Weekly Highlights

? Yield on 364-Day T-Bill at 16.94 percent, upped by 12 basis points.
? The GSE Equity indices closed mixed.
? The Cedi appreciated against the Euro but lost to the British Pound and the US Dollar.
? Wallstreet closed higher buoyed by upbeat job data.
? Brent crude oil surged on inventory declines.

Macroeconomic Update

Ghana Economic Data

Indicator 2017 2018 2019 2020 2020
Target Actual
Inflation CPI (y-o-y %) 11.8 9.40 7.90 8.00 11.20
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 7.40
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 n/a
Budget Deficit (% of GDP 5.9 3.8 4.5Sep 4.7 n/a
Public Debt (% of GDP) 69.8 57.6 63.00 n/a n/a
Fx. Reserves (M. Cover) 4.3 3.7 4.1 ?3.5 n/a
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
Aug 10 – 14 13.99 14.08 16.94 18.75 18.85 19.25
Aug 03 – 08 13.99 14.05 16.82 18.75 18.85 19.25
Jul 27 – 31 13.97 14.05 16.82 18.75 18.85 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.

Last Friday, yield on the 182-Day T-Bill upped by 3 basis points to settle at 14.08 percent. Yields on the 364-Day T-Bills also widened by 12 basis points to settle at 16.94 percent but that on the 91-Day T-Day Bill remained unchanged. Yields on treasury notes and bonds remained unchanged as they were not scheduled for the week’s auction.

Results of Auction held on 07th August, 2020

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 674.09 674.09 13.9866
182-Day T-Bill 81.05 81.05 14.0780
364-Day T-Bill 163.73 163.73 16.9433

Government accepted all the GHS918.87 million bids tendered at the week's auction. The total amount raised outstripped the GHS667.26 million raised at the previous auctions but fell short of the week’s target of GHS1,225.00. The 91-Day Bill constituted a large chunk of government’s purchase as it accounted for 73.36 of the bids raised. Government hopes to raise an amount of GHS1,025.00 million at the next auction through the issuance of the 91-Day, 182-Day and 364 Day T-Bills.

The yield curve sustained its normality as the rate adjustment recorded at the week’s auction were unable to alter its upward slopping. This is on the back of the commitment by the central bank to lengthen the term structure of Government securities whiles also making returns on long-dated treasury securities more attractive than others. We expect the yield curve to sustain its normality following the heightened uncertainties surrounding the COVID-19 pandemic and the downtrend on the equity market which has shifted demand to the relatively safer GOG treasury securities.

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 -16.42
GSE-FSI -19.93 49.51 -6.79 -6.23 -14.58

Trading on the Accra Bourse closed with the equity indices recording mixed outturns. The GSE Composite Index rose by 0.47 percent to settle at a year-to-date loss of 16.42 percent. This follows the price gain recorded by the telecommunication giant – MTN Ghana Ltd. The GSE Financial Stocks Index, on the other hand, trimmed 0.32 percent to settle at 1,725.21 points, corresponding to a year-to-date loss of 14.58 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 0.23 10.38 4413.04
Total Value Traded (GHS M) 0.30 6.26 1986.67
Market Cap (GHS M) 52,722.06 52,813.63 0.17

Activity levels strengthened, with a total volume of 10.38 million shares valued at GHS6.26 million exchanging hands compared to the 233,527 shares valued at GHS 298,697.00 traded at the previous week’s session. MTN Ghana Ltd was the most actively traded stock accounting for 98.91 percent of the overall traded volume. Market capitalization also edged up by 0.17 percent to settle at GHS 52,813.63 million.

Stock Price Movements

On price movements, a total of two equities altered their week opening prices. MTN Ghana Ltd was the sole price gainer on bourse, it rose by a pesewa to close at 58 pesewas per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
MTNGH 0.70 0.57 0.58 0.01 -17.14%

On the downside, CAL Bank Ltd dipped by 5 pesewas to settle at 65 pesewas per share.

Stock Price Losers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
CAL 0.89 0.70 0.65 -0.05 -26.97

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.6769 5.6825 CAD 4.2413 4.2447
GBP 7.4032 7.4117 CFA 98.0255 98.0944
EUR 6.6870 6.6917 JPY 0.0536 0.0536
AUD 4.0986 4.1049 ZAR 0.3225 0.3229
NGN 67.0370 67.2131 CNY 0.8141 0.8149
Source: Bank of Ghana 07.08.2020

On the interbank forex market, the Ghana Cedi appreciated against the Euro but lost to the British Pound and the US Dollar. The US Dollar posted its seventh-consecutive decline on the international currency market as economic uncertainties blurred the impact of upbeat jobs data. Non-farm payrolls in US for July jumped by 1.76 million, beating the forecasted 1.6 million. The greenback, however, succumbed to lingering uncertainties on the outlook of the economy as lawmakers failed to reach an agreement on the fiscal stimulus package to shore up the economy. Despite the US Dollar’s outturn, it recorded a week-on-week gain of 0.03 percent to sell at GHS5.68 on the interbank forex market. The year-to-date depreciation of the Cedi thus increased to settle at 2.57 percent.

The British Pound surged to a five-month high spurred by a less dovish stance by the Bank of England as it left its policy rate unchanged. UK’s Central Bank kept its benchmark rate unchanged at 0.10 percent and its quantitative easing program at 745 billion pounds. The BOE also revised its forecasts on the economy from an initial projected contraction of 14 percent to 9.5 percent in 2020 which sparked positive sentiments on the prospects of an economic recovery. The British Pound thus appreciated by 0.02 percent to exchange at GHS7.41 on the interbank currency market. The year-to-date depreciation of the Cedi thus upped to 1.23 percent.

The Euro lost its strong footing on the international currency market as it derailed from last week’s 2-year high following lack of significant support in the week under review. The renewed investors’ confidence in the US economy after a strong job creation in July dominated the international currency market which, in turn, affected the likely impact of an expansion in Eurozone’s services sector (54.7 points) and Germany’s industry production (8.9%) on the shared currency. The Euro thus posted a marginally depreciated of 0.09 percent against the local currency as it traded at GHS6.69 on the interbank currency market.

International Markets

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,271.12 3,351.28 2.45 3.73
DJIA 26,428.32 27,433.48 3.80 -3.87
FTSE 100 5,897.76 6,032.18 2.28 -20.02
NIKKEI 225 21,710.00 22,329.94 2.86 -5.61
FTSE/JSE All Share 55,721.80 56,757.73 1.86 -0.57
NSE All Share 24,693.73 25,041.89 1.41 -6.71
Nairobi All Share 134.48 130.58 -2.90 -21.53

US equity market closed on a positive note following the release of data signaling an economic recovery in the US as jobs creation in the month of July came in much better than expected at 1.76 million. This reinforced investors’ expectation of a steady growth in the US economy leading to a significant surge in demand for shares in the utilities, telecoms, and financial sectors. The S&P 500 thus recorded a week on week gain of 2.45 percent to settle at an index level of 3,351.28 points. The Dow Jones Industrial Average also posted a weekly gain of 3.80 percent to settle at 27,433.48 points.

The London Stocks Market ended the trading week in the gains spurred by Brexit hopes following hawkish commentary by UK’s prime minister – Rishi Sunak about the increased likelihood of securing a trade deal with the European Union. The 8.9 percent surge in Germany’s industrial production were among other bullish developments which stimulated investors’ demand for shares on the London Stocks Exchange. The FTSE 100 thus ended the week with a weekly gain of 2.28 percent as it settled at 27,433.48 points.

The Japanese Stock Exchange managed to close the trading week in the gains despite coming under significant selling pressure last Friday. The momentum gained by the Nikkei 225 index after recording three straight weeks of gains hit a snag after foreign investors assessed the impact of the newly reported cases of the coronavirus in Japan on its economy which sparked a sell-off of stocks worth 727.26 billion yen. The Nikkei 225 thus recorded a weekly rise of 2.86 percent as it settled at 22,329.94 points.

On the African equity market, the Johannesburg All Share Index upped by 1.86 percent to settle at 56,757.73 points. The Nigerian Stocks Exchange also gained 1.41 percent as it settled at 25,041.89 points. The Nairobi All Share Index, however, dipped by 2.90 percent to end the trading week at 130.58 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 43.3 44.4 2.54 -32.73
Gold $/ounce 1,973.90 2,018.00 2.23 32.49
Cocoa$/metric tonne 2,400.00 2,546.00 6.08 0.24
Coffee $/pound 1.1895 1.1545 -2.94 -10.99
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil rebounded in the trading week as crude inventories dipped on the international commodities market. Data released by the Energy Information Administration revealed that crude inventory eased by 7.4 million barrels for the week ended July 31, which created artificial shortage of the energy commodity. Brent crude oil thus upturned by 2.54 percent to close at $44.40 per barrel.

Gold extended its bullish run as a weaker US dollar and heighted worries surrounding a surge in the covid-19 pandemic reduced investor’s risky appetite Gold thus jumped by 2.23 percent to trade at $2,018.00 per ounce.

Cocoa closed higher buoyed by lower-than-expected rainfall in major growing regions of Ivory Coast. Average rainfall recorded in Daloa came in at 19.3 mm, below the 5-year Average. Cocoa thus gained 6.08 percent to settle at $2,546.00 per metric tonne.

Coffee slipped on the international commodities market following the depreciation of the Brazilian real owing to escalating cases of covid-19 as death tolls crossed the 100,000 mark. Coffee declined by 2.54 percent to close at $1.15 per pound.

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