Weekly Highlights

• Inflation eased to 10.1 percent in October 2020.
• Yields on short-dated treasury securities moderated further.
• Government raised $388.90 million 3-Year Dollar denominated bond at a yield of 4.75 percent.
• Accra Bourse trimmed the year-to-date losses of its indices.
• Ghana cedi posted mixed performance against the three major trading currencies.
• Global equity market ended in the gains as risk sentiment improved.
• Brent crude oil gained but Gold tumbled due to high optimism surrounding the newly developed COVID-19 vaccine.

Macroeconomic Update
Inflation eased to 10.1 percent in October 2020
Consumer Price Inflation for the month of October 2020 settled at 10.1 percent, the lowest rate in seven months. The 0.3 percentage point moderation comes on the back of reduced inflationary pressures at the Non-food sub-sector of the economy which subdued upward threats from the Food sub-sector.

Inflation at the Non-Food sub-sector dropped by 150 basis points from 9.80 percent in September 2020 to 8.30 percent in October 2020 on account of the significant moderation in the month-on-month inflationary rates for the Health, Restaurants & Accommodation, and Information- Communication sub-sectors. Inflation which stood at 1.7 percent (Health), 1.2 percent (Restaurants & Accommodation) and 0.9 percent (Information Communication) in September 2020, trimmed to 0.0 percent, 0.6 percent, and 0.1 percent respectively in October 2020. Inflation at the Food and Non-alcoholic beverages sub-sector, however, upticked by 140 basis points from 11.20 percent to 12.60 percent, spurred by price increments for Vegetables and Fruits & Nuts in the period under review.

Imported inflation for the period under review stood at 5.1 percent, unchanged from the September 2020 readings. However, inflation on local goods eased marginally from 12.3 percent in September to 12.2 percent in October. On regional basis, Greater Accra recorded the highest rate of 15.2 percent, outstripping its September 2020 reading of 14.3 percent. Inflation at the remaining nine traditional regions were all below the national average of 10.1 percent with the Upper West Region recording the lowest rate of 1.6 percent. Presented below is the trend analysis of CPI.

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 10.10
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 9.60
Monetary Policy Rate (%) 20.0 17.0 16.00 n/a 14.50
GDP Growth (y-o-y %) 8.5 6.3 6.5 6.8 -3.2Q2
Budget Deficit (% of GDP 5.9 3.8 4.5Sep 7.2 7.9
Public Debt (% of GDP) 69.8 57.6 63.00 n/a 68.3
Fx. Reserves (M. Cover) 4.3 3.7 4.1 ?3.5 4.0
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
Nov 16 – 20 14.00 14.11 16.97 18.50 19.00 19.85
Nov 09 – 12 14.06 14.13 16.97 18.50 19.00 19.85
Nov 02 – 05 14.06 14.10 16.97 18.50 19.00 19.85
2020 Yr. 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 close of week’s auction, the yield on the 91-Day T-Bill eased by 6 basis points to settle at 14.00 percent. That on the 182-Day T-Bill also moderated by 2 basis points to 14.11 percent. The yield on the 364-Day T-Bill was, however, unchanged at 16.97 percent.

Results of Auction held on 13th November, 2020

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 1,034.69 1,034.69 14.0054
182-Day T-Bill 98.53 98.53 14.1083
7-Year Bond 1,027.43 1,027.43 20.5000
3-Year FXR Bond 388.90 388.90 4.7500

Government accepted all the GHS1,133.22 million bids tendered at the week’s auction. This was more than Government’s target of GHS783.00 million with the 91-Day T-Bill, dominating Government’s purchases by 91.31 percent. Government also raised an amount of GHS1,027.43 million from the issuance of the 7-Year Bond at a yield of 20.50 percent, bringing total bids raised in the week under review to GHS2,160.65 million. The week’s trade also witnessed the issuance of a 3-Year dollar denominated bond of which Government accepted all the $388.90 million bids tendered at a yield of 4.75 percent. At the upcoming auction, an amount of GHS985.00 million worth of bids are expected to be raised by Government.

Illustrated above is the term structure of the Government of Ghana treasury securities. As largely anticipated, the yield curve sustained its normality due to long standing commitment by the Bank of Ghana in making investment with longer maturities comparatively attractive than their short-dated counterparts,s despite the rise in Government’s appetite for funds. The normality of the curve is also attributed to the flight to safety among investors arising from multi factors including the COVID-19 fears and election uncertainties.

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 -19.29
GSE-FSI -19.93 49.51 -6.79 -6.23 -19.63

The Accra Bourse trimmed the year-to-date losses of its indices following the positive close of the market in the week’s trade. This comes on the back of improve demand for shares in some financial and consumable stocks. The GSE Composite Index thus posted a week-on-week gain of 0.44 percent to settle at 1,821.72 points, corresponding to a reduced year-to-date loss of 19.29 percent. The GSE Financial Stocks Index, similarly, recorded a weekly gain of 0.91 percent as it settled at 1623.20 points, reflecting a year-to-date loss of 19.63 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 8.88 61.30 590.33
Total Value Traded (GHS M) 29.88 40.97 37.12
Market Cap (GHS M) 52,869.61 53,118.12 0.47

Market activities significantly improved over the previous week’s outturn with a total of 61.30 million shares valued at GHS40.97 exchanging hands. This represents over five-hundred percent increment over the previous week’s trade of 8.8 million valued at GHS29.88 million. MTN Ghana Ltd dominated the week’s trade with 91.61 percent share of the overall traded volume. Market capitalization also upped by 0.47 percent to end the week at GHS53,118.12 million.

Stock Price Movements

In all, five (5) equities altered their week opening prices. Ecobank Ghana Ltd led the bulls run with 4 pesewas gains to trade at GHS5.00 per share. Fan Milk Ltd and Ecobank Transnational Incorporated advanced with 2 pesewas and a pesewa to trade at GHS1.07 and 0.08 per share, respectively.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
ETI 0.08 0.07 0.08 0.01 14.29
FML 4.12 1.05 1.07 0.02 1.90
EGH 8.09 4.96 5.00 0.04 0.81

On the laggard’s list, Benso Oil Palm Plantation Ltd went down by 10 pesewas to trade at GHS2.00 per share. SIC Ltd followed suit with a pesewa decline to close at 8 pesewas per share.

Stock Price Losers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
BOPP 2.86 2.10 2.00 -0.10 -4.76
SIC 0.08 0.10 0.08 -0.02 -20.00

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7088 5.7146 CAD 4.3470 4.3506
GBP 7.5111 7.5209 CFA 97.0825 97.1918
EUR 6.7491 6.7567 JPY 0.0545 0.0545
AUD 4.1356 4.1455 ZAR 0.3663 0.3667
NGN 66.6527 66.8277 CNY 0.8624 0.8632
Source: Bank of Ghana 13.11.2020

The Ghana cedi depreciated against both the US dollar and the British pound but advanced against the Euro after the week’s trading on the interbank currency market. The US dollar closed higher on the international currency market, lifted by positive sentiment about newly developed COVID-19 vaccine and upbeat economic data from the US economy. Jobless claims in the US dwindled in the week ended 7th November 2020 to 709,000 from a previous week’s figure of 757,000 and against a target of 735,000. Consumer price inflation in the US moderated to an annual rate of 1.2 percent in October from a previous month’s rate of 1.4 percent, signalling stability in price levels in the economy. The US dollar thus, posted a week-on-week appreciation of 0.02 percent as it traded at GHS5.71 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 3.22 percent.

The British pound rose to a two-month high on the international currency market as the decision by Dominic Cummings to leave the UK Brexit team was welcomed by investors. Dominic Cummings who is a top adviser to Boris Johnson and a mastermind of the referendum campaign of the Brexit announced to vacate his position and this is tipped to lessen the hard-line approach regarding talks with Brussels. The pound’s rise was further supported by the growing enthusiasm that the newly developed COVID-19 vaccine could be beneficial for the UK economy due to the surging numbers in infection cases. The Pound thus appreciated by 0.44 percent to trade at GHS7.52 on the interbank currency market. The year-to-date depreciation of the cedi thus increased to 2.67 percent.

The euro tumbled on weak growth prospects and ill-sentiment surrounding the recent monetary policy decision of the European Central Bank. The failure to lift interest rate as anticipated and dovish sentiment about the outlook of inflation within the bloc, as it is projected to remain in the negative until early 2021, affected the single currency. Furthermore, dwindling economic sentiment in eurozone’s largest economy – Germany, falling more than expected to 39.0 points in November 2020 from 56.1 points in September 2020 also dimmed the appeal of the currency. The Euro thus depreciated by 0.24 percent as its selling price trimmed to GHS6.76 on the interbank currency market. The year-to-date depreciation of the cedi thus reduced to 8.05 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,509.44 3,585.15 2.16 75.71
DJIA 28,323.40 29,479.81 4.08 1156.41
FTSE 100 5,910.02 6,316.39 6.88 406.37
NIKKEI 225 24,325.23 25,385.87 4.36 1060.64
FTSE/JSEAllShare 56,387.04 57,182.60 1.41 795.56
NSE All Share 31,016.17 35,037.46 12.97 4021.29
Nairobi All Share 141.32 143.93 1.85 2.61

US stocks market finished the trading week in the gains as investors increased their risk appetite after Pfizer Inc. and BioNTech announced that their COVID-19 vaccine was more than 90% effective in preventing the disease. The S&P 500 Index thus rose by 2.16 percent to settle at 3,585.15 points. The Dow Jones Industrial Average also recorded a weekly rise of 4.08 percent to settle at 29,479.81 points.

The London Stocks Exchange posted an impressive gain, the biggest weekly rise since April 2020, as news of a coronavirus vaccine triggered high investor bet for a faster economic recovery. The FTSE 100 thus upped by 6.88 percent to settle at 6,316.39 points.

The Asian Stock Market climbed further after the week’s trade as the news on the global vaccine development, amidst improved earnings report by some automobiles in the Asian economy buoyed the demand for stocks. The Nikkei 225 thus ended with a weekly gain of 4.36 percent to settle at 25,385.87 points.

On the African equity market, the Johannesburg All Shares Index registered a week-on-week gain of 1.41 percent to settle at 57,182.60 points. The Nigerian All Share Index also recorded 12.97 percent weekly gain to settled at 35,037.46 points. The Nairobi All Share Index, similarly, rose by 1.85 percent to close at 143.93 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 39.45 42.78 8.44 -35.18
Gold $/ounce 1,951.70 1,886.20 -3.36 23.84
Cocoa$/metric tonne 2,333.00 2,365.00 1.37 -6.89
Coffee $/pound 1.0695 1.0925 2.15 -15.77
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil finished the trading week on a positive note despite trimming its selling price last Friday on account of rising COVID-19 cases across the globe. The positive closure of the energy commodity is attributed to the high enthusiasm that characterised the global market in the early parts of the trading week after data showed an experimental COVID-19 vaccine being developed by Pfizer Inc and Germany's BioNTech was 90% effective. Brent crude oil thus added $3.33 to trade at $42.78 per barrel.

Gold trimmed its value on the international commodities market, as it came under pressure prior to Friday’s trade. The positive sentiment that surrounded the announcement of the effectiveness of the newly developed vaccine sparked risk taking sentiment to affect the value of the yellow metal. The extent of the metal loss was however, trimmed on Friday after data suggesting that global infection cases were rising sharply. Gold thus shed $65.50 to trade at $1,886.20 per ounce.

Cocoa edged higher as market reacted to the possibility of countries imposing much stricter restrictions to address the second wave of the COVID-19 pandemic. Cocoa thus saw improved demand as buyers bought much of the beans in anticipation of reduced supply on the global market. Cocoa thus gained $32.00 to trade at $2,365.00 per metric tonne.

Coffee gained rising to its highest in 3-and-half weeks on the international commodities market over concerns in top growers – Brazil. Inadequate rainfall conditions coupled with above-average temperature readings in Minas Gerais – Brazil and reports of storms in Vietnam sparked concerns about the soft crop. Coffee thus added 2 cents to trade at $1.09 per pound.

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