Weekly Highlights

• Yields on the 364-Day settled at 17.71 percent; down by 10 basis points.
• MTN Ghana Ltd posts sterling profits; declares dividend
• Global equity  markets hit by coronavirus fears, GSE tumbles
• The Ghana cedi halted its upward rally against the US Dollar. 
• Brent crude oil sank lower ahead of OPEC’s meeting.

Key Ghana Economic Data
Indicator	2017	2018	2019	2020	2020
				Target	Actual
Inflation CPI (y-o-y %)	11.8	9.40	7.90	8.00	7.8
Inflation PPI (y-o-y %)	8.9	4.40	13.00	n/a	13.3
Monetary Policy Rate (%)	20.00	17.00	16.00	n/a	16
GDP Growth (y-o-y %)	8.5	6.3	5.7	6.8
Budget Deficit (% of GDP	5.9	3.8	4.5Sept	4.7
Public Debt (% of GDP)	69.8	57.6	60.55Sept	n/a
Fx. Reserves (M. Cover)	4.3	3.7	4.1	≤3.5

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

Government of Ghana Treasury Securities

Treasury Bills, Notes & Bonds (%)
Date	91-Day	182-day	364-day	2-Yr	3-Yr	5-Yr
Mar 02 – 06	14.73	15.17	17.71	20.20	20.75	19.50
Feb 24 – 28	14.75	15.17	17.81	20.20	20.75	19.50
Feb 17 – 21	14.70	15.18	17.81	20.20	20.75	19.50
2020Yr.Open	14.70	15.15	17.90	20.95	19.70	19.50

NB: The above are the annual yields on Government of Ghana Treasury Securities.

 

At the closing bell, the yield on the 91-Day T-Bill eased by 2 basis points to settle at 14.73 percent. Interest rates on the 364-Day T-Bill also dipped by 10 basis point to close at 17.71 percent. Yield on the 182-Day T-Bill however, remained unchanged at 15.17 percent. The yield on the Government of Ghana treasury notes and bonds also remained unchanged as they were not scheduled for the week’s auction. 

 

Results of Auction held on 28th   February, 2020
Bill	Bids Tendered GHS (Million)	Bids Accepted GHS (Million)	Interest Rate (%)
91-Day T-Bill	388.93	388.93	14.7324
182-Day T-Bill	91.32	91.32	15.1717
364-Day T-Bill	129.15	129.15	17.7108

 

A total of GH609.40 million worth of bids were tendered by investors at the week’s auction on the primary market with Government accepting all bids. This was below the GHS800.00 million targets expected to be raised in the week under review. Out of the total bids raised by Government, the 91-Day T-Bill dominated, constituting 63.82 percent share. An amount of GHS 1,037.00 million is expected to be raised by the Government from the sale of the 91-Day,182-Day and 364-Day T-Bills. 

 

 

Illustrated in the diagram above is the yield curve of the Government of Ghana treasury securities. Despite the interest rate adjustment recorded at the week’s auction, the yield curve sustained its normality as yields on long-dated treasury instruments continued to be generally attractive than their short-dated counterparts. Yields on treasury securities are expected to improve amid Government’s decision to raise capital from the primary market to finance its developmental project this year.

MTN Ghana Ltd posts sterling profits; declares dividend

MTN Ghana Ltd posted an impressive 2019 full year earnings results with profit-before-tax rising by 33.74 percent to  GHS 1.44 billion from GHS 1.08 billion in 2018. Revenue in 2019 also grew by 22.83 percent to  GHS5.18 billion spurred by a surge in  voice, data and digital revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 65.7 percent (YOY) with the EBITDA margin rising following lower operating expenses, and innovative revenue generation strategies. The Profit-after tax also jumped by 33.56 percent to GHS 1 billion in 2019 from GHS 755 million in 2018 YOY. Following the upbeat earnings, the telecommunication giants  declared a  final dividend of  4 pesewas per share  bringing the total dividends for 2019 to 6 pesewas.

MTN Ghana Ltd
GHS (M)	2018 GHS	2019 GHS	Change (%)
Revenue	4219	5182	22.83
EBITDA	1588	2630	65.69
Profit before tax	1079	1443	33.74
Profit after Tax	755	1007	33.56

 

MTN Ghana Ltd cemented its place as the leading Telecommunication service provider with 55.21 percent of market share as at 2019 (FY) and recorded an upturn in subscriber growth with subscribers climbing from 20.10 million in 2018 to 22.60 million in 2019, representing a 12.30 percent increment. Based on strong profit-after-tax posted and robust control systems in place, we foresee future declaration of dividends in subsequent years. A  short and long term BUY recommendation is suggested for investors seeking dividend  and growth of income over the long term.

Ghana Stock Exchange

Ghana Stock Exchange (GSE) Indices (YTD %)
Year	2016	2017	2018	2019	2020
GSE-CI	-15.33	52.73	-0.29	-12.25	-2.01
GSE-FSI	-19.93	49.51	-6.79	-6.23	-2.73

The equity market closed bearish  in the week under review as losses in some financial and energy stocks dragged the market indices lower. Risk taking activities on the bourse waned ahead of dividend declaration by listed companies despite government’s commencement of paying investors locked-up funds in the defunct financial institutions. We however expect trading activities to pick up in the coming weeks as government’s payment will offer investors with the needed funds to buy into high dividend paying stocks trading below their book values. At the end of the week’s trading activities, the GSE-Composite Index dipped by 0.34 percent to settle at 2,211.89 points representing a year-to-date loss of 2.01 percent. The GSE-Financial Stocks Index also posted a week-on-week decline of 2.47 percent as it settled at 1,964.56 points, corresponding to a year-to-date loss of 2.73 percent.

GSE Market Indicators
	Wk. Open	Wk. End	Change (%)
Total Volume Traded (M)	18..85	3.26	-82.71
Total Value Traded (GHS M)	13.00	1.82	-86.00
Market Capitalisation (GHS M)	56,631.51	56,529.36	-0.18

Market activities weakened  in the week under review. A total turnover  of  3.26 million shares valued at GHS 1.82 million exchanged hands representing 82.71 percent decline over last week’s  overall traded volume. Aluworks Ltd was the most actively traded stock as it accounted for 36.27 percent of the overall traded volume. Market capitalization dropped further by 0.18 percent to settle at GHS 56,529.36 million.

Stock Price Movements

A total of eleven equities altered their week opening share prices; comprising a gainer and ten laggards. MTN Ghana Ltd was the sole price advancer with 3 pesewas gains to trade at 70 pesewas per share.

	Stock Price Advancers in terms of WK closing prices
Equity	Yr. Open	Wk. Open	Wk. End	Wk. Change (GHS)	YTD (%)
MTNGH	0.70	0.67	0.70	0.03	0.00

Ecobank Ghana Ltd occupied the bottom of the laggards list with 50 pesewas loss to settle at GHS7.30 per share. Standard Chartered Bank Ghana Ltd and CAL Bank Ltd trimmed 7 pesewas and 5 pesewas of their respective opening price to close at GHS19.02 per share and 90 pesewas per share respectively. Ghana Oil Company Ltd and Fan Milk Ltd also followed suit with 2 pesewas loss each to trade at GHS1.75 per share GHS4.07 per share respectively. Unilever Ghana Ltd also dipped by 2 pesewas to end the day at GHS13.98 per share. Ecobank Transnational Incorporated, Benso Oil Palm Plantation, GCB Bank Ltd and Tullow Oil Plc also witnessed price downticks.

	Stock Price Losers in terms of WK closing prices
Equity	Yr. Open	Wk. Open	Wk. End	Wk. Change (GHS)	YTD (%)
EGH	8.09	7.80	7.30	-0.50	-9.77
SCB	18.40	19.09	19.02	-0.07	3.37
CAL	0.89	0.95	0.90	-0.05	1.12
GOIL	1.70	1.77	1.75	-0.02	2.94
FML	4.12	4.09	4.07	-0.02	-1.21
UNIL	16.40	14.00	13.98	-0.02	-14.76
ETI	0.08	0.09	0.08	-0.01	0.00
BOPP	2.86	2.86	2.85	-0.01	-0.35
GCB	5.10	4.85	4.84	-0.01	-5.10
TLW	11.94	11.94	11.93	-0.01	-0.08

Currency Market

Currency	Buying	Selling	Currency	Buying	Selling
USD	5.2923	5.2975	CAD	3.9341	3.9381
GBP	6.7836	6.7925	CFA	112.9578	113.0493
EUR	5.8024	5.8071	JPY	0.0489	0.0490
AUD	3.4413	3.4479	ZAR	0.3384	0.3388
NGN	57.7820	57.9709	CNY	0.7587	0.7594

Source: Bank of Ghana 28.02.2020

On the interbank forex market, the Ghana cedi appreciated against the British but tumbled versus the US Dollar and the Euro. The US dollar edged higher on investor’s flight to safety as they scaled back their preference for risky assets in favour of the safe haven currency on account of rising cases of the coronavirus. The greenback was also boosted by comments by Richard Clarida- Fed Vice Chair, suggesting a cautious stance to monetary policy to tackle the impact of the coronavirus on the economy while allaying fears of an imminent rate cut by the US Fed.  The US Dollar thus appreciated by 0.23 percent in the trading week against the Ghana Cedi to sell at GHS5.30 on the interbank currency market. The year-to-date appreciation of the cedi thus reduced to 4.51 percent.

The British Pound slipped to a three-week low against its major peers. This was as a result of uncertainties about UK and European Union reaching a Post Brexit trade deal, after the former adopted a hard-line stance on its proposal for a binding access to the European Union’s financial market. The Pound was also weighed by doubts over an imminent loosening fiscal policy by  finance minister- Rishi Sunak’ that seeks to raise public spending to spur economic growth. The British pound succumbed under this development as it recorded a week-on-week loss of 0.97 percent to sell at GHS6.80 on the interbank currency market. The year-to-date appreciation of the cedi thus rose to 7.77 percent.

The Euro rose to a year-high on account of the release of a string of upbeat economic readings which fuelled hopes of an economic recovery in the bloc. Eurozone’s economic sentiment indicator jumped from the 102.6 points recorded in January to 103.5 points in February, beating the projected decline of 101.5 points. Consumer Price Index in eurozone’s largest economy- Germany also recoded a yearly rise of 1.7 percent in February, above the forecasted 1.6 percent, as the month-on-month CPI rose to 0.4 percent from -0.6 percent in January. The Euro thus benefitted from these developments as it surged by 1.17 percent (week-on-week) to exchange at GHS5.81 on the interbank currency market. The year-to-date appreciation of the Cedi thus declined to 6.99 percent.

International Markets

Stock Indices
	Wk. Open	Wk. Close	Change (%)	YTD (%)
S&P 500 Index	3,337.75	2,954.22	-11.49	-8.56
DJIA	28,992.41	25,409.36	-12.36	-10.96
FTSE 100	7,355.50	6,528.50	-11.24	-13.44
NIKKEI 225	23,386.74	21,142.96	-9.59	-10.63
FTSE/JSEAllShare	57,336.21	51,038.18	-10.98	-10.59
NSE All Share	27,388.62	26,216.46	-4.28	-2.33
Nairobi All Share	158.38	148.6	-6.18	-10.70

The US equity market posted its worst weekly run since the global crisis of 2008 as news of the spread of the coronavirus dimmed investors’ risk taking appetite .Investors feared the impact of the pandemic on global revenue and profits of companies with South Korea recording more than 2300 cases, Italy-600 which sparked massive sell-off  of equities. The S&P 500 thus eased by 11.49 percent to settle at 2,954.22 points. The Dow Jones Industry Average also eased by 12.36 percent to settle at an index level of 25,409.36 points.

The London Stock Exchange plummeted in the week under review on coronavirus fears as the number of confirmed cases in the UK rose to 19. Stocks within the consumer and airline sectors were the worst hit, with British Airways recording a 9.5 per cent drop in share price as traders feared the likelihood of an economic slowdown due to the coronavirus. The FTSE 100 thus dipped by 11.24 percent to settle at 6,528.50 points last Friday.

The Asian stock market sank lower following the decision by South Korea’s central Bank to keep its policy rates steady amid coronavirus fears. The Bank of Korea kept its base rate unchanged at 1.25 percent contrary to the expected reduction in rate to mitigate the impact of the coronavirus. The Nikkei 225 thus closed with a week-on-week loss of 9.59 percent to settle at 21,142.96 points.

On the African market, the Johannesburg All Share Index slipped by 10.98 percent to end the week’s trading at 51,038.18 points. The Nigerian All Share Index shed 4.28 percent to close at 26,216.46 points.  The Nairobi All Share Index also posted a weekly loss of 6.18 percent as it settled at 148.6 points last Friday.

Commodities
	Wk. Open	Wk. Close	Change (%)	YTD (%)
Crude Oil $/barrel	58.5	50.52	-13.64	-23.45
Gold $/ounce	1,644.60	1,566.70	-4.74	2.86
Cocoa$/metrictonne	2,922.00	2,679.00	-8.32	5.47
Coffee $/pound	1.0885	1.11	1.98	-14.42

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

Brent crude oil hit a 4-year low on the international commodities market as news of the fast spread of the coronavirus weighed on global demand for the commodity. Investors thus braced for steeper supply cuts ahead of Organization of the Petroleum Exporting Countries (OPEC) and its allies’ meeting on March 5^th-6^th to mitigate the impact of the pandemic on the commodity.  Brent crude oil thus ended with a week-on-week loss of $.7.98 percent to settle at $ 50.52 per barrel.

Gold retreated from a seven-year high following profit taking activities by investors. A slump in global equity markets following the rising cases of the coronavirus and falling US Treasury bond yields failed to spark demand for the safe haven commodity as traders sold-off the yellow metal to realize their profits. Gold thus eased by 4.74 percent to settle at $ 1,566.70 per ounce.

Cocoa closed in the red as concerns of dry weather conditions in Ghana, the world’s second largest producer adversely affected supply of the beans. This muted the impact of government’s initiative to embark on a rehabilitation of diseased cocoa farms in the Western North and Eastern regions to treat Cocoa Swollen Shoot Virus Disease (CSSVD) endemic farms. Cocoa thus slipped by 8.32 percent to trade at $ 2,679.00 per metric tonne.

Coffee rebounded on the international commodities market as production shortage in major growing regions in Vietnam coupled with sluggish trading activities in Indonesia lifted the value of the commodity. Coffee thus added 2 cents to close at $1.11 per pound.

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