Weekly Highlights

• Yields on short-dated treasury securities trimmed further.
• Accra Bourse extended bullish run into new month.
• Ghana cedi posted mixed performance against the three major trading currencies.
• Equity market upped on global vaccination against COVID-19.
• Brent crude oil advanced on OPEC’s output cut decision.

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 11.1 10.40
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 7.00
Monetary Policy Rate (%) 20.0 17.0 16.00 n/a 14.50
GDP Growth (y-o-y %) 8.5 6.3 6.5 0.9 -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 ?4.0 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
Feb 08 – 12 13.82 14.01 16.96 18.50 19.25 19.85
Feb 01 – 05 14.06 14.09 16.96 18.50 19.25 19.85
Jan 25 – 29 14.08 14.13 16.95 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 witnessed marginal moderation at the recently held auction. The yield on the 91-Day T-Bill went down by 24 basis points to settle at 13.82 percent. That on the 182-Day T-Bill also saw 8 basis points decline as it settled at 14.01 percent. Yields on the 364-Day T-Bill was unchanged at 16.96 percent likewise yields on the Government’s Bonds and Notes were also unaltered as they were not part of the week’s auction.

Results of Auction held on 5th January, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 1,564.64 962.95 13.8166
182-Day T-Bill 114.77 113.82 14.0102

Government accepted a total of GHS1,076.77 million worth of bids from the GHS1,679.41 bids that were tendered by investors last Friday. The 91-Day T-Bill dominated Government’s purchase, as it constituted 89.43 percent of the overall bids raised by the Government. Government anticipates raising a total of GHS1,213.00 million from the sales of the short-dated treasury securities.

The yield curve sustained its normality despite the significant rate moderation witnessed at the week’s auction. The moderation of the yields follows demand pressures within the money market following the persisting risk aversion mode of investors spurred from economic shocks. It is anticipated that interest rates on the Government treasury securities moderate marginally in within the first quarter of the year as investors increase their risk bet to venture into other high yielding markets despite the threats of the pandemic on the economy.

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 5.84
GSE-FSI 49.51 -6.79 -6.23 -11.73 4.57

The Accra Bourse extended its bullish run into the new month on account demand pressures as investors are highly optimistic about outturns in the new year despite threats to the economy. The anticipation of firms adopting innovative measures to benefits from the COVID-19 challenges are some factors stimulating improve activities on the Bourse. On the back of this, the GSE-Composite Index thus recorded a weekly gain of 1.38 percent after settling at 2,055.02 points. The year-to-date gain of the Index thus moved up to 5.84 percent. The GSE Financial Stocks Index also posted a weekly gain of 0.15 percent with an index level of 1,864.22 points, corresponding to a year-to-date return of 4.57 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 1.75 19.29 1,004.87
Total Value Traded (GHS M) 1.21 13.55 1,023.75
Market Cap (GHS M) 55,332.99 55,624.96 0.53

Market outturn was a significant improve over the previous week’s figure. The week’s trade realized a total of 19.29 million shares valued at GHS13.55 million. MTN Ghana Ltd dominated the activity chart with 99.79 percent share of the overall traded volume. Market capitalization also saw an upsurged of 0.53 percent as it ended the week at GHS55,624.96 million.

Stock Price Movements

At the pairing of the week’s opening and closing prices, four equities appeared on the mover’s chart with no laggard recorded. Total Petroleum Ltd led the pack of advancers with 27 pesewas gains to close the week’s trade at GHS3.10 per share. CAL Bank Ltd and Enterprise Group Ltd gained 2 pesewas each to settle at 77 pesewas and GHS1.42 per share, respectively. MTN Ghana Ltd also added 2 pesewas to its opening price to finish the week’s trade at 70 pesewas per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
TOTAL 2.83 2.83 3.10 0.27 9.54
CAL 0.69 0.75 0.77 0.02 11.59
EGL 1.4 1.40 1.42 0.02 1.43
MTNGH 0.64 0.68 0.70 0.02 9.37

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.7576 5.7634 CAD 4.5018 4.5064
GBP 7.9006 7.9097 CFA 94.6984 94.7997
EUR 6.9194 6.9268 JPY 0.0546 0.0546
AUD 4.4014 4.4073 ZAR 0.3861 0.3864
NGN 67.7823 68.7319 CNY 0.8907 0.8916
Source: Bank of Ghana 05.02.2021

The Ghana Cedi posted a mixed performance against the three major trading currencies as it appreciated against the Euro, lost to the Pound but unchanged against the US dollar. The US dollar posted its best performance in three weeks on the international currency market as investors increased their demand on account of confidence and pace of economic recovery in the world’s largest economy. Unemployment data improved as jobless claim in the US fell by 49,000 plus in the month of January bringing unemployment rate to 6.3 percent, representing 0.4 percentage point moderation from the previous month’s rate. Positive developments in US manufacturing sector with the PMI for January rising to 59.2, from 57.1 in December, the highest index’s highest reading since the series began in 2007, as output and new orders rose. These coupled with the pace of vaccinations in the US boosted the appeal of the greenback in the week’s trade. Despite the US dollar’s shine, it traded flat with no week-on-week change at a selling price of GHS5.76. The cedi thus maintained a year-to-date performance of negative 0.01 percent.

The British Pound sustained its upward rally for the fourth consecutive week on the international forex market following the decision by the Bank of England to hold onto the decision to introduce sub-zero rates. The decision to halt the sub-zero rates was on the grounds of truly accessing the potential impact of the pandemic before introducing monetary measures which aims at boosting lending to encourage spending. The positive outlook of the pound sterling was further supported by successful Brexit transition and the optimism over the Britain’s successful COVID-19 vaccination push. The British pound thus recorded a weekly appreciation of 0.07 percent as its upped its selling price to GHS7.90 on the interbank currency market. The year-to-date depreciation of the cedi thus widen to 0.39 percent.

The Euro posted a weekly decline amidst mixed economic data from the bloc. Eurozone’s inflation jumped to 0.9 percent in January 2021, the biggest monthly rise in four months after the index remained in the negatives on account of the pandemic threats to economic activities. Eurozone’s core inflation also rose to its highest in five years to 1.4 percent in January 2021 from a previous rate of 0.2 percent. These were however, subdued by dauting growth projections by economist forecasting a double-dip recession following the impact of the second wave of the Covid-19 pandemic during the last quarter of 2020 and the first quarter of 2021. The Euro thus recorded a weekly depreciation of 1.00 percent with a reduced selling price of GHS6.93. The year-to-date appreciation of the cedi thus rose to 2.03 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,714.24 3,886.83 4.65 3.48
DJIA 29,982.62 31,148.24 3.89 1.77
FTSE 100 6,407.46 6,489.33 1.28 0.45
NIKKEI 225 27,663.39 28,779.19 4.03 4.86
FTSE/JSEAllShare 62,472.10 64,289.48 2.91 8.22
NSE All Share 42,412.66 41,709.09 -1.66 3.57
Nairobi All Share 155.59 157.11 0.98 3.29

The US equity market ended bullish following the continued investor optimism about the pace of economic recovery and stronger-than-expected 4th quarter corporate results. The S&P 500 thus waw 4.65 percent rise as its index level rose to 3,886.83 points. The Dow Jones Industrial Average also ended with a weekly appreciation of 3.89 percent at an index level of 31,148.24 points.

The London Stocks Exchange closed the week’s trade in the gains on account of reports suggesting significant effort by the Government in vaccinating its population against the pandemic in a bid to restore economic activities. The FTSE 100 thus ended with a weekly gain of 1.28 percent as it settled at 6,489.33 points.

The Japanese Stocks Exchange surged on vaccine hopes and the rising number of vaccinations across the globe to curtail the negative impact of the virus. On the back of this, high demand was observed for stocks within the Paper & Pulp, Railway & Bus and Real Estate sectors. The Nikkei 225 thus finished with a weekly gain of 4.03 percent to settle at 28,779.19 points.

On the African equity market, the Johannesburg All Shares Index witnessed a rebound-on account of the vaccine hope as South Africa prepared to vaccinate its population. The index thus saw a 2.91 percent rise as it ended the week’s trade at 64,289.48 points. The Nairobi All Share Index also posted a weekly rise of 0.98 percent as it settled at 157.11 points. The Nigerian All Share Index, however, recorded a weekly loss of 1.66 percent to settle at 41,709.07 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 55.88 59.34 6.19 14.56
Gold $/ounce 1,850.30 1,813.00 -2.02 -4.33
Cocoa$/metric tonne 2,531.00 2,587.00 2.21 -0.61
Coffee $/pound 1.2295 1.245 1.26 -2.92
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil advanced on account of OPEC’s strong commitment to adhere to the output cut decision in view of eliminating the excess supply of the commodity which engulfed the market in 2020 as the pandemic heightened. Brent crude oil thus added $3.46 to trade at $59.34 per barrel.

Gold trimmed its value on account of the resurgence of the US dollar which negatively affected demand of the yellow metal. The resurgence of the US dollar on account of improving economic outlook of the US economy made the yellow metal expensive for non-dollar holders, hence, reduced demand in the week’s trade. Gold thus went down by $37.30 to close at $1,813.00 per ounce.

Cocoa upped its value on the international commodities market on signs of stronger global demand of the cocoa as six international cocoa grinders upped their processing by 7.4 percent to 52,053 metric tonnes in 2020. Cocoa thus gained $56.00 to trade at $2,587.00 per metric tonne.

Coffee advanced on the back of contracting supply onto the global commodities market as Vietnam encounters challenges in the production of the crop. Coffee production in Vietnam is tipped to fall by 10 percent to 15 percent this year due to natural disasters and lower investment, hence created artificial shortages. Coffee thus added 2 cents to trade at $1.25 per pound.

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