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.

Interest rates on Government of Ghana treasury securities were adjusted mixed at the week’s auction. The yield on the 91-Day T-Bill moderated by 4 basis points to settle at 14.02 percent. That on the 182-Day and 364-Day T-Bills however inched up by 2 basis points and 18 basis points as they settled at 14.07 percent and 16.88 percent, respectively. The 3-year bond, which was issued to both domestic and foreign investors to finance government project and maturing bills, had its yields trimmed by 50 basis points to 18.85 percent.   Yields on other Government of Ghana’s Treasury Notes and Bonds were, however, unchanged.

A total of GHS575.77 million bids were tendered by investors with all bids accepted by the Government. This fell below the GHS1,124.00 million target set for the week’s trading. Government also raised a total of GHS751.33 million bids from the issuance of the 3-Yr Bond bringing total bids accepted to GHS1,327.10 million. The 3-Yr Bond dominated Government’s purchase as it constituted 56.61 percent of the overall bids raised at the week’s trading. At the upcoming auction, the Government anticipates raising a total of GHS875.00 million from the issuance of the 91-Day and 182-Day T-Bills.   

As largely anticipated, the term structure of Government of Ghana treasury securities sustained its normality. The commitment by the central bank in ensuring that yields on long-dated treasury securities are relatively attractive over their short-dated ones coupled with the safe-haven nature of the money market amidst continued investor confidence in the domestic economy are factors accounting for the normality of the yield curve. It is also anticipated that irrespective of the Government’s demand for funds to service maturing bills and finance its developmental projects, yields on treasury securities will maintain their downtrend.  

Ghana Stock Exchange

Trading ended on a mixed note in the week under review with the benchmark Composite Index heading further southwards on account of significant selling pressure by the telecommunication giant – MTN Ghana and some consumable stocks. The GSE Composite Index thus recorded a weekly decline of 353 basis points to settle at 1,941.03 points, corresponding to a year-to-date loss of 14.01 percent. The GSE Financial Stocks Index on the other hand, surged by 12 basis points in the week’s trading despite ill-sentiment surrounding the dividend suspension which affected the index in other previous week’s trading. The index stood at 1,843.10 points, corresponding to a year-to-date loss of 8.74 percent.

Market outturns improved significantly with a total of 35.40 million shares valued at GHS21.11 million exchanging hands. This represents over 100 percent increment compared to the previous week’s trade of 1.20 million worth GHS3.24 million. MTN Ghana Ltd led the activity chart with 98.75 percent share of the overall traded volume. Market capitalization, however, dropped by 1.36 percent to GHS53,542.60 million at end of the week’s trade.

Stock Price Movements

At the pairing of week’s opening and closing prices, seven equities altered their share prices. Ecobank Ghana Ltd emerged as the sole price advancer; it upped by 4 pesewas to trade at GHS7.49 per share.

On the flip side, NewGold led the pack of six losers; it dipped by GHS3.20 to close at 90.90 per share. Benso Oil Palm Plantation and MTN Ghana Ltd also eased by 15 pesewas and 6 pesewas to trade at GHS2.50 and 55 pesewas per share, respectively. Fan Milk Ltd and Ghana Oil Company Ltd slipped by a pesewa each to settle at GHS3.38 and GHS1.58 per share, respectively. Total Petroleum Ghana Ltd also inched down by a pesewa to trade at GHS2.49 per share.

Currency Market

Source: Bank of Ghana 29.05.2020

On the interbank currency market, the Ghana cedi depreciated against all the three major trading currencies. The US dollar advanced on the international currency market as the heightened US-China trade tension rather increased the demand for the safe-haven currency despite disappointing consumer data. US Consumer spending for April declined by 13.6 percent; worser than the 6.9 percent dip recorded in March. The Dollar thus rode on this development as it posted a weekly gain of 0.09 to sell at GHS5.62 per share. The year-to-date depreciation of the cedi thus increased to 1.54 percent.

The British Pound eased to a two-month low on account of post Brexit worries and speculations of a negative interest rate policy by the Bank of England. Lingering uncertainty over Britain's trading relationship with the EU-Post Brexit cast a dim outlook on the economy as both parties took an entrenched position. The Pound was further knocked down by the growing speculations that the Bank of England intends to adopt a negative interest rates to mitigate the adverse effect of the COVID-19 on UK’s economy. Despite this, the Pound upped its selling price to GHS6.92 as the cedi posted a week-on-week depreciation of 1.13 percent. The year-to-date appreciation of cedi thus narrowed to 5.74 percent.

The Euro appreciated on the international currency market on improved investors’ confidence on a recovery of the bloc. The European Union’s unveiling of a 750-billion-euro recovery-comprising 500 billion euros in grants and 250 billion euros in loans to support member states affected by the COVID-19 pandemic buoyed market sentiment in the trading week. The Euro thus traded at GHS6.24 on the interbank currency market, representing a week-on-week gain of 2.02 percent. The year-to-date depreciation of the cedi thus increased to 0.48 percent.

International Markets

US stocks capped a strong week gain despite heightened trade uncertainties prior to Trump’s response to recent restrictions imposed by China. Last Friday, US President – Donald Trump among the measures adopted to punish China included suspension of entry of certain Chinese nationals to American universities and withdrawal from the WHO. The decision to refrained from undermine the phase one agreement reached between the two countries significantly contributed to the positive closure of the bourse. The S&P 500 thus posted a week-on-week gain of 3.01 percent as it settled at 3,044.31 points. The Dow Jones Industrial Average also recorded a weekly rise of 3.75 percent to close at an index level of 25,383.11 points.

The London Stock Exchange closed bullish as the announcement by the European Central Bank to raise $821.6 billion from capital markets and the leaving the phase one agreement unchanged sparked high demand for stocks on the bourse. The FTSE 100 thus posted a weekly rise of 1.39 percent as it settled at 6,076.60 points.

The Nikkei 225 headed southwards after the week’s trade following data suggesting recovery in the Asian economy as China posted expansion in its manufacturing activities. The PMI for China’s Manufacturing PMI rose to 50.6 points above the 50-level benchmark to stimulate market sentiment. The Nikkei 225 thus ended with a weekly gain of 7.31 percent to settle at 21,77.89 points.

Mixed outturns were recorded on the African equity market, the Johannesburg All Share Index sustained its upward drive with a week-on-week gain of 0.67 percent to settle at 50,483.00 points.  The Nigerian All Share Index also climbed further by 0.25 percent to 25,267.82 points. The Nairobi All Share Index, however, registered a weekly loss of 2.31 percent to settle at 137.13 points.

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

Brent crude oil posted a marginal weekly gain despite a rekindled trade dispute between the US and China which affected market activities. The upsurge of the energy commodity was driven by the uptick in global demand which resulted in a significant rise in the exportation of crude oil worldwide. Brent crude oil thus added 20 cents to trade at $35.33 per barrel.

Gold ended the trading week in the gain following a strong rebound last Thursday and Friday associated with the heightened trade tension and downbeat unemployment data from the US. Gold thus upticked by $16.20 to trade at $1,751.70 per ounce.

Cocoa surged on the international commodities market as the unfavourable climatic conditions inhibiting production in top grower – Ivory Coast contributed to the upward review of its pricing. Ivory Coast recorded lower volumes of rainfall than required to support cocoa production as the current rainfall of 23.8 millimetres (mm) fell significantly below the 5-year average of 43.3 millimetres (mm). Cocoa thus gained $60.00 to trade at $2,430.50 per metric tonne.

Coffee dropped to its lowest in three-and-half months on account of bumper harvest in Brazil and the weakening of the Brazilian real against major international currencies. Coffee traded below the $1.00 benchmark after losing 7 pesewas to sell at 96.30 cents per pound.

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