Weekly Highlights

• Yields on 91-Day and 364-Day T-Bills rose.
• Accra Bourse resumed uptrend, lifted by 7 advancers.
• Ghana cedi lost grounds against the three major trading currencies.
• US equity market closed on a positive note as investors focused on growth prospects of stocks.
• Brent crude oil rebounded on improving demand outlook.

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 11.10
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 (% ofGDP) 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
May31- Jun04 12.78 13.51 16.49 17.60 17.70 18.30
May 24 – 28 12.76 13.54 16.42 17.60 17.70 18.30
May 17 – 21 12.79 13.55 16.42 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 recently held auction, interest rates on the GoG treasury securities were mixed adjusted. The yield on the 91-Day T-Bill rose by 2 basis points to 12.78 percent. That on the 364-Day T-Bills also inched up by 7 basis points to 16.49 percent but the yield on the 182-Day T-Bill shed 3 basis points to 13.51 percent. Yields on Government Bonds and treasury notes, however, remained unchanged.

Results of Auction held on 28th May, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 1,500.59 1,468.33 12.7799
182-Day T-Bill 102.24 99.85 13.5055
364-Day T-Bill 249.84 249.38 16.4871

At the auction, Government accepted GHS1,817.56 million worth of bids out of GHS1,852.67 million bids tendered by investors. The GHS1,177.00 million targets set by the Government was exceeded by GHS640.56 million. The 91-Day T-Bill was the most accepted bids with a share composition of 80.79 percent. An amount of GHS1,281.00 million is expected to be raised from the sale of 91-Day, and 182-Day T-Bills at the next auction.

The yield curve, as largely anticipated, sustained its normality as rate moderations at the auction were insignificant to alter the curve. This development of steady moderation in treasury yields coupled with economic recoveries on both the international and domestic fronts will trigger a downward review of the policy rate by the Monetary Policy Committee of the Bank of Ghana. A policy rate cut is imperative to boost private sector spending and investments, due to its potential effect on lending rate reduction.

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 24.70
GSE-FSI 49.51 -6.79 -6.23 -11.73 6.74

The Accra Bourse recovered from the previous week’s decline lifted by seven advancers. At the closing bell, the GSE Composite Index clocked a week-on-week gain of 0.20 percent as it settled at 2,421.11 points, corresponding to a year-to-date gain of 24.70 percent. The GSE Financial Stocks Index also registered a week-on-week gain of 0.23 percent as it settled at an index level of 1,840.99 points to record a year-to-date return of 6.74 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 15.78 20.62 30.64
Total Value Traded (GHS M) 25.18 19.54 -22.42
Market Cap (GHS M) 59,283.27 59,333.16 0.08

At the closing bell, a total of 20.62 million shares valued at GHS19.54 million exchanged hands in twenty equities. This outstripped the previous week’s outturn of 15.78 million shares worth GHS25.18 million. MTN Ghana Ltd and CAL Bank Ltd were the most actively traded stocks as they jointly accounted for 93.05 percent of the overall traded shares. Market capitalization also improved by 0.08 percent to settle at GHS59,333.16 million on the account of the bearish closure of the benchmark index.

Stock Price Movements

At the pairing of the week’s opening and closing prices, a total of eight (8) equities altered their share prices. Seven (7) advancers and a lone laggard were reported. Standard Chartered Bank Ltd led the bulls with capital appreciation of 30 pesewas as it settled at GHS18.50 per share. Fan Milk Ltd and Pesewa One Plc followed suite with price gains of 6 pesewas and 5 pesewas to trade at GHS1.32 and 65 pesewas per share, respectively. Ghana Oil Company Ltd and Société Générale Ghana Ltd had their share prices rising by 4 pesewas and 3 pesewas to trade at GHS1.55 and 87 pesewas per share, respectively. Other advancers were Total Petroleum Ltd, GCB Bank Ltd and Enterprise Group Ltd.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
SCB 16.31 18.20 18.50 0.30 13.43
FML 1.08 1.26 1.32 0.06 22.22
POP 0.60 0.60 0.65 0.05 8.33
GOIL 1.50 1.51 1.55 0.04 3.33
SOGEGH 0.64 0.84 0.87 0.03 35.94
TOTAL 2.83 3.25 3.27 0.02 15.55
GCB 4.05 5.20 5.22 0.02 28.89

On the flipside, CAL Bank Ltd shed a pesewa to trade at 79 pesewas per share.

Stock Price Laggards in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
CAL 0.69 0.80 0.73 -0.07 5.80

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7387 5.7445 CAD 4.7514 4.7560
GBP 8.1364 8.1451 CFA 93.7336 93.8261
EUR 6.9912 6.9981 JPY 0.0522 0.0523
AUD 4.4237 4.4285 ZAR 0.4166 0.4169
NGN 71.5393 71.5828 CNY 0.9014 0.9017
Source: Bank of Ghana 28.04.2021

The Ghana cedi traded defensively against the three major trading currencies on the international currency market. The US dollar advanced on the international currency market, buoyed by chains of upbeat economic data from the US economy which are likely to compel the Fed to reconsider its position of leaving interest rate unchanged. Weekly unemployment filling benefits sustained its downtrend as it dropped to 406,000, the lowest since the onset of the pandemic. US’ economy expanded by 6.4 percent, the highest quarterly growth since 2003, whereas Business spending jumped by 2.3 percent in April from its previous record. On the back of this, the US dollar recorded 0.18 percent week-on-week appreciation against the local currency as its selling price rose to GHS5.74 on the interbank currency market. The year-to-date appreciation of the cedi thus reduced to 0.32 percent.

The British pound gained support after hawkish commentary by the Bank of England on interest rate outlook in the UK. Gertjan Vlieghe – a senior member of the bank hinted on the possibilities of interest rate rising from the recent low of 0.10 percent, following the pace of recovery of the UK’s economy and a bullish inflation outlook. The British pound thus ended the week’s trading with 0.25 percent appreciation against the cedi at a selling price of GHS8.15 on the interbank currency market. The year-to-date depreciation of the local currency thus rose to 3.27 percent.

The Euro posted a marginal appreciation on the international forex market as its support in the week’s trade was nearly eroded by negative developments. The European Central Bank’s indication of easing its support to the economy and Germany’s economic contraction in the 1st quarter of 2021, took some shine from the shared currency which was enjoying support from Germany’s business sentiment report. The Index jumped more than expected to 99.2 points in May, the highest in 2 -years. The euro thus saw 0.12 percent appreciation against the cedi at a selling price of GHS7.00. The year-to-date appreciation of the cedi thus lowered to 0.99 percent.

International Market
Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,155.86 4,204.11 1.16 11.93
DJIA 34,207.84 34,529.45 0.94 12.82
FTSE 100 7,018.05 7,022.61 0.06 8.70
NIKKEI 225 28,317.83 29,149.41 2.94 6.21
FTSE/JSEAllShare 66,238.94 67,554.86 1.99 13.71
NSE All Share 38,324.07 38,256.99 -0.18 -5.00
Nairobi All Share 165.76 172.69 4.18 13.53

Wallstreet closed the trading week in the gains as investors brushed off bullish inflation reading for growth potential of stocks. US inflation came in stronger at 0.7 percent in April, beating a forecast of 0.6 and a previous rate of 0.4 percent. This is expected to reverse recent position of the US Fed in keeping its policy rate low. The S&P 500 thus posted a week-on-week gain of 1.16 percent as it settled at 4,204.11 points. The Dow Jones Industrial Average also gained 0.94 percent after settling at 34,529.45 points.

The London Stock Exchange finished the week’s trading with the FTSE 100 index climbing northwards. This comes on the back of the relative moderation of the pound sterling against the US dollar which boosted demand from multinationals. The FTSE 100 thus saw 0.06 percent rise after the week’s trade at to settle at 7,022.61 points.

The Japanese Stocks Exchange registered another round of weekly gain, lifted by an expectation that the Central Bank of Japan will extend its emergency interventions given to the society to combat the pandemic. The Nikkei 255 thus upped by 2.94 percent to settle at 29,149.41 points.

On the African equity market, he Johannesburg All Share Index finished 1.99 percent higher at 67,554.86 points. The Nairobi All Share Index also rose by 4.18 percent to settle at 172.69 points. Interest rate on the Nigerian All Share Index, however, dropped by 0.18 percent to 38,256.99 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 66.44 69.63 4.80 34.42
Gold $/ounce 1,881.85 1,905.30 1.25 0.54
Cocoa$/metric tonne 2,456.00 2,412.00 -1.79 -7.34
Coffee $/pound 1.501 1.6235 8.16 26.59
Source:www.bloomberg.com, & www.investing.com

Brent crude oil overturned previous week’s declines as upbeat demand outlook counters supply concerns on the international commodities market. Global oil demand is projected to move towards the 100 million barrels per day in the 3rd quarter, following the progress associated with the global vaccination against the pandemic. This helped subdue supply concerns in the event Iran’s sanctions are lifted. Brent crude oil thus rose by $3.19 to trade at $69.63 per barrel.

Gold finished the trading week on a positive note, as it made of its most gains prior to Friday’s slide. Falling yields on treasury securities, coupled with lack of data on inflation outlook in the US, supported Gold, prior to Friday’s slide. Gold, however, trimmed its gains as the US dollar resurged to reduce transaction by non-dollar holders. Gold saw $23.45 appreciation as it finished at $1,905.30 pr ounce.

Coffee appreciated in value on the international commodities market after the Brazilian agency – Marex indicated that production was much lower than reported due to low soil moisture. Coffee production in Brazil was noted to have fallen by 23 percent year-on-year. Coffee thus gained 12 cents to trade at $1.62 per pound.

Cocoa traded lower on account of rising supply from Ivory Coast onto the international commodities market. Data on cocoa export from Ivory Coast between 1st October 2020 and 23rd May 2021 saw a yearly increment of 8.6 percent to 2.15 million metric tonnes. This weighed on the soft crop to loss lose $44.00 settling at $2,412.00 per metric tonne.

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