Weekly Highlights

• GoG Treasury yields retreated.
• The Ghana Stock Exchange recorded mixed outturns.
• The local currency lost grounds to the U.S dollar and the Euro.
• International equity market ended the week on an impressive note.
• Crude Oil prices ease despite weaker demand forecasts.

Macroeconomic Update

Key Ghana Economic Data

Indicator 2018 2019 2020 2021 2021
Target Actual
Inflation CPI (y-o-y %) 9.40 7.90 10.40 8± 2 7.80
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 10.1
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 13.50
GDP Growth (y-o-y %) 6.3 6.5 0.4 5.00 3.1
Budget Deficit (% of GDP) 3.8 4.5Sep 11.7 9.50 5.1 Q2
Public Debt (% of GDP) 57.6 63.00 68.3 n/a 77.1
Fx. Reserves (M. Cover) 3.7 4.1 4.1 4.00 5.0
Source: BOG; MOFEP; GSS.

Government of Ghana Treasury Securities

Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Aug 16–Aug 20 12.47 13.26 16.11 17.25 17.70 18.80
Aug 9–Aug 13 12.52 13.31 16.29 17.25 17.70 18.80
Aug 2 – Aug 6 12.55 13.37 16.40 17.25 17.70 18.80
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.

Yields on GoG Treasury securities retreated at the close of the last auction on Friday. Both the 91-Day and 182-Day T-Bills eased by 5 basis points to 12.47 percent and 13.26 percent respectively, while the 364-Day T-bill trended in a similar direction, shaving 18 basis points to close at 16.11 percent. The GoG Treasury Note and bonds remained unchanged as they were not included in the week’s auction.

Results of Auction held on 13th August, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 985.74 985.74 12.4702
182-Day T-Bill 172.12 172.12 13.2555
34-Day T-Bill 158.69 158.69 16.1134

At the last auction, Government accepted all the GHS1,316.55 million worth of bids tendered by investors exceeding that week’s target by GHS 155.55 million with the 91-Day T-bill dominating government’s purchases. For the next auction, government is seeking to raise a total of GHS596.00 million from the sale of the 91-Day and 182 Day securities.

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 41.34
GSE-FSI 49.51 -6.79 -6.23 -11.73 7.12

The Accra bourse ended the week’s trading activities, registering mixed outturns to investors. The GSE Composite Index inched up marginally by 2.60 points to close at 2,744.25, with year-to-date returns to 41.34 percent, while GSE Financial Stock Index shaved 1.78 points to record 1,909.61, easing investors’ year-to-date gains to 7.12 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 5.79 2.48 -57.08
Total Value Traded (GHS M) 6.43 4.10 -36.21
Market Cap (GHS M) 62,648.18 62,675.43 0.04

At the closing bell, a total of 2.48 million shares valued at GHS 4.10 million were traded in fourteen equities. MTNGH continued its dominance as the most active stock leading the activity chart by 77 percent of all volumes traded. The market capitalization, thus, shifted marginally by 4 basis points to settle at GHS 62,675.43 million.

Stock Price Movements

A total of four equities witnessed price movements: three advancers and a laggard. Unilever Ghana PLC continued its rally, extending by 26 pesewas to settle at GHS2.92 per share, translating to a year-to-date loss of 64.78 percent to shareholders.

Stock Price Advancers in terms of WK closing price
Equity Yr. Open Wk. Open Wk. End Wk. Change YTD (%)
UNIL 8.29 2.66 2.92 0.26 -64.78
TOTAL 2.83 4.01 4.2 0.19 48.41
EGH 7.20 7.30 7.31 0.01 1.53

Standard Chartered Bank Ghana PLC (SCB) was the only bear for the week as it trimmed 10 pesewas off its share price to close the week at GHS 18.50 per share, with a year-to-date gain of 13.43 percent.

Stock Price Laggards in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change YTD (%)
SCB 16.31 18.60 18.50 -0.10 13.43

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.8192 5.8250 CAD 4.6511 4.6558
GBP 8.0631 8.0717 CFA 95.4550 95.5495
EUR 6.8651 6.8719 JPY 0.0530 0.0531
AUD 4.2912 4.2966 ZAR 0.3957 0.3961
NGN 70.5982 70.6154 CNY 0.8981 0.8990
Source: Bank of Ghana 16.08.2021

The U.S. dollar fell sharply on Friday in a week of volatility as investors were treated to a mixed bag of economic data. The University of Michigan's consumer sentiment for the US dipped to 70.2 in the first half of August, shy of the market’s projection of 81.2, the same recorded for the month of July 2021. This was the lowest since 2011, feeding concerns that the rapid spread of the highly contagious Delta variant could hamper the global economic recovery. U.S. Producer Prices data released on Thursday showed surging prices, underpinning the case for the Federal Reserve removing some of its stimulus while consumer price data on Wednesday, which indicated inflation may be peaking, also potentially gives the Fed room to remain accommodative for longer than expected. On the local front, the U.S. dollar lowered its weekly appreciation against the Ghana cedi against the Ghana cedi by 0.30 percent to trade at GHS 5.82 on the interbank forex market. The year-to-date depreciation of the cedi to the dollar inched up marginally to 1.06 percent.

The British pound reversed its rally on the international currency market
after mixed data from the UK failed to impress investors bet on the sterling. The mixed sentiment comes on the back of data release, showed business investment, industrial production and the UK’s balance of trade all missed market forecasts. Despite an uptick in the second quarter of 2021, the U. K’s GDP still stands at 4.4 percent below pre-pandemic levels, which means the UK economy is lagging other G7 nations. The British economy is not out of the woods yet as the global pandemic lingers with weekly confirmed cases hitting more than 6.5 percent and death rate on the modest rise in recent days. Furthermore, the UK’s vaccination program has started to trend downwards, an impressive initial rollout and now been overtaken by six EU countries in terms of double vaccinations. On the interbank forex market, the Pound sterling, however, appreciated against the cedi 0.02 percent weekly to close the week at a price of GHS 8.07 and a year-to-date gain of 2.39 percent.

The Euro made considerable gains on the back of positive economic data from the Euro area showing a trade surplus of €18.1 billion far beyond investors’ projection of €12.3 billion, amid a good fight to the global pandemic. Recent figures have also shown that Eurozone countries are ahead of most other countries in the fight against the deadly delta variant. Although slow to starting, the bloc is now vaccinating at twice the rate of the U.S or UK, with Spain, Portugal, and Denmark in the lead. The common currency, thus, appreciated against the local currency at a rate 0.35 percent week-on-week, trading at GHS 6.87 with a year-to-date depreciation of 2.84 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,436.52 4,468.00 0.71 18.95
DJIA 35,208.64 35,515.91 0.87 16.04
FTSE 100 7,122.95 7,218.71 1.34 11.74
NIKKEI 225 27,820.04 27,977.15 0.56 1.94
FTSE/JSEAllShare 68,673.94 69,384.76 1.04 16.79
NSE All Share 38,811.11 39,533.97 1.86 -1.83
Nairobi All Share 178.50 181.18 1.50 19.11
Source: www.bloomberg.com, www.investing.com & www.tradingeconomics.com

Wallstreet continued its uptrend, recording a second week straight gains as investors embraced strong earnings results of tech companies, upbeat labour market performance and the Senate's passage of a massive infrastructure bill, amid a dip in US inflation. U.S. inflation showed rising price growth may be peaking, which could ease pressure on the Federal Reserve to begin tapering its asset purchases. Investors now await the minutes of the Fed's upcoming policy meeting for policy cues on the trajectory of the US economy. The S&P 500 and the Dow Jones Industrial Average extended their levels to end the week’s trading at 4,468.00 and 35,208.64 respectively.

The London bourse extended its rebound, as investors welcomed a batch of upbeat economic data during the week, as well as strong earnings reports. Economic data showed, the UK economy grew more than expected in June as restrictions were lifted, while exports of goods to the EU recorded above pre-Brexit levels for a two straight month. On the corporate side, the near successful takeover of asthma drug maker by tobacco giant Philip Morris underpinned investors’ bet on the bourse. The FTSE 100, thus, lifted to an index level of 7,218.71, bringing its year-to-date to 1.94 percent.

Japan's economy rebounded, beating market expectation for the second quarter of 2021 after a slow-down in the first quarter as data showed consumption and capital expenditure were recovering from the global pandemic's initial hit. Initial GDP data released earlier in the week showed, the world's third-largest economy grew at an annualized rate of 1.3 percent in Q2 of 2021, after a revised 3.7 percent slump in the first quarter, beating a median market forecast for a 0.7 percent gain. The Nikkei 225, thus, rose by 0.56 percentage to close the week at an index level of 27,977.15.

On the African front, the Johannesburg All Share Index and the Nigerian All Share Indices lifted their prices week-on-week to close at 69,384.76 and 39,533.97, respectively. The Nairobi All Share index likewise inched up by 1.50 percentage points to settle the week’s trading activities to 181.18.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 70.7 70.59 -0.16 36.27
Gold $/ounce 1,763.10 1,778.20 0.86 -6.17
Cocoa$/metric tonne 2,417.00 2,547.00 5.38 -2.15
Coffee $/pound 1.760 1.8275 3.84 42.50
Source:www.bloomberg.com, www.investing.com & www.tradingeconomics.com

It was a week of volatility for crude oil on the international commodity market, dipping two straight days on Friday on the back of short fall in demand on the global front. Growth in demand for crude moderated in July and is set to rise at a slower pace over the rest of 2021, amid surging infections of the delta variant of covid-19, the International Energy Agency (IEA) said on Thursday. In the short term, analysts have dropped forecast for the global demand deficit to 1 million barrels per day (bpd), from the earlier estimate of 2.3 million bpd, citing an expected decline in demand in the months of August and September 2021. In sharp contrast, OPEC+ on Thursday stayed put to its forecasts for a rebound in global oil demand this year and further growth in 2022, notwithstanding the threats the pandemic continues to pose. Brent crude oil went down by 11 cents to trade at $70.59 per barrel at the close of week.

Gold prices ended the week on a positive note, as investors shifted to safety over the rapid spread of the Delta strain of COVID-19 in several countries. In China, tighter restrictions in the country are reportedly starting to hit more parts of the economy, with port congestion worsening. On the data front, US Producer Prices recorded their largest annual rise in over a decade, due to supply chain challenges, while jobless claims trended down for a third straight time last week. The precious metal thus added $15.10 to its value to close the week at $1,778.20 per ounce.

Cocoa extended its weekly gains on the international commodity market as demand pressure is projected to heighten in the months ahead. The soft cash crop thus rose by 130 bucks to bring its market value to $2,547.00 per metric tonne at the end of trading.

Coffee continued its uptick in value on the international market, as supply chain issues are likely to worsen and projected to reduce next year’s crop, inspired by cold snap in Brazil, the world’s biggest coffee producer. The price of the cash crop futures traded on Intercontinental Exchange Inc. markets this year, has averaged in the region of $1.43 per pound, the highest in seven years, according to research. At the close of the week’s trade, the price of coffee lifted by 7 cents to trade at to $1.83 per pound.

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