Weekly Highlights

• Yields on GoG Treasury securities trended downwards.
• The Accra bourse inched up in value for investors.
• The Ghana cedi lost footing against the US dollar and the Pound Sterling but rebounded against the Euro.
• Stocks on major international equity markets ended the week bullish.
• Gold and crude oil fell as the U.S dollar firmed up its value.

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 7.80
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 10.1
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 3.1
Budget Deficit (% of GDP) 3.8 4.5Sep 11.7 9.50 5.1 Q2
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
Aug 9–Aug 13 12.52 13.31 16.29 17.25 17.70 18.80
Aug 2 – Aug 6 12.55 13.37 16.40 17.25 17.70 18.80
Jul 26 – Jul 30 12.56 13.36 16.40 17.60 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.

Yields on GoG Treasury securities generally eased at the first auction of the month. The 91-Day T-Bill dropped by three basis points to settle at 12.52 percent, while the 182-Day and the 364-Day yields also trimmed by 6 and 11 basis points, respectively, to start the month at 13.31 percent and 16.29 percent respectively. However, the GoG Treasury Note and bonds stood still, as they were not scheduled for the week’s auction.

Results of Auction held on 30th July, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 1,127.38 1,049.76 12.5215
182-Day T-Bill 124.51 55.23 13.3064
34-Day T-Bill 403.07 182.00 16.2879

Government accepted GHS1,286.99 million, representing 78 percent of GHS 1,65.96 million worth of bids tendered by investors at the week’s auction. This was GHS185.99 million up the week’s target, with the 91-Day T-Bill recording the lion’s share of Government’s purchases. In the coming week’s auction, a total of GHS1,161.00 million is targeted from the sale of the 91-Day, 182 Day and the 364-Day T-Bills to the investing public.

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 41.21
GSE-FSI 49.51 -6.79 -6.23 -11.73 7.22

The Ghana Stock Exchange ended the week’s trading activities on an impressive note, underpinned by positive gains in some blue-chip stocks as both benchmark indices lifted their values. The GSE Composite Index added 24.35 points to close at 2,741.65, raising its year-to-date returns to 41.21 percent. The GSE Financial Stock Index, likewise, inched up by 21.24 points to record 1,911.39, lifting investors year-to-date gains to 7.22 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 6.97 5.79 -16.93
Total Value Traded (GHS M) 12.21 6.43 -47.37
Market Cap (GHS M) 62,248.75 62,648.18 0.64

A total of 5.79 million shares at a value of GHS 6.43 million exchanged hands in fourteen equities. MTNGH remained the most active stock as it topped the activity chart by 61.67 percent of overall volumes traded. The market capitalization, thus, pushed up by 64 basis points to close the week at GHS 62,648.18 million.

Stock Price Movements

At the closing bell, six equities recorded price movements with five advancers and a lone loser. Unilever Ghana PLC held up the bull’s lead, advancing by 46 pesewas to close the week at GHS2.66 per share, dropping its year-to-date loss to 67.91 percent.

Stock Price Advancers in terms of WK closing price
Equity Yr. Open Wk. Open Wk. End Wk. Change YTD (%)
UNIL 8.29 2.20 2.66 0.46 -67.91
EGH 7.20 7.00 7.3 0.30 1.39
EGL 1.40 1.80 1.95 0.15 39.29
MTNGH 0.64 1.25 1.26 0.01 96.88
TOTAL 2.83 4.00 4.01 0.01 41.70
On the losing side, Cocoa Processing Co. Ltd. was the lone laggard, as it trimmed a pesewa to close the week at GHS 0.02 per share advancing its year-to-date loss to 33.33 percent.

Stock Price Laggards in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change YTD (%)
CPC 0.03 0.03 0.02 -0.01 33.33

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.8174 5.8232 CAD 4.6279 4.6324
GBP 8.0646 8.0733 CFA 95.7937 95.8889
EUR 6.8408 6.8476 JPY 0.0527 0.0528
AUD 4.2775 4.2821 ZAR 0.3964 0.3968
NGN 70.6373 70.6562 CNY 0.8970 0.8979
Source: Bank of Ghana 06.08.2021

The local currency suffered against all the three major international trading currencies. The US dollar jump, buoyed by higher moves in U.S. Treasury yields after a better-than-expected monthly jobs report, fuelled investors’ expectations that the Federal Reserve will begin to tighten policy sooner than anticipated. The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose weekly by near 0.70 percent to 92.80, as U.S. bond yields trended upward, with the 10-yield rate trending close to 1.3 percent. Labour data released showed the U.S. economy added 943,000 jobs in July 2021, above forecasts for an uptick of 870,000, while the unemployment rate fell to 5.4 percent, from the June 2021 figure of 5.9 percent as average hourly earnings rose to 4 percent, as employers were forced to hike wages to attract new workers amid decline in labour supply. The U.S. dollar, thus, firmed up against the Ghana cedi by 0.33 percent, as it inched up its selling price at GHS 5.82 on the interbank forex market. The year-to-date depreciation of the cedi to the dollar closed the week at 1.03 percent.

The British pound closed bullish on the international forex market on the back of Bank of England's anticipated hawkish turn. The UK Central bank stayed its monetary policy on Thursday, raising inflation forecasts for 2021. It however said that "some modest tightening" of monetary policy over its forecast period was likely to be essential, should the economy continue to improve. The British government's decision to lift most social-distancing rules in July, amid high vaccination rates, helped put some shine in the sterling’s gains. Furthermore, economic data showed UK house prices rebounded in July, as shortage of homes on the market aided to lessen the impact of a reduced tax break for buyers. The Pound, thus, lowered its uptrend against the local currency to 0.07 percent, to close the week at a selling price of GHS 8.07 and a year-to-date gain of 2.41 percent.

The euro lost value on the international forex market, as investors expect that the European Central Bank will continue dovish for a while. This is after policymakers pledged, last month, to keep interest rates at record-low levels in an effort to bring inflation back to its 2 percent target, amid warning of a fresh wave of the covid-19 pandemic and its impact on the economic recovery. The Euro however appreciated against the local currency by 0.53 percent week-on-week, settling at a selling price of GHS 6.85, recording 3.21 percent year-to-date appreciation.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,395.26 4,436.52 0.94 18.12
DJIA 34,936.13 35,208.64 0.78 15.04
FTSE 100 7,032.30 7,122.95 1.29 10.25
NIKKEI 225 27,283.59 27,820.04 1.97 1.37
FTSE/JSEAllShare 68,970.78 68,673.94 -0.43 15.60
NSE All Share 38,547.08 38,811.11 0.68 -3.62
Nairobi All Share 177.52 178.50 0.55 17.35

Wallstreet rallied hitting fresh all-time high on Friday as financials, retail and energy stocks were among the best performers, following better than expected July 2021 US labour market data and strong upbeat corporate earnings, supported investor sentiments of a cushion to the US economy, ahead of the delta variant treat. July data on labour showed that a total of 943,000 jobs were added to the US economy, the highest in 11 months, above investors’ forecast of 870,000 jobs, translating to a dip in unemployment rate of 5.4 percent from the 5.9 percent recorded in June 2021, the least since March 2020 in the heat of the global pandemic. Weekly initial jobless claims also dropped for a second consecutive week to 385,000. Both the S&P 500 and the Dow Jones Industrial Average raised their levels to record 4,436.52 points and 35,208.64 points week-on-week, respectively.

The London bourse gained as the earnings season lingered, amid investors welcoming better than predicted U.S. labour report. London Stock Exchange Group recorded an uptick of 4.6 percent in revenue for the first half of 2021 but warned about rising costs in the second part of the year. Hikma Pharmaceuticals' revenue increased by 7 percent from January to June 2021, with operating profit moving up 10 percent. Data showed UK house prices rose 0.4 percent in July, as it recovered from a 0.6 percent fall in June, as a shortage of homes on the market helped soften the impact of a reduced tax break for buyers. The FTSE 100, thus, rose by 1.29 percent to settle at 7,122.95 points with a year-to-date gain of 10.25 percent.

Japanese stocks closed the week on a solid note, on the back of strong upbeat earnings report. Investors’ risk appetite was also buoyed by reports that Shionogi & Co., one of Japan’s leading pharmaceuticals is on the verge of seeking approval for a new Covid-19 treatment by year end 2021. The Nikkei 225, thus, inched by 1.97 percentage points to end the week at an index level of 27,820.04.

On the African market, the Johannesburg All Share Index declined by 43 basis points to settle at 68,673.94 points. The Nigerian and Nairobi All Share Indices increased their levels week-on-week basis to close the week’s trades at 38,811.11 and 178.50 points, respectively.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 76.33 70.7 -7.38 36.49
Gold $/ounce 1,812.60 1,763.10 -2.73 -6.97
Cocoa$/metric tonne 2,361.00 2,417.00 2.37% -7.15%
Coffee $/pound 1.955 1.760 -9.97% 37.23
Source:www.bloomberg.com, www.investing.com & www.tradingeconomics.com

Oil prices sharply hit the southward direction, the deepest weekly fall in months. This was due to worries that travel restrictions to curb the spread of the Delta variant of Covid-19 could short-change the global recovery, threatening energy demand at the peak summer driving season and limiting air traffic amid strengthening of the greenback on the back of a stronger labour market. Japan has warned to extend emergency restrictions to more regions of the country, while China, the world's second-largest oil consumer, has imposed fresh restrictions in some cities and cancelled flights. Brent crude oil thus traded bearish on the international commodity market as it trimmed $5.63 off its value to close the week’s trade at $70.70, per barrel.

Gold came under heavy selling pressure, breaking below the $1,770 level for the first time in over a month, underpinned by a stronger dollar and soaring U.S Treasury yields. The Labour Department's closely watched employment report showed nonfarm payrolls inched up by 943,000, the most in eleven months, beating market expectations and fuelling fears about sooner-than-expected tapering by the U.S. Federal Reserve. The precious metal was already under pressure amid hawkish comments from US Federal Reserve Vice Chair, Richard Clarida earlier this week, who suggested the central bank could start cutting back on bond purchases later in the year. The yellow metal, thus, lowered its value by 2.73 percentage points on week-on-week basis to settle at $1,763.10, per ounce.

Cocoa increased its value on the international commodity market, as investors anticipate growth in demand in the coming months. The cash crop thus added $56.00 to trade at $2,417.00 per metric tonne at the close of the market.

Coffee slipped in value as traders assess the risk of frost threatening crops in top-producer Brazil. Frost in Brazil, which accounts for 40 percent of global Arabica output, is threatening to drive coffee prices even higher amid broader worries about global food inflation and higher shipping costs as economies seek to manage the treat of the global pandemic. The value of coffee, hence, dropped by 9.97 percentage points week-on-week to trade at to $1.76 per pound.

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