Source: BOG; MOFEP; GSS.     * represents provisional estimate

Government of Ghana Treasury Securities

NB: The above are the annual yields on Government of Ghana Treasury Securities.

Interest rates on the Government of Ghana treasury securities witnessed marginal adjustments in the week under review. The yield on the 91-Day T-Bill dropped by 2 basis points to 14.68 percent. Interest rate on the 182-Day T-Bill, however, remained unchanged at 15.14 percent, but the 364-Day T-Bill also eased by 8 basis points to 17.83 percent. The yield Interest rate on the Government of Ghana treasury notes and bonds also remained unchanged.

Government accepted all the GHS615.86 million bids tendered by investors at the auction. This slightly fell below the GHS663.00 million targets expected to be raised in the trading week and below the GHS918.00 million purchased by the Government at the previous auction. The 91-Day T-Bill had the most bids accepted by the Government as it constituted 60.48 percent of the total bids raised at the week’s auction. An amount of GHS958.00 million is expected to be purchased by the Government at the upcoming auction from the sale of the 91-Day and 182-Day T-Bills.

The yield curve sustained its normality despite the interest rates adjustment recorded at the auction. The positive slopping of the yield curve signals positive economic outlook of the domestic economy which are ideal for investment activities and will contribute significantly to GDP. The uptrend of the yield curve with rates exceeding October’s inflation rate of 7.7 percent also presents an opportunity to deepen private sector participation as investors are sure that the real expected returns are not eroded by inflation. 

Ghana Stock Exchange

The last trading session in November saw the equity indices closing mixed. The benchmark Composite Index thus dropped by 46 basis points to settle at an index level of 2,137.91 points, representing a year-to-date loss of 16.88 percent. The GSE Financial Stocks Index, however, recorded a week-on-week gain of 32 basis points to settle at 1,78.79 points, corresponding to a year-to-date loss of 16.94 percent.

At the close of the week’s trading session, the total traded volume stood at 5.13 million valued at GHS9.00 million. This represented a 54.92 percent reduction from the previous week’s total traded volume of 11.38 million worth GHS1.49 million. MTN Ghana Ltd was the most actively traded stock as it accounted for 62.60 percent of the overall traded volume. Following the negative closure of the benchmark index, market capitalization reduced to GHS55,563.37 million, representing 0.18 percent declines.

Stock Price Movements

On price movements, a total of 5 equities altered their week opening prices; 2 advancers and 3 laggards. Ecobank Ghana Ltd topped with a price uplift of 9 pesewas to settle at GHS7.90 per share. SIC also upticked by a pesewa to close at 9 pesewas per share.

On the laggards list, Total Petroleum Ltd occupied the bottom after losing 6 pesewas of its week opening price to close at GHS2.92 per share. MTN Ghana Ltd and Ghana Oil Company Ltd also dropped by a pesewa each to close at 70 pesewas and GHS1.67 per share respectively.

Currency Market

Source: Bank of Ghana 29.11.19

At the close of the interbank currency market, the Ghana cedi depreciated against all the three major trading currencies. The US dollar closed bullish on the international currency market spurred by data suggesting strong economic footing in the US contrary to the global economic slowdown. Revised 3^rd quarter GDP for the US economy was quoted at 2.1 percent, outpacing the initial growth rate of 1.9 percent to significantly buoy the value of the greenback. Fed’s hawkish assessment of the US economy with expression of positive outlook of the labour market and business environment while ruling out possibilities of another rate cut for 2019 also contributed to positive closure of the dollar in the week under review. At the close of the week’s trading the US dollar gained 15 pesewas as it traded at GHS5.53, representing a year-to-date depreciation of 12.77 percent.

The British pound jumped to a seven-week high on the international currency market buoyed by positive sentiments surrounding the upcoming election in the UK. A report released by the “YouGov Poll” significantly shaped the outlook of the British pound as it placed the Boris Johnson’s ruling party ahead of the Labour Party. A total of 359 seats out of the 650 seats are expected to be won by the ruling party and this will be the best results since 1987 when Margaret Thatcher became UK’s Prime Minister. The realisation of this report is expected to smoothen the Brexit deal with the European Union and contribute to the reformation of the UK’s economy. The British pound thus advanced by 22 pesewas to sell at GHS7.14, representing a week-on-week appreciation of 3.22 percent. The year-to-date depreciation of the cedi thus widened to 13.48 percent.

The Euro registered a positive week-on-week performance on the international currency market on signs of economic recovery within the bloc. Eurozone’s inflation improved more-than-expected as it broke several months of consistent declines. Inflation in the region posted an annual rise of 1.00 percent beating a forecast rise of 0.9 percent and overturning previous readings of 0.7 percent in October and 0.8 percent in September. Additionally, improving labour market conditions such as unemployment rate in the bloc dropped to its lowest in 11-years of 7.5 percent and a 4.2 percent rise earnings in Germany supported the single currency in the week under review. The Euro recorded 14 pesewas rise in its selling price to GHS6.08, representing a weekly appreciation of 2.36 percent. The year-to-date depreciation of the cedi thus rose to 9.31 percent.

International Markets

Wallstreet ended its last trading session in the month of November on an upbeat note spurred by improved market sentiment surrounding the US economy and buying pressure ahead of last Thursday’s thanksgiving holiday in the US. The upward revision of the US GDP for the 3^rd quarter despite signs of easing economic activities in rivalling countries and demand pressure recorded on the bourse ahead of its holiday last Thursday lifted the indices higher. The upward drive of the market indices was also driven by market excitement surrounding the decision by Huawei to legally challenge Trump’s banning of its operations in the US. At the closing bell, the S&P 500 rose by 0.99 percent to settle at 3,140.98 points. The Dow Jones Industrial Average also upped by 0.63 percent to close at 28,051.41 points.

The London Stock Exchange posted a positive week-on-week gain following Ocado Group – an online grocery in the UK announcement of a partnership with a Japanese Retailing Company. This comes after similar activities in the US and Europe to enhance its operations worldwide. Positive sentiments surround the UK’s general election also contributed to the bullish closure of the market indices. The FTSE 100 thus finished with a week-on-week gain of 0.27 percent to settle at 7,346.53 points.

The Japanese Stock Exchange closed higher buoyed by demand pressure in Paper &Pulp, Railway & Bus and Real Estate sectors. The Nikkei 225 thus rose by 0.78 percent to settle at 23,293.91 points.

Trading on the African equity market ended mixed with the Nigerian All Share Index rising by 0.04 percent to close at an index level of 27,002.15 points. The Nairobi All Share Index also upped by 2.00 percent to settle at 157.93 points. The Johannesburg All Share Index however, dropped by 2.49 percent to close at 55,349.01 points.

Source:www.bloomberg.com, & www.investing.com

Brent crude oil tumbled on the international commodities market weighed by Saudi Arabia’s decision to ignore the output cut policy adopted by OPEC. This followed speculation that some members of the OPEC and its alliances such as Iraq and Russia have been flouting the output cut decision for a very long time, hence, Saudi Arabia’s plans to announce production rise in the upcoming OPEC meeting scheduled to take place on the 5^th December.  Brent crude oil thus trimmed 96 cents to close at $62.43 per barrel.

Gold rebounded following the decision by the US to interfere in China’s political issues by passing a bill in support of Hong Kong protestors and the counter remarks from the Chinese government last Thursday. This casted investor doubt about the ongoing trade negotiation to demand the safe-haven commodity. Gold thus recorded a weekly loss of $2.20 to trade at $1,472.70 per ounce.

Cocoa traded below the week’s opening price of $2,623.00 per metric tonne as signs of higher production output in Ivory Coast due to recent favourable climatic conditions experienced in the region made buyers under-price the commodity. Cocoa thus shed $67.50 to trade at $2,555.50 per metric tonne.

Coffee posted a marginal gain after the week’s trade on the international commodities market. This steamed from buyer’s willingness to ignore pressure on the Brazilian real which depreciated significantly in the trading week to focus on signs of lower production figures in both Vietnam and Brazil. Coffee thus added 4 cents to end the week at $1.19 per pound.