Weekly Highlights

• Government to raise GHS21.43 billion in Q2
• Yield on 91-Day T-Bill surged but that on the 182-Day T-Bill eased.
• GSE accelerated its bullish run with 6 advancers.
• Ghana cedi posted mixed performance against the major trading currencies.
• London Stock Exchange closed positively, spurred by bullish 1st quarter earnings.
• Cocoa tumbled despite projections of improved chocolate consumption in 2021.

Macroeconomic update

Government needs GHS21.43 billion in Q2 from the domestic market

The Government of Ghana seeks to raise a total of GHS21.43 billion through the issuance of varied treasury securities, ranging from 91-Days to 7-Years from the domestic market in the 2nd quarter of 2021. This is in line with the Net Domestic Financing, Government’s liability management programme and the objective of the Government to lengthen the maturity profile of the public debt. A total of GHS8.42 billion was targeted for the month of April. The target for May is at GHS7.08 billion and GHS5.93 billion for June 2021.

The issuance of the 91-Day T-Bill dominates, constituting about 52.73 percent (GHS11.30 billion) of the targeted value. An amount of GHS5.56 million is also expected to be raised from the issuance of the 182-Day T-Bill and GHS1.57 billion from the sale of 364-Day T-Bills. The value of Bonds for the quarter is projected at GHS3.00 billion, with two-third coming from the sale of the 5-Year Bond. There will be no fresh issuance of Government Notes for the quarter under review.

Key Ghana Economic Data

Indicator 2018 2019 2020 2021 2021
Target Actual
Inflation CPI (y-o-y %) 9.40 7.90 10.40 8.00 10.30
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 13.00
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 14.50
GDP Growth (y-o-y %) 6.3 6.5 0.4 5.00 n/a
Budget Deficit (% of GDP 3.8 4.5Sep 11.7 9.50 n/a
Public Debt (% of GDP) 57.6 63.00 68.3 n/a n/a
Fx. Reserves (M. Cover) 3.7 4.1 4.1 4.00 n/a
Source: BOG; MOFEP; GSS. * represents provisional estimate ** data yet to be released by MoF

Government of Ghana Treasury Securities
Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
May 03 – 07 12.84 13.53 16.53 17.60 17.70 18.30
Apr 26 – 30 12.78 13.57 16.53 17.60 17.70 18.30
Apr 19 – 23 12.79 13.53 16.44 17.60 17.70 18.30
2021 Yr. Open 14.09 14.12 17.00 18.50 19.25 19.85
NB: The above are the annual yields on Government of Ghana Treasury Securities.

The yield on the 91-Day T-Bill rose by 6 basis points to 12.84 percent, at the recently held auction. Interest rate on the 182-Day T-Bill however, moderated by 4 basis points to 13.53 percent. The yield on the 364-Day T-Bill was unchanged at 16.53 percent. Yields on the Government of Ghana Notes and Bonds remained unchanged as they were not part of the week’s issuance.

Results of Auction held on 30th April, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 416.67 416.67 12.8367
182-Day T-Bill 156.55 156.55 13.5299

Government accepted all the GHS573.22 million bids tendered by investors. This fell below the week’s target of GHS673.00 million with the 91-Day T-Bill dominating by 72.69 percent. Target for the upcoming auction is pegged at GHS1,142.00 million through the sale of the 91-Day and 182-Day T-Bills.

Following the release of the issuance calendar for the 2nd quarter of 2020, both ends of the yield curve is anticipated to moderate. The moderation of the 5-Year and 7-Year Bonds should be moderate to keep the general uptrend nature of the yield curve. A yield relatively higher than the 3-Year Note, is expected to largely contribute to the success of lengthening the maturity profile of the public debt. This will serve as an incentive for the attraction of investors into committing funds that can aid the long-term developmental plans of the Government.

Ghana Stock Exchange

Ghana Stock Exchange (GSE) Indices (YTD %)
Year 2017 2018 2019 2020 2021
GSE-CI 52.73 -0.29 -12.25 -13.98 31.93
GSE-FSI 49.51 -6.79 -6.23 -11.73 5.29

The Ghana Stock Exchange ended bullish, as series of upbeat earnings report buoyed risk taking sentiment on the Bourse. Ecobank Ghana Ltd grew its profit after tax by about 33.63 percent, from a previous value of GHS128.04 million to GHS171.10 million. Access Bank Ltd also saw its profit-after-tax rising from GHS68.18 million to GHS74.94 million which resulted in a surge in earnings per share from 39 pesewas to 43 pesewas. With similar upbeat performances, the GSE Benchmark jumped by 9.28 percent to settle at 2,561.45 points, corresponding to a year-to-date return of 31.93 percent. The GSE Financial Stocks Index, also rose by 0.70 percent to close the week at 1,840.99 points, reflecting a year-to-date gain of 5.29 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 3.64 4.15 13.86
Total Value Traded (GHS M) 3.13 10.22 226.75
Market Cap (GHS M) 58,525.05 60,801.73 3.89

Market activities improved over the previous week’s outturn. A total of 4.15 million shares valued at GHS10.22 million exchanged hands, as compared to the 3.64 million shares valued at GHS3.13 million. Unilever Ghana Ltd and MTN Ghana Ltd were the most actively traded stock as they jointly accounted for 88.30 percent share of the overall traded volume. Market capitalization also improved by 3.98 percent to GHS60,801.73 million at the closure of the week.

Stock Price Movements

In all, a total of seven (7) equities altered their share prices, with six (6) advancers and a laggard. GCB Bank Ltd occupied the top of the advancers’ list with a price gain of 25 pesewas to settle at GHS4.75 per share. MTN Ghana Ltd keenly followed with 18 pesewas appreciation to trade at GHS1.14 per share. Fan Milk Ltd and Total Petroleum Ltd followed with price appreciations of 7 pesewas and 5 pesewas to trade at GHS1.22 and GHS3.25 per share, respectively. Enterprise Group Ltd and Societe Generale Ghana Ltd also appeared on the advancers’ list with a pesewa gain each to trade at GHS1.49 and 18 pesewas per share, respectively.

Stock Price Movers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
GCB 4.05 4.50 4.75 0.25 17.28
MTNGH 0.64 0.96 1.14 0.18 78.13
FML 1.08 1.15 1.22 0.07 12.96
TOTAL 2.83 3.20 3.25 0.05 14.84
EGL 1.40 1.48 1.49 0.01 6.43
SOGEGH 0.64 0.80 0.81 0.01 26.56

On the downside, Unilever Ghana Ltd had its share price falling further by 39 pesewas to settle at GHS3.60 per share.

Stock Price Movers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
UNIL 8.29 3.99 3.60 -0.39 -56.57

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7293 5.7351 CAD 4.6551 4.6596
GBP 7.9179 7.9264 CFA 95.0773 95.1711
EUR 6.8924 6.8992 JPY 0.0524 0.0525
AUD 4.4166 4.4222 ZAR 0.3956 0.3960
NGN 71.5467 71.5676 CNY 0.8855 0.8861
Source: Bank of Ghana 30.04.2021

On the interbank currency market, the Ghana cedi depreciated against the US dollar but advanced against the British pound and the Euro. The US dollar dimmed its shine on the international currency as it dropped to its lowest in nine-weeks on account of the dovish policy stance of the US Federal Reserve. The decision by the Fed to keep all stimulus support on hold until inflation and other growth factors align to the Bank’s target sparked the selloffs of the greenback. Despite the US dollar’s outturn on the international currency market, it appreciated marginally by 0.02 percent against the cedi at a selling price of GHS5.74. The year-to-date appreciation of the cedi thus trimmed to 0.49 percent.

The British pound finished the week’s trade on a positive note on the international forex market, following growing evidence of economic recovery in the UK. Improved retail sales data for March from 2.5 percent to 5.4 percent in March, the 0.7 percent rise in inflation readings in March and other bullish readings from the production sectors of the economy, coupled with dwindling unemployment rate, are factors underpinning the economic recovery in the UK. But on the interbank currency market, the British posted a week-on-week depreciation of 0.18 percent as demand for the currency relatively dipped in the week’s trade to sell at GHS7.93. The year-to-date depreciation of the cedi thus reduced to 0.60 percent.

The Euro stepped up its gains on the international currency market on the back of growing economic recovery prospects in the Eurozone. Eurozone economic sentiment came in more-than-expected as it rose to 110.3 points in April. This outpaced the 100.9 points readings for March and target of 102.2 points. Other upbeat developments were Germany’s consumer price inflation for April which rose by 2.1 percent in April up from the 2.0 percent readings in March 2021, and the significant deployment of coronavirus vaccines to restore normal economic lives in the bloc. In spite of this, the Euro traded lower at GHS6.90 against the local currency, representing a week-on-week depreciation of 0.30 percent. The year-to-date appreciation of the cedi thus rose to 2.44 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,180.17 4,181.17 0.02 11.32
DJIA 34,043.49 33,879.00 -0.48 10.69
FTSE 100 6,938.56 6,969.81 0.45 7.88
NIKKEI 225 29,020.63 28,812.63 -0.72 4.99
FTSE/JSEAllShare 67,295.74 66,936.99 -0.53 12.67
NSE All Share 39,301.82 39,840.28 1.37 -1.07
Nairobi All Share 165.61 168.04 1.47 10.47

Wallstreet closed the week’s trading on a mixed note following mixed quarterly earnings report released by major oil producers – ExxonMobil and Chevron. Exxon Mobil Corporation had its first quarter earnings beating estimated by analyst on Wallstreet estimate and that of Chevron fell below the estimated target. These results contributed to the mixed closure of the market indices. The S&P 500 thus finished with 0.02 percent higher at 4,181.17 points. The Dow Jones Industrial Average, however, dipped by 0.48 percent to settle at 33,879.00 points.

The London Stock Exchange recorded its best session in five weeks on the back of upbeat earnings from Smith & Nephew, Unilever, Royal Dutch Shell, and Standard Chartered Bank. The FTSE 100 thus posted a week-on-week gain of 0.45 percent to settle at 6,969.81 points.

The Nikkei 225 closed in the red on account of heavy selloff recorded within the Paper & Pulp, Railway & Bus and Real Estate sectors during the week’s trade. The Nikkei 225 thus dropped by 0.72 percent after the week’s trade as it settled at 28,812.63 points.

On the African equity market, the Nigerian All Share Index upped further 1.37 percent to settle at 39,840.28 points. The Nairobi All Share Index also sustained the uptrend with 1.47 percent rise to settle at 168.04 points. The Johannesburg All Share Index, however, posted a weekly decline of 0.53 percent as it settled at 66,936.99 points.
Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 66.11 66.66 0.83% 28.69%
Gold $/ounce 1,777.00 1,768.60 -0.47% -6.68%
Cocoa$/metric tonne 2,410.00 2,382.50 -1.14% -8.47%
Coffee $/pound 1.3685 1.4155 3.43% 10.37%
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil gained following investors anticipation of bright demand outlook. The demand side of the energy commodity improved on account of consumption raise for the rest of 2021 as major economies fully reopens for business activities. Brent crude oil thus gained 55 pesewas to trade at $66.66 per barrel.

Gold ended in the red as downbeat economic data from China affected the demand of the yellow metal. Investors grew worried about the slow pace of growth in the Asian region – especially China following low readings of its key sectors of the economy. The PMI for the Manufacturing sector missed a target of 51.7 points to 51.1 points. That for the non-manufacturing sector performed lower in April to 54.9 points from a previous rate of 56.3 points with similar readings from the Services sector to affect investors’ anticipation of economic recovery from the second largest economy. Gold thus shed $8.40 to close at $1,768.60 per ounce.

Coffee posted gains despite a stable production outlook projection by the Colombian Federation of Coffee Growers, which affected the price of the soft crop in the early part of the week’s trade. The positive closure of the beans was on the back of speculative trading activities. Coffee thus gained 5 cents to trade at $1.42 per pound.

Cocoa went down despite hawkish expectation of chocolate demand by top producers. Hershey, and Barry Callebaut offered bullish expectation of chocolate consumption for the rest of 2021 on the back of the global economic recovery from the COVID-19 pandemic. Gains were however, truncated on account of uncontrollable supply of the beans from Ivory Coast. Cocoa thus shed $27.50 to trade at $2,382.50 per metric tonne.

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