• 2-Year T/Note raised by 145 basis points.
• Market indices upped their values on reduced selling pressure in some blue-chip stocks.
• Ghana Cedi depreciated against all three major trading currencies.
• Global equity market closed mixed.   
• Gold tumbled as its safe-haven appeal dimmed, but Brent crude oil, Cocoa and Coffee advanced.

Source: BOG; MOFEP; GSS.     * represents provisional estimate

Government of Ghana Treasury Securities

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 rose by a basis point to 14.69 percent. That on the 182-Day T-Bill also upped by a basis point to settle at 15.15 percent. Interest rate on the 2-Year Note, also increased by 145 basis points to 20.95 percent. Interest rates on the 364-Day T-Bill and treasury notes and bonds however, remained unchanged.

The GHS961.13 million bids tendered by investors were all accepted by the Government. This exceeded the week’s target of GHS958.00 million and the previous week’s amount of GHS615.86 million. Government also raised an amount of GHS591.03 million from the issuance of the 2-Year Note bringing total bids accepted to GHS1,552.11 million. In the upcoming auction, an amount of GHS826.00 million is expected to be raised from the sale of the 91-Day, 182-Day and 364-Day T-Bills.

Illustrated above is the term structure of the Government of Ghana treasury securities. The rate adjustment recorded at the auction was unable to alter the normality of the yield curve. This follows commitment by the Bank of Ghana to improve the investment climate of the domestic economy by making returns on long dated treasury securities attractive than their short-dated ones amidst the improving macro-economic indicators in recent times. 

Ghana Stock Exchange

At the close of the truncated week, market indices upped their values following reduced selling pressure recorded in some blue-chip stocks. The GSE Composite Index thus finished with a week-on-week gain of 1.13 percent as it settled at an index level of 2,162.05 points, representing a year-to-date loss of 15.95 percent. The GSE Financial Stocks Index recorded a week-on-week rise of 2.29 percent as it settled at 1,829.75 points, corresponding to a year-to-date loss of 15.04 percent.

Market outturn in the week under review dwindled as compared to the previous week’s market activities. A total of 0.75 million shares worth GHS0.76 million exchanged hands as compared to the 5.13 million shares valued at GHS9.00 million recorded at the previous trading session. MTN Ghana Ltd dominated market activities as it accounted for 64.63 percent of the overall traded volume. Market capitalization, however, rose by 0.45 percent to settle at 55,811.46 percent.

Stock Price Movements

At the paring of the week’s opening and closing prices, a total of 5 equities altered their share prices. Standard Chartered Bank Ltd topped the gainers with GHS1.00 pesewas rise to trade at GHS14.00 per share. Access Bank Ghana Ltd followed with price appreciations of 45 pesewas to trade at GHS2.88 per share. Total Petroleum Ltd and GCB Bank Ltd also upturned by 23 pesewas and 5 pesewas to trade at GHS3.15 and GHS4.90 per share respectively.

Ghana Oil Company was the lone laggard recorded on the bourse; it trimmed a pesewa to close at GHS1.66 per share.  

Currency Market

Source: Bank of Ghana 05.12.19

The Ghana cedi depreciated against all three major trading currencies on the interbank currency market. The US dollar tumbled on account of weak economic data from the US economy. The PMI for US Manufacturing sector missed the 54.70 points targets as it dropped to 53.9 points; claims for unemployment benefits also shot up in November 2019 to affect market sentiments in the week under review. The heightened trade uncertainties between the US and China following Trump’s indication that a deal is unlikely to occur until November 2020 also dimmed the appeal of the greenback on the international currency market. Despite this, the US dollar recorded a week-on-week appreciation of 0.21 percent as it traded at GHS5.54 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 12.95 percent.

The British pound hit a two and half year high on the international currency market sparked by easing political worries. Recent polls indicating that the ruling Conservative Party has widened its lead ahead of the upcoming election on December 12 averted fears of no single political party having a majority stake in the House of Commons. This raised investors’ hopes of a smooth Brexit transition to lift the value of the Pound. The British pound thus surged by 14 pesewas to sell at GHS7.28 corresponding to a week-on-week appreciation of 2.00 percent. The year-to-date depreciation of the cedi thus increased to 15.18 percent.

The Euro dimmed its outlook on the international currency market as weaker-than-expected data from the bloc dampened hopes of a recovery in the region. The PMI for Eurozone’s services sector fell to 51.9 points in November against the previous reading of 52.20 points. Germany’s industrial activities also recorded contractions in the month of October with industrial orders dropping by 0.4 percent, missing a growth expectation of 0.3 percent. Industrial production also tumbled by 0.6 percent compared to market expectation of a 0.4 percent decline. Despite the euro’s decline it posted a week-on-week appreciation of 1.09 percent as it traded at GHS6.15 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 10.27 percent.

International Markets

US equity market closed on a mixed note despite a strong rebound last Friday spurred by last minute release of better-than-expected labour market statistics which showed a 266,000 rise in payroll employment with unemployment rate down to 3.5 percent in November. This dimmed trade and political uncertainties in the region which took a toll on market activities in the region. The S&P 500 thus finished with a week-on-week gain of 0.16 percent to settle at 3,145.91 points. The Down Jones Industrial Average, however, ended with a week-on-week loss of 0.13 percent as it failed to overturn previous day’s losses to settle at 288,015.06 points.

The London Stock Exchange tumbled on account of a resurgent pound which dimmed risk taking sentiment among multinational investors. The pound was boosted from polls suggesting a victory for the ruling party, negatively affected demand as it made stocks relatively expensive for non-pound holders. The FTSE 100 thus went down by 1.45 percent to settle at an index level of 7,239.66 points. 

The Japanese Stock Exchange closed the trading week in the gains lifted by hawkish commentary by Japanese Finance Minister – Taro Aso on the negative interest policy by the central and its intention to stimulate economic activities in the region. The Nikkei 225 thus recorded a 0.26 percent rise to settle at 23,354.40 points.

On the African equity market, the Nairobi All Share Index recorded a week-on-week gain of 1.49 percent to settle at 160.29 points. The Johannesburg All Share Index, however, saw a 0.08 percent decline after the week’s trade to settle at 55,307.31 points. The Nigerian All Share Index also went down by 0.54 percent to close at 26,855.52 points.

Source:www.bloomberg.com, & www.investing.com

Brent crude oil upped its value on the international commodities market as OPEC and its allies agreed to deepen supply cut next year as measures to prevent global supply glut of the commodity. Brent crude oil thus recorded a gain of $1.96 to trade at $64.39 per barrel.

Gold lost marginally as the upbeat US’ labour market statistics last Friday dimmed the demand for the safe-haven commodity.  Bullish job creation and unemployment rate data wiped out all previous day’s gains arising from Trump’s intention to prolong the trade negotiations much longer-than expected. Gold thus went down by $7.60 to trade at $1,465.10 per ounce.

Cocoa recorded gains after the global commodities trader – Cargill announced plans to expand cocoa processing facilities in Ivory Coast and Ghana as measures of reducing infestation to the beans during bumper harvest. The investment which is worth about $113.00 million will significantly contribute to the socio-economic landscape of these economies by creating both direct and indirect jobs. Cocoa thus added $59.50 to close at $2,615.00 per ounce.

Coffee hit a fresh one-year high as production threats in Brazil and Vietnam casted doubt about the outlook of the soft-crop for the new year. Inadequate humidity in top growers lowered production output to affect global supply in the week under review. Coffee thus gained 5 cents to trade at $1.24 per pound.