTSE/JSEAllShare 64,049.05 63,661.02 -0.61 7.16
NSE All Share 38,962.28 40,221.17 3.23 -0.12
Nairobi All Share 177.81 181.23 1.92 19.14
Source: www.bloomberg.com, www.investing.com & www.tradingeconomics.com

Stocks on wall Street rallied on the first trading day of October, with the major indices posting gains as investors reacted to economic data, a potential oral treatment against Covid-19 and increased hope over the passage of the $1trillion infrastructure bill by the US Senate. Merck shares traded higher after the company announced its experimental coronavirus pill reduces the risk of death and hospitalization by 50 percent. On the economic data front, the ISM Manufacturing Purchasing Managers Index (PMI) in the US rose to 61.1 in September 2021, up for a second straight month and above market expectations of 59.6. Personal spending topped forecasts and PCE prices continued to point to high inflationary pressure. On a week-on-week basis, the S&P 500, and the Dow Jones Industrial Average however moderated by 2.21 and 1.35 percentage points, respectively, to close the week at price levels of 4,357.05 and 34,327.45, respectively.

The London bourse retreated on the first trading day of the new quarter, underpinned by losses in financials and commodity-linked stocks. Growing worries that inflation may persist have raised investors’ expectations of sooner-than-expected tapering by the UK central bank and US Federal Reserve, amid fears that global growth may have peaked. Also, ongoing concerns over the health of property giant China Evergrande Group weighed negatively on the bourse. Evergrande was suspended after it missed a key interest payment for the second time last week, as it struggles to refinance over $300 billion in liabilities. The FTSE 100, thus, recorded a 24.41 weekly decline to close the week a price level of 7,027.07, lowering investors year-to-date gains to 8.77 percent.

Japan stocks closed the week on the bear side, as losses in the Paper & Pulp, Railway & Bus and Real Estate sectors led shares, lowered. The NIKKEI 225 erased more than 1,400 points off its value to close the week at an index level of 28,771.07.

On the African market, the Johannesburg All Share shaved 388.02 points to close the week at a price of 63,661.02. The Nigerian All Share and the Nairobi All Share indices, on the flip side, gained 1,258.89 and 3.42 points, respectively, to end the week’s trading at prices of 40,221.17 and 181.23, respectively.

International Commodities Market

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 78.09 79.28 1.52 53.05
Gold $/ounce 1,751.70 1,758.40 0.38 -7.21
Cocoa$/metric tonne 2,591.00 2,710.00 4.59 4.11
Coffee $/pound 1.9435 2.0405 4.99 59.10
Source:www.bloomberg.com, www.investing.com & www.tradingeconomics.com

Oil prices closed higher on Friday, almost reaching a three-year high it chalked last Tuesday on expectations that Organization of the Petroleum Exporting Countries (OPEC) ministers will continue a moderate pace in raising output levels, as OPEC+, meets on Monday to discuss whether to boost production by 400,000 barrels per day or more in November and December. The cartel is slowly unwinding record output cuts made last year, although sources say it is considering doing more to boost production. OPEC+ is facing pressure from consumers, such as the US and India, to increase output to help inch down prices as demand has recovered faster than anticipated in some parts of the world. On a weekly basis, brent crude oil thus climbed 1.52 percentage points to close the month’s first trade at $79.28 per barrel on the international commodity market.

Gold prices went up on the international commodity market, amid the dollar strength, rising government bond yields, and expectations the US Federal Reserve would start reducing its massive bond-buying in November. Earlier in the week, US Fed, Chairman Jerome Powell, said that supply chain issues could cause inflation to last longer than the Fed had previously thought. The yellow metal added a weekly value of $6.70 to close Friday’s trade at $1758.40, per ounce.

Cocoa ended the week’s trading higher, amid fears of the crop production this year after, heavy rains triggered an outbreak of fungal black pod disease in some of the Ivory Coast's cocoa-growing regions. The cash crop’s output in the world's top grower Ivory Coast is expected to drop by an estimated 11 percent in the 2021/2022 crop season that started on October 1st, 2021. Cocoa recorded a sharp weekly uptick as it rose by $119.00, to settle the week’s trade at $2,710.00, per ounce.

Arabica coffee ended the week’s trading activities bullish, as it hit its highest since August, ending on growing concerns of lower production output in Brazil, due to drought and frosts. The soft crop, thus, rose marginally by near 5 percentage points to close the week’s trade at $2.04 per pound.

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