Weekly Highlights

• Consumer Price Inflation unchanged at 10.3 percent
• Interest rate for 182-Day T-Bill slashed by 8 basis point, as rate moderation persist.
• GSE equity indices resumed uptrend, on the back of 4 advancers.
• Ghana cedi depreciated against the three major trading currencies.
• London Stocks Exchange crossed the 7,000 benchmarks on the back of bullish growth data from China.
• Gold advanced as it rode on the soft dollar.

Macroeconomic update

Consumer Price Inflation unchanged at 10.3 percent
The Consumer Price Index (CPI) settled at 10.3 percent in March 2021, unchanged from the February’s 2021 reading. The month-on-month changes in prices of goods and services was, however, slightly higher in the month under review (0.09%) than was observed in February 2021 (0.08).

Factors accounting for the stability in the inflation is ascribed to the reduced inflationary pressures observed within the Food and non-alcoholic sub-component of the economy. The sub-sector’s inflation dropped to 10.08 percent in March 2021, from a previous rate of 12.30 percent, largely on account of positive outcomes of the Government’s flagship programme – planting for food. In the month of March 2021, the contribution of food inflation to the overall inflation significantly reduced to 46.3 percent from the 52.6 percent contributions in February 2021. The downward inflation trend within the Food and non-alcoholic sub-sector, helped nullify inflationary pressures emerging from the Non-Food components of the CPI. Non-food inflation rose to 10.00 percent from a previous rate of 8.80 percent, with the Housing sector recording high inflationary pressure. The rate of change in Housing for the month of March was 5.1 percent, as against 3.9 percent recorded in February 2021.

At the regional level, inflationary pressure is predominately in the Greater Accra Region than other regions in the country. Per the data released by the Ghana Statistical Service, all other regions recorded rates below the national average of 10.3 percent, except the Greater Accra Region which recorded an inflation of 17.00 percent. Inflation was least in the Volta Region at 5.3 percent.

Key Ghana Economic Data

Indicator 2018 2019 2020 2021 2021
Target Actual
Inflation CPI (y-o-y %) 9.40 7.90 10.40 8.00 9.90
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 10.3
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 14.50
GDP Growth (y-o-y %) 6.3 6.5 0.9* 5.00 n/a
Budget Deficit (% of GDP 3.8 4.5Sep 11.7 9.50 n/a
Public Debt (% of GDP) 57.6 63.00 68.3 n/a n/a
Fx. Reserves (M. Cover) 3.7 4.1 4.1 4.00 n/a
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
Apr 19 – 23 12.79 13.53 16.44 17.60 17.70 18.30
Apr 12 – 16 12.81 13.61 16.44 17.60 17.70 18.30
Apr 05 – 09 12.85 13.62 16.57 17.60 17.70 18.30
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.

At the close of the week’s auction, the yield on the 91-Day T-Bill inched down by 2 basis points to settle at 12.79 percent. Interest rate on the 182-Day T-Bill also eased by 8 basis points to settle at 13.53 percent. The yield on the 364-Day T-Bill was unchanged at 16.44 percent, as it was not scheduled for the week’s auction. Interest rates on Government Bonds and Notes also remained unchanged as they were not part of the week’s issuance.

Results of Auction held on 16th April, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 812.13 812.13 12.7949
182-Day T-Bill 74.34 74.34 13.5348

Government accepted all the GHS886.47 million bids tendered by investors. This fell below the week’s target of GHS950.00 million and the GHS1,170.67 million raised by the Government at the previous auction. The 91-Day T-Bill dominated Government’s purchase with 91.61 percent share. An amount of GHS1,135.00 million is expected to be raised at the upcoming auction.

Illustrated above is the term structure of the Government of Ghana treasury securities. There was a downward shift in the left-tailed end of the curve following the rate moderation observed at the week’s auction. This however, failed to alter the normality of the curve as the upward sloping nature of the curve was sustained. This trend i.e., normality of the curve with further downward shifts, is anticipated in the upcoming auction.

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 18.55
GSE-FSI 49.51 -6.79 -6.23 -11.73 3.27

The Ghana Stocks Exchange ended the trading session on a positive note, as both the GSE Composite Index and GSE Financial Stocks Index climbed further. Factors spurring the uptrend of the indices were on the back of demand pressure in MTN Ghana Ltd and dividend announcement by CAL Bank Ltd. At the closing bell, the GSE Composite Index thus ended with a week-on-week gain of 0.02 percent to settle at 2,301.79 points, representing a year-to-date return of 18.55 percent. The GSE Financial Stocks index also recorded a week-on-week rise of 0.31 percent at an index level of 1,840.99 points, corresponding to a year-to-date return of 3.27 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 3.72 18.20 388.90
Total Value Traded (GHS M) 3.62 14.09 289.08
Market Cap (GHS M) 58,083.97 58,088.58 0.01

A total of 18.20 million volume of shares, valued at GHS14.09 million, exchanged hands during the week’s trading session. This exceeded the previous week’s record of 3.72 million shares: valued at GHS3.62 million. CAL Bank Ltd and Scancom Ghana Ltd. (MTNGH) were the most actively traded stocks, jointly accounting for 99.04 percent of the traded volume. Market capitalization also rose by 0.01 percent to GHS58,088.58 million.

Stock Price Movements

In all, five (5) equities appeared on the mover’s list after the week’s trading activities. Total Petroleum Ltd and CAL Bank Ltd were the best performers in terms of price gains as they each gained 5 pesewas to trade at GHS3.20 and 69 pesewas per share, respectively. Fan Milk Ltd and Enterprise Group Ltd also advanced by 3 pesewas and a pesewa to trade at GHS1.12 and GHS1.46 per share, respectively.

Stock Price Movers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
TOTAL 2.83 3.15 3.20 0.05 13.07
CAL 0.69 0.64 0.69 0.05 0.00
FML 1.08 1.09 1.12 0.03 3.70
EGL 1.4 1.45 1.46 0.01 4.29

On the downside, Unilever Ghana Ltd was the lone laggard, shedding 60 pesewas to close at GHS5.46 per share.

Stock Price Movers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
UNIL 8.29 6.06 5.46 -0.60 -34.14

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7290 5.7348 CAD 4.5832 4.5879
GBP 7.9175 7.9266 CFA 95.4814 95.5829
EUR 6.8627 6.8700 JPY 0.0526 0.0527
AUD 4.4299 4.4357 ZAR 0.3999 0.4002
NGN 71.4999 71.5138 CNY 0.8786 0.8794
Source: Bank of Ghana 16.04.2021

Trading on the interbank currency market ended with the Ghana cedi depreciating against the three major trading currencies. The US dollar dimmed its shine on the international currency market despite upbeat economic data from the US economy. Improved labour market data as weekly unemployment filling plunged to a new pandemic low of 576,000 against a forecast of 700,000, and a previous reading of 769,000. On the consumer front, US retail sales data rose by 9.8 percent in March to beat an expectation of 6 percent. These were unable to support the dollar on account of Fed’s unwavering commitment to rock-bottom interest rates. In spite of the dollar’s daunting outlook on the international forex market, it advanced against the cedi with 0.04 percent appreciation as its selling price rose to GH5.73. The year-to-date appreciation of the cedi thus reduced to 0.49 percent.

The British pound posted a strong rebound following the release of GDP data for the month of February 2021, which showed signs of economic recovery from the COVID-19 pandemic. UK’s GDP growth rate for February 2021 came in at 0.4 percent, to support the currency. Despite the GDP missing a forecast of 0.6 percent, it was an improvement over the 2.2 percent contraction readings recorded in January 2021. The pound’s support at the week’s trade followed the reopening of the UK’s economy after the mass vaccination of its population. This sets the stage for a faster recovery of the economy as industrial activities are tipped to improve faster. The British pound thus ended with 0.71 percent appreciation against the cedi at a selling price of GHS7.93. The year-to-date depreciation of thus widened to 0.60 percent.

The Euro jumped to its highest in six weeks on the international currency market, as it benefitted from the US dollar’s weakness. The dovish tone of US Fed to rollout stimulus package and adjust interest rates, shifted investors’ focus onto other currencies such as the Euro. The single currency also drew support from the massive vaccination within the bloc to outperform the local currency. The Euro thus finished with a week-on-week appreciation of 0.83 percent as its selling price rose to GHS6.87. The year-to-date appreciation of the cedi thus reduced to 2.87 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,128.80 4,185.47 1.37 11.43
DJIA 33,800.60 34,200.67 1.18 11.74
FTSE 100 6,915.75 7,019.53 1.50 8.65
NIKKEI 225 29,768.06 29,683.37 -0.28 8.16
FTSE/JSEAllShare 67,191.27 68,698.78 2.24 15.64
NSE All Share 38,866.39 38,808.01 -0.15 -3.63
Nairobi All Share 158.59 165.08 4.09 8.53

Wallstreet ended bullish after the week’s trading activities on the back of strong earnings from blue-chip companies and slew of upbeat economic data. Morgan Stanley had its 1st quarter earnings rising by 150 percent, to join other five banks that had already posted bullish earnings for the quarter. On the economic front, the preliminary reading of US consumer sentiment index rose to 86.5 percent in April, beating the 84.9 points reading for March 2021. These reinforced hopes of a swift economic recovery hence, sparking demand pressure on the bourse. The S&P 500 thus rose by 1.37 percent to an index level of 4,185.47 points. The Dow Jones Industrial Average also ended with a weekly gain of 1.18 percent as it settled at 34,200.67 points.

The London Stock Exchange rose above the 7,000 mark for the first time in twelve months this week. This followed demand pressure for mining stocks on the Bourse after the release of China’s growth data signalled global economic recovery. China’s economy expanded by 18.3 percent in the 1st quarter of 2021 as compared to the 6.5 percent recorded in final quarter of 2020, which offered support for mining stocks on the UK’s bourse. The FTSE 100 thus finished with a week on week gain of 1.50 percent to settle at 7,019.53 points.

The Japanese Stock Exchange went down following losses recorded within the Paper & Pulp, Railway & Bus and Real Estate sectors of its economy. The sell-off thus dragged the Nikkei 225 Index down by 0.28 percent as it settled at 29,683.37 points.

On the African equity market, the Johannesburg All Shares Index saw a week-on-week gain of 2.24 percent as it settled at 68,698.78 points. The Nairobi All Share Index also posted a weekly gain of 4.09 percent as it settled at 165.08 points. The Nigerian All Shares Index, however, shed 0.15 percent to end the week’s trade at 38,808.01 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 62.95 66.77 6.07 28.90
Gold $/ounce 1,743.30 1,779.00 2.05 -6.13
Cocoa$/metric tonne 2,354.00 2,408.00 2.29 -7.49
Coffee $/pound 1.2725 1.2915 1.49 0.70
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil finished higher on the international commodities market on account of bullish demand outlook of the energy commodity. Following the reopening of economies, global demand has been tipped by both the International Energy Agency (IEA) and OPEC to increase for the rest of 2021. Global demand is expected to increase to 5.7 million barrels per day and 5.95 million per day, respectively, by these monitoring bodies. Brent crude oil thus gained $3.82 to trade at $66.77 per barrel.

Gold posted its biggest gain in four weeks on the international commodities market as it benefitted from the US dollars weakness and falling yields on treasury securities. The yield on the US 10-year treasury Note dropped from its recent high of 1.75 percent to 1.57 percent this week, to spark a flight towards the yellow metal. Gold thus gained $35.70 to trade at $1,779.00 per ounce.

Coffee buoyed its value following the resurgence of the Brazilian real in the week under review. The strong real discouraged export from the top grower – Brazil, hence affected the availability of supply on the international commodities market. Coffee thus gained 2 cents to trade at $1.29 per pound.

Cocoa closed the week’s trade with gains, following profit taking activities which characterised most of the trading sessions in the week under review. Investors ignored data suggesting a slumped in global demand of the commodity even after the European Cocoa Association putted Cocoa processing at its lowest in 4 years, following 3 percent contraction in the 1st quarter of 2021. Cocoa thus gained $54.00 to trade at $2,408.00 per metric tonne.

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