Weekly Highlights

• Consumer Price Inflation settled at 8.50 percent in April 2021
• Yield on 364-Day T-Bill trimmed by 243 basis points.
• GSE closed the trading week in the red on account of profit taking in MTN Ghana Ltd.
• Ghana cedi sustained week-on-week appreciation against the US Dollar.
• Wallstreet tumbled as stimulus package support fades.
• Brent crude oil rose marginally on account of supply disruption.

Macroeconomic Update

Consumer Price Inflation settled at 8.50 percent in April 2021

Headline Inflation dropped to its lowest in twelve months as it settled at 8.50 percent in April from a previous rate of 10.30 percent. Inflation thus returned to single digit on account of the significant cut in inflation within the food and non-alcoholic beverages sub-sector. Inflation within the sector dropped by 358 basis points from a previous rate of 10.08 percent to 6.50 percent in April. Among the key drivers within the sub-sector was the Fruits and Nuts, which recorded a deflation of 0.4 percent in April. Non-food inflation, on the other hand, surged by 20 basis points from 10.00 percent in March 2021 to 10.20 percent in April. This driven by the Transport (9.6%) and Insurance and Financial Services (9%) components within the sub-sector. At the regional levels, Greater Accra Region dominates with the highest inflation of 12.1 percent. This was followed by the Ashanti Region of 10.1 percent, with the least inflation recorded in Upper West of 2.0 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 8.50
Inflation PPI
(y-o-y %) 4.40 13.00 7.00 n/a 13.00
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 14.50
GDP Growth
(y-o-y %) 6.3 6.5 0.4 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
May 17 – 21 12.39 12.69 14.10 17.60 17.70 18.30
May 10 – 14 12.79 13.57 16.53 17.60 17.70 18.30
May 03 – 07 12.84 13.53 16.53 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 last Friday’s auction, the yield on the 91-Day dropped by 40 basis points to 12.39 percent. That on the 182-Day T-Bill went down by 88 basis points to settle at 12.69 percent. Interest rate on the 364-Day T-Bill, also dipped by 243 basis points to settle at 14.10 percent. The yields on the other treasury securities were unchanged as they were not part of the week’s issuance.

Results of Auction held on 14th May, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 1,038.24 953.19 12.7880
182-Day T-Bill 176.32 168.49 13.5522
364-Day T-Bill 104.58 104.58 16.4195

Out of the GHS1,319.14 million bids tendered by investors, Government accepted a total of GHS1,226.26 million bids. This exceeded the week’s target of GHS1,278.00 million by an amount of GHS92.88 million. The 91-Day T-Bill was the most accepted bid by the Government as it constituted 77.73 percent of the overall bids raised. Government anticipates raising a total of GHS791.00 million through the sale of the 91-Day and 182-Day T-Bills.

The yield sustained its normality after the week’s auction despite the significant cut in yields of the short-dated treasury securities. The persisting decline in yields on the short-dated treasury securities is to encourage investors to lock up their funds in longer-dated instruments as this provides a competitive return. Such a drift will reduce frequent payment of interest and subsequently aid Government to better plan and execute long term investment projects.

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 32.64
GSE-FSI 49.51 -6.79 -6.23 -11.73 5.97

Trading on the Ghana Stock Exchange ended in the red on account of profit taking activities in MTN Ghana Ltd and CAL Bank Ltd. The selling of some shareholdings by investors for capital gains weighed on the market indices. The GSE Composite Index thus went down by 4.47 percent after the week’s trade as it settled at an index level of 2,301.79 points, corresponding to a year-to-date gain of 32.64 percent. The GSE Financial Stocks Index also went down by 9 basis points to settle at 1,889.27 points, trimming its year-to-date gain to 5.97 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 16.22 6.25 -61.46
Total Value Traded (GHS M) 20.87 7.01 -66.41
Market Cap (GHS M) 62,207.37 60,947.10 -2.03

The holiday-shortened week realized a total of 6.25 million shares valued at GHS7.01 million. This fell below the 16.22 million shares worth GHS20.87 million, which exchanged hands at the previous week’s trading session. MTN Ghana Ltd led the activity chart with a 64.82 percent share of the overall traded volume. Market capitalization also went down by 2.03 percent to settle at 60,947.10 points.

Stock Price Movements

In all, a total of six (6) equities appeared on the mover’s list, four (4) advancers and two (2) laggards. New Gold Ltd topped the advancers with GHS1.55 pesewas gain to trade at GHS102.15 per share. Enterprise Group Ltd also inched up by 3pesewas to trade at GHS1.52 per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
GLD 105.50 100.60 102.15 1.55 -3.18
EGL 1.4 1.49 1.52 0.03 8.57

On the flipside, Unilever Ghana Ltd was the worst performer as it shed 35 pesewas to trade at GHS3.25 per share. MTN Ghana Ltd tumbled by 10 pesewas to trade at GHS1.14 per share. CAL Bank Ltd and SIC Ghana Ltd also went down by 2 pesewas and a pesewa to close at 82 pesewas and 7 pesewas per share, respectively.

Stock Price Laggards in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
SIC 0.08 0.08 0.07 -0.01 -12.50
CAL 0.69 0.84 0.82 -0.02 18.84
MTNGH 0.64 1.24 1.14 -0.10 78.13
UNIL 8.29 3.60 3.25 -0.35 -60.80

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7278 5.7336 CAD 4.7292 4.7337
GBP 8.0722 8.0809 CFA 94.2670 94.3606
EUR 6.9516 6.9585 JPY 0.0524 0.0524
AUD 4.4535 4.4582 ZAR 0.4058 0.4062
NGN 71.6579 71.6614 CNY 0.8901 0.8907
Source: Bank of Ghana 14.04.2021

The Ghana cedi posted a mixed performance on the interbank currency market as it appreciated against the US dollar but lost grounds versus the British pound and the Euro.

The US dollar on the international currency market rebounded from the negative effect of rising unemployment filling data, which affected the greenback’s outturn in the previous week. This follows the speculation that recent achievements within the sector was unsustainable, hence, affected the value of the dollar. The rebound of the greenback, in the week’s trade, comes on the back of a further improvement of the labour market statistics as unemployment filling claims resumed its downtrend to a pandemic low of 473,000, better than forecasts of 490,000. The greenback was further supported as inflation rose to its highest in a decade to 4.2 percent in April, compared to a forecast of 3.6 percent and a previous rate of 2.6 percent. Despite the US dollar’s rebound on the international currency market, it posted a week-on-week depreciation of 0.02 percent to trade at GHS5.73 on the interbank currency market, following the domestic supply boost initiative by the Government as a means of mitigating the volatility of the dollar. The year-to-date appreciation of the cedi thus rose to 0.51 percent.

The British pound gained support after the UK’s GDP data beat market expectation of a 1.7 percent contraction for the 1st quarter of 2021 due to the stringent lockdown restrictions during the period. UK’s GDP for the 1st quarter contracted by 1.5 percent as a separated report indicated a 2 percent growth in the last month of the first quarter as economic activities begun resuming. The British pound thus finished with a week-on-week gain of 0.72 percent, as its selling price jumped to GHS8.08 on the interbank currency market. The year-to-date depreciation of the cedi thus widened to 2.50 percent.

The Euro lost steam on the international currency market on account of the resurgence in the US dollar and other upbeat developments in the Eurozone bond market. Interest rates on bonds ticked up especially on the Germany 10-year bond, which rose from minus 0.122 percent to minus 0.097 percent – the first time higher than minus 0.1 percent in twenty-four months. Inflation in the regions is tipped to be much higher than that recorded in the US. These positive developments got investors worried about the next monetary policy direction of the European Central Bank, which negatively affected the value of the Euro on the international forex market. The Euro thus depreciated by 0.11 as it traded at GHS6.96 on the interbank currency market. The cedi thus ended with a year-to-date appreciation of 1.56 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,181.17 4,173.85 -1.39 11.12
DJIA 33,879.00 34,382.13 -1.14 12.34
FTSE 100 6,969.81 7,043.61 -1.21 9.03
NIKKEI 225 28,812.63 28,084.47 -4.34 2.33
FTSE/JSEAllShare 66,936.99 66,598.13 -2.80 12.10
NSE All Share 39,840.28 39,494.70 0.75 -1.93
Nairobi All Share 168.04 165.76 -3.12 8.97

US equity market posted its worst week-on-week decline in three months as investors got worried about disappointing retail sales data for April 2021. Retail sales in the US remained unchanged from the upwardly revised figure of 10.7 percent in the prior month. This missed market expectation of a growth rate of between 0.8 percent and 1.0 percent. The zero growth in retail sales raised heavy concerns about how the recent support from the stimulus package has faded in supporting the US economy. The S&P 500 thus went down by 1.39 percent to settle at 4,173.85 points. The Dow Jones Industrial Average also dipped by 1.14 percent to settle at 34,382.13 points.

The London Stock Exchange closed in the red on account of a heavy sell-off witnessed in mining sector stocks following downward prices in Copper and Iron on international prices. Blue chip stocks within the mining sector, Rio Tinto and Antofagasta, were the most performers on the bourse. The FSTE 100 thus went down by 1.21 percent to settle at 7,043.61 points.

The Japanese Stocks Exchange tumbled on account of falling prices in shares of its Paper & Pulp, Railway & Bus and Real Estate sectors. At the closing bell, the Nikkei 225 thus went down by 4.34 percent to settle at 28,084.47 points.

On the African equity market, the Nigerian All Share Index advanced by 0.75 percent to settle at 39,494.70 points. The Johannesburg All Share Index, however, went down by 2.80 percent to end the week’s trade at 66,598.13 points. The Nairobi All Share Index also posted a week decline of 3.12 percent to settle at 165.76 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 68.28 68.71 0.63 32.64
Gold $/ounce 1,831.95 1,843.85 0.65 -2.70
Cocoa$/metric tonne 2,422.00 2,474.00 2.15 -4.96
Coffee $/pound 1.523 1.4425 -5.29 12.48
Source:www.bloomberg.com, & www.investing.com

Brent crude oil rose marginally at the close of the week’s trade despite oscillating events, which affected both the demand and supply side of the oil market. The attack on Colonial Pipeline, the largest pipeline in the US saw prices of the commodity rising but was almost completely erased on account of the reopening of the pipeline and Covid crisis in India, which affected the demand side. Brent crude oil thus added 43 cents to close at $68.71 per barrel.

Gold was little changed on the international commodities market as signs of inflationary pressures across the advanced economies offered little push to the yellow metal. US inflation rose to a decade high of 4.2 percent in April with other bullish inflation expectations for the Eurozone and the UK economies. This offered marginal support to the yellow commodity. Gold thus gained $11.90 to trade at $1,843.85 per ounce.

Coffee lowered its unit price on the international commodities market on account of over supply concerns. Data by the International Coffee Exporters indicated that inventories rose to its highest in about 13 months of 2.02 million bags during the week on account of improved climatic conditions in top growers – Brazil and Vietnam. Coffee thus shed 8 cents to close at $1.44 per pound.

Cocoa posted gains, as recent hawkish commentary by top chocolate producers about the positive demand outlook of the commodity buoyed the value of the soft crop. The projection that demand will pick up in the second half of 2021, following easing pandemic uncertainties lifted the soft crop. Cocoa thus upsurged by $52.00 to trade at $2,474.00 per metric tonne.

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