Weekly Highlights

• Inflation dropped to 10.4 percent in September
• Yield on 5-Year Bond now at 19.85 percent, upped by 60 basis point.
• Interest rate on 91-Day and 182-Day T-Bill dropped, but 364-Day T-Bill surged.
• Accra Bourse failed to sustain its recovery.
• Ghana cedi stepped up its recovery against the British pound.
• Gold, Cocoa and Coffee tumbled after the week’s trade.

Macroeconomic Update
Inflation dropped to 10.4 percent in September
Ghana’s consumer price inflation for the month of September witnessed a decline of 10 basis points to 10.4 percent, from a previous rate of 14.50 percent. The reduced inflationary pressures across the two main segment of the CPI accounted for the moderation recorded in the month-under- review. Food and Non-Alcoholic sub-sector saw a rate moderation of 20 basis points from 11.4 percent in August to 11.2 percent in September. This was largely accounted by Vegetables, tubers, plantains & bananas; and Fruit and vegetable juice components, within the sub-sector, as they recorded month-on-month inflations of negative 3.91 percent and negative 0.34 percent, respectively.

The Non-food inflation sub-sector also recorded an inflation rate of 9.8 percent in September 2020 from the 9.9 percent recorded in August 2020. Housing, water, electricity, gas & other fuels; Education services; and Recreation, sport & culture were some sub-components spearheading the moderation within the Non-food sub-sector.

At the regional levels, the Upper West Region recorded the lowest inflation in the month of September of 1.3 percent. Five other regions recorded inflation below the national average of 10.4 percent. This comprised– Volta, Central, Northern, Upper East and the Brong Ahafo Regions. The Greater Accra Region had the highest rate of 14.3 percent in the month under review. Presented below is the 1-year trend analysis of the 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 10.40
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 9.00
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
Oct 19 – 23 14.04 14.09 17.00 18.50 19.00 19.85
Oct 12 – 16 14.05 14.11 16.98 18.50 19.00 19.25
Oct 05 – 09 14.05 14.14 16.98 18.50 19.00 19.25
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.

The yield on the 91-Day T-Bill eased by a basis points to 14.04 percent last Friday. That on the 182-Day T-Bill also fell by 2 basis points to settle at 14.09 percent but the yield on the 364-Day T-Bill surged by 2 basis points to settle at 17.00 percent. Interest rate on the 5-Year Government of Ghana Bond also rose by 60 basis points to 19.85 percent.

Results of Auction held on 16th October, 2020

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 619.54 619.54 14.0383
182-Day T-Bill 55.63 55.63 14.0851
364-Day T-Bill 144.45 118.73 16.9974
5-YR Note 616.30 616.30 19.8500

A total of GHS819.62 million worth of bids were tendered by investors, out of which the Government accepted GHS793.90 million. This was more than the week’s target of GHS733.00 million but below the GHS919.34 million raised at the previous auction. Government also raised a total of GHS616.30 million from the issuance of the 5-Year Bond, bringing total amount raised to GHS1.41 billion. An amount of GHS1,027.00 million is expected to be raised at the upcoming auction from the sale of the 91-Day, and 182-Day T-Bills next Friday.

As largely expected, the yield curve sustained its normality following the general robustness of the domestic economic amidst the spill over effects of the COVID-19 pandemic on economic activities. Rising investors appetite for safe-haven assets, and the slowness in recovery in other investment markets are other contributing factors for the normality of the curve.

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 -18.21
GSE-FSI -19.93 49.51 -6.79 -6.23 -17.45

The Accra Bourse failed to sustain its recovery as investors reacted differently to developments on the bourse. The 5.46 percent acquisition of shares in Fan Milk Ghana by FML Fan Milk International; a GHS0.0138 per share dividend payment for shareholders of Guinness Ghana Breweries Ltd; PZ Cussons’ delisting from the bourse after a successful tender offers; and Unilever Ghana Ltd.’s change of name to Unilever Ghana PLC were some developments on the bourse influencing risk taking, hence, resulting in mixed outturns in the market indices. The GSE Composite Index thus ended with a week-on-week loss of 0.98 percent as it settled at an index level of 1,846.11 points. The year-to-date return of the index thus stood at negative 18.21 percent. The GSE Financial Stocks Index, however, ended with a week-on-week gain of 1.95 percent to settle at 1,667.29 points with a year-to-date loss of 17.45 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 11.46 10.69 -6.71
Total Value Traded (GHS M) 8.06 8.09 0.38
Market Cap (GHS M) 53,297.46 53,271.69 -0.05

A total of 10.69 million shares valued at GHS8.09 million exchanged hands in the week under review. This represents 6.71 percent decline from the previous trade in terms of volume. MTN Ghana Ltd led the activity chart with 86.59 percent share of the overall traded volume. Market capitalization also dwindled after the week’s trade from GHS53,297.46 million to GHS… million.

Stock Price Movements

A total of 5 equities altered their week opening prices with 4 advancers and 1 laggard. On the bull’s list, New Gold Ltd was the most gainer, it added GHS17.60 to trade at GHS108.50 per share. Standard Chartered Bank Ltd and Société Générale Ghana Ltd surged by 10 pesewas and 6 pesewas to trade at 70 pesewas and 7 pesewas per share, respectively. Ecobank Transnational Incorporated Ltd also gained a pesewa to trade at 7 pesewas per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
GLD 54.00 90.90 108.50 17.60 19.36
SCB 18.40 15.00 15.10 0.10 0.67
SOGEGH 0.72 0.64 0.70 0.06 9.38
ETI 0.08 0.06 0.07 0.01 16.67

Ecobank Ghana Ltd, however, was the lone laggard trimming GHS1.00 to close at GHS6.00 per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
EGH 8.09 7.00 6.00 -1.00 -14.29

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7027 5.7085 CAD 4.3211 4.3256
GBP 7.3697 7.3782 CFA 98.0709 98.1663
EUR 6.6821 6.6886 JPY 0.0541 0.0541
AUD 4.0386 4.0440 ZAR 0.3446 0.3450
NGN 66.5136 66.7765 CNY 0.8512 0.8520
Source: Bank of Ghana 16.10.2020

The Ghana Cedi appreciated against against the British Pound but lost to the US Dollar and the Euro. The US Dollar rose to a month-high as diminishing hopes for a new stimulus package ahead of the upcoming election and a sudden spike in covid-19 cases in the US, buoyed the greenback. The US dollar thus appreciated by 0.05 percent to trade at GHS5.71 on the interbank forex market. The year-to-date depreciation of the cedi thus widened to 3.01 percent.

The British Pound recorded another round of week-on-week depreciation on Brexit uncertainties and the likelihood for a reintroduction of restrictions as new infections rises. Investor’s uncertainties heightened as the proposed October 15. deadline for Brexit negotiations elapsed with outstanding issues on fisheries, fair competition, and dispute resolution unresolved. The pound thus posted a week-on-week depreciation of 0.05 percent as it reduced its selling price on the interbank forex market to GHS7.38 The year-to-date depreciation of the cedi thus eased to 0.78 percent.

The Euro tumbled on downbeat economic data from the eurozone. Germany’s ZEW index, a major gauge of investor’s economic sentiment, dipped to 56.1 points in October from 77.4 points in September and Industrial production for October came in lower-than expected at 0.7 percent below the forecasted rise of 0.8 percent. Despite this, the euro recorded a weekly gain of GHS6.69 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 7.11 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,477.13 3,483.81 0.19 7.83
DJIA 28,586.90 28,606.31 0.07 0.24
FTSE 100 6,016.65 5,919.58 -1.61 -21.52
NIKKEI 225 23,619.69 23,410.63 -0.89 -1.04
FTSE/JSEAllShare 55,182.99 55,047.26 -0.25 -3.57
NSE All Share 28,415.31 28,659.45 0.86 6.77
Nairobi All Share 140.07 139.65 -0.30 -16.08

US equity indices ended the trading week in the gains as bullish consumer retail sales data calmed uncertainties surrounding the delay in the implementation of a fresh round of stimulus packaged by US House of Senate, and the growing worries about the trajectory of the deadly disease. Stocks within the Utilities, Healthcare and Industrials sectors thus posted the most gains on the Bourse. The S&P 500 thus recorded 0.19 percent weekly gain as it closed at 3,483.81 points. The Dow Jones Industrial Average also upped by 0.07 percent to settle at 28,606.31 points.

The London Stock Exchange closed in the red on account of heightened uncertainties surrounding the Brexit, following UK’s Government’ inability to obtain a favourable deal before the 15th October deadline. The FTSE 100 recorded a week-on-week decline of 1.61 percent to close at an index level of 5,919.58 points.

The Japanese Stocks Exchange tumbled after the week’s trading session on account of heavy selloffs in stocks within the Paper & Pulp, Railway & Bus and Real Estate sectors. The Nikkei 225 thus went down by 0.85 percent to close at an index level of 55,0477.26 points.

On the African equity market, the Nigerian All Share Index rose by 0.86 percent to finish the week’s trade at 28,659.45 points. The Johannesburg All Share Index, however, shed 0.25 percent to close at 55,047.26 points. The Nairobi All Share Index, similarly, dropped by 0.30 percent to close at 139.65 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 42.85 42.93 0.19 -34.95
Gold $/ounce 1,926.20 1,906.40 -1.03 25.17
Cocoa$/metric tonne 2,432.00 2,361.00 -2.92 -7.05
Coffee $/pound 1.1155 1.0725 -3.85 -17.31
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil marginally surged after the week’s trade despite closing most trading sessions in the red on speculation that OPEC intended to ease the supply cut measures despite imbalances in the market. Plans to ease supply cut from the current 7.7 million barrels by about 2 million barrels per day from January 2020 sparked, rumors of an imminent supply glut in the global market. Brent crude oil thus dropped by 18 cents to trade at $42.67 per barrel.

Gold ended the trading week in the red, coming under pressure as the dollar attracted buying from investors looking for perceived havens amid rising global cases of COVID-19. Gold thus fell by $12.15 to trade at $1,914.05 per ounce.

Cocoa went down as the resurfaced COVID-19 pandemic in some advanced economies trimmed demand amidst the growing concerns of supply glut in Ivory Coast attributed to favourable climatic conditions. Cocoa thus fell by $96.50 to trade at $2,335.50 to per metric tonne.

Coffee fell on concern that the new lockdown measures imposed in some of Europe's biggest cities will curb consumption and demand of coffee. . Coffee thus eased by 2 cents to trade at $1.10 per pound.

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