Weekly Highlights

• Ghana’s headline inflation edged up to 9.70 percent in August 2021.
• Yields on the back end of the GoG Treasury securities recorded mixed outturn.
• The Ghana Stock Exchange firmed up its bullish performance.
• The Ghana cedi recorded positive weekly gains against its major trading peers.
• The International equity market recorded loses at the close of trades.
• Gold shed value as investors increase bet on the US dollar.

Macroeconomic Update
Consumer Price Inflation inched up to 9.70 percent for August 2021.

Consumer Price Inflation (CPI) for August 2021 rose to 9.7 percent (year-on-year), the highest since March 2021, up from the 9.0 percent recorded for the month of July 2021, with the month-on-month inflation between July and August 2021 settling at 0.3 percent. The uptick in the headline inflation is due to higher records in the Food and Non-Alcoholic beverages, Housing & Utilities and Transport sub-sectors of the economy. Food inflation inched up to 10.9 percent against July’s figure of 9.5 percent and an average over the last 12 months, pointing to 10.4 percent. Non-food Inflation also lifted marginally by a basis point from the 8.6 percent recorded for July 2021. At the regional level, the Northern Regions and Eastern Region recorded the highest and least CPI of 14.6 percent and 3.0 percent, respectively. The rate of inflation for August 2021 is the relative change in CPI over the 12-month period, from August 2020 to August 2021. Inflation is reported year-on-year (annual inflation) and month-on-month (monthly inflation) and granulated to determine regional and commodity type and source of inflation. Illustrated below is the trend of the CPI between August 2020 and August 2021.

Key Ghana Economic Data

Indicator 2018 2019 2020 2021 2021
Target Actual
Inflation CPI (y-o-y %) 9.40 7.90 10.40 8± 2 9.70
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 8.40
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 13.50
GDP Growth (y-o-y %) 6.3 6.5 0.4 5.00 3.10
Budget Deficit (% of GDP) 3.8 4.5Sep 11.7 9.50 5.1
Public Debt (% of GDP) 57.6 63.00 68.3 n/a 77.1
Fx. Reserves (M. Cover) 3.7 4.1 4.1 4.00 5.0
Source: BOG; MOFEP; GSS.

Government of Ghana Treasury Securities

Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Sep 13–Sep 17 12.45 13.21 16.10 17.25 17.70 18.80
Sep 06–Sep 10 12.45 13.20 16.10 17.25 17.70 18.80
Aug 30–Sep 03 12.46 13.22 16.11 17.25 17.70 18.80
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.

Yields on the GoG Treasury securities at the back end of the curve registered missed outturn at last Friday’s auction. The 91-Day bill yield remained unchanged, while the 182-Day bill rose by a basis point to close at 12.45 percent and 13.21 percent, respectively. The 364-Day bill, the treasury note and bonds, however, remained unchanged, as they were not scheduled for sale at the week’s auctions

Results of Auction held on 10th September, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 551.76 551.76 12.4509
182-Day T-Bill 707.13 707.13 13.2120
6 Yr. FXR Bond 1,244.07 1,244.07 18.8000

Government accepted all the GHS 2,502.96million bids tendered by investors for the 91-Day, 182-Day, including the newly issued 6-Year Fixed Rate Bond. The 6-Year Bond took the lion share of government’s purchases and closed at a coupon rate of 18.80 percent, representing 45 basis points decline from the previous issuance in January of this year. For the upcoming auction, government plans to raise a total of GHS 1,474.00 million through the sale the 91-Day, 182-Day, and 364-Day bills.

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 44.23
GSE-FSI 49.51 -6.79 -6.23 -11.73 9.90

Trading on the stock exchange was robust compared to the week before, as profit taking activities weighed positively on the benchmark indices. The GSE Composite Index added nearly 47 points to close the week at a price of 2,800.36, extending investors’ year-to-date gains to 44.23 percent, and making the Accra bourse the second best in Africa, according to the latest 2021 rankings. The GSE Financial Stock Index inched up by 29.40 to settle at 1,959.18, with a year-to-date gain to 9.90 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 3.43 4.43 1.70
Total Value Traded (GHS M) 3.39 5.84 1.52
Market Cap (GHS M) 62,940.06 63,430.44 0.78

A total of 4.43 million shares valued at GHS 5.84 million changed hands in trading across seventeen equities. Scancom PLC (MNTGH) came back as the week’s most traded stock recording more than 97 percent of total volumes traded. The market capitalization appreciated in value to close the week at GH 63,430.44 million.

Stock Price Movements

At the closing bell, a total of nine (9) equities, all advancers witnessed price movements as no laggards were recorded. Ecobank Ghana PLC (EGH) led the bulls, adding 46 pesewas to open this week’s trade at GHS 7.80 per share to bring shareholders year-to-date gain to 8.33 percent. TOTAL followed with 42 pesewas appreciation to end the week at a share price GHS 4.62 per share, lifting investors’ year-to-date returns to 63.25 percent.

Stock Price Advancers in terms of WK closing price
Equity Yr. Open Wk. Open Wk. End Wk. Change YTD (%)
EGH 7.20 7.34 7.80 0.46 8.33
TOTAL 2.83 4.20 4.62 0.42 63.25
FML 1.08 1.65 1.76 0.11 62.96
BOPP 2.00 2.51 2.60 0.09 30.00
EGL 1.40 2.06 2.10 0.04 50.00
SCB PREF 0.87 0.87 0.90 0.03 3.45
GOIL 1.50 1.57 1.60 0.03 6.67
MTNGH 0.64 1.24 1.26 0.02 96.88
SOGEGH 0.64 0.95 0.97 0.02 51.56

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.8532 5.8590 CAD 4.6316 4.6363
GBP 8.1049 8.1136 CFA 94.6479 94.7408
EUR 6.9237 6.9305 JPY 0.0533 0.0533
AUD 4.3126 4.3180 ZAR 0.4136 0.4138
NGN 70.1832 70.2686 CNY 0.9090 0.9094
Source: Bank of Ghana 03.09.2021

The Ghana cedi posted positive weekly performance on the interbank currency market as it remained stable against the US dollar and appreciated versus the British pound and the Euro.

The US dollar rose on Friday, lifted by higher U.S. Treasury yields as investors focused on when the central bank is likely to ease its asset purchases. The greenback bounced back from a one-month low last Friday, after jobs data for August showed that the labour market growth eased, while wage inflation rose more than the market’s expectation. Rising inflation pressures, with jobs growth below their desired levels, have recently left Fed officials in a tussle. Data released on Friday showed that U.S. producer prices up ticked in August, indicating that high inflation is likely to persist for a while, amid supply chains remaining tight as the covid-19 pandemic lingers. On the local front, the US dollar remained stable throughout the week as it traded flat against the local currency at a selling price of GHS 5.86 on the interbank forex market. The year-to-date depreciation of the cedi remained unchanged at 1.64 percent.

The British pound dipped marginally on the international forex market, after economic data showed Britain's economy grew by just 0.1 percent in July, the least month-on-month rise since January when the country went into a new national lockdown, as the spread of the Delta variant of COVID-19 hit the service sector. Meanwhile, the British Central Bank’s governor, Andrew Bailey said the bank would probably be forced to raise interest rates to combat inflationary pressures over the next two to three years, even as Britain’s economic recovery from the covid-19 pandemic is slowing. The Pound sterling thus recorded 0.15 percent weekly depreciation to the cedi as it traded at a selling price of GHS 8.11. The year-to-date depreciation of the cedi moderated to 2.90 percent.

The euro traded lower in a week of volatilities, buoyed by the European Central Bank (ECB) deciding to move to “a moderately lower pace” in its €1.85 trillion pandemic emergency purchase program from the €80 billion a month level it has run at since March, amid a stronger near-term outlook for prices and growth. The ECB’s President, Christine Lagarde said the unanimously agreed shift to a slower pace of purchases was not tapering, trying to reassure bond investors but failed to provide particulars about the exact end of the emergency support. The common currency lost grounds to the cedi by 0.48 percent week-on-week, as it traded at GHS6.93 on the interbank currency market, bringing the year-to-date appreciation of the cedi to 1.98 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,535.43 4,458.58 -1.69 18.70
DJIA 35,369.35 34,607.72 -2.15 13.07
FTSE 100 7,138.35 7,029.20 -1.53 8.80
NIKKEI 225 29,128.11 30,381.84 4.30 10.70
FTSE/JSEAllShare 66,371.85 64,296.06 -3.13 8.23
NSE All Share 39,261.01 38,921.78 -0.86 -3.35
Nairobi All Share 179.47 180.14 0.37 18.43
Source: www.bloomberg.com, www.investing.com & www.tradingeconomics.com

US stocks struggled to hold gains on Friday. Threat to inflation took the shine off expectations of an ease in U.S.-China tensions, following a call between President Biden and President Xi, amid surging Covid-19 cases. Data released earlier on Friday showed U.S. producer prices went up 0.7 percent in August 2021 above the market’s projection of 0.6 percent, the highest annual gain in almost 11 years, as the effect of the global pandemic continues to pressure supply chains. On the bright side, President Biden outlined a broad plan to boost COVID-19 vaccination rates in the US, pressuring private and federal employers to immunize their workforce. Both the S&P 500 and the Dow Jones Industrial Average trimmed their values to close the week at price levels of 4,458.58 and 34,607.72, respectively.

The London bourse closed lower at the closing bell, recording the highest weekly decline since mid-August 2021 after the latest data showed UK’s economy grew by just 0.1% in July, the least monthly increase since January when the country was forced into fresh restrictions at the hike of spread of the Delta variant of COVID-19. The passing of new tax rate hike to fund health and social care, pointing to a 1.25 percent increase in UK’s National Insurance tax for both employers and employees and a 1.25 percent uptick to dividend tax, sent the market south. The FTSE 100, thus, recorded a weekly decline of 1.53 percent to close the week at a price of 7,029.20.

The Japanese bourse jumped to a six-month high on Friday after an impressive week of gains, underpinned by hopes that the new Prime Minister will roll-out a massive economic stimulus program after the incumbent leader, Yoshihide Suga announced his decision not to seek re-election last week, over his handling of the coronavirus pandemic. Japan is currently battling its largest wave of the virus since the pandemic began. The NIKKEI 225, thus, added 1,253.73 points to close the week at a price of 30,381.84.

On the African market recorded mixed outturns at the close of trading, The Johannesburg All Share and Nigerian All Share ended bearish to close the week at 64,296.06 and 38,921.78 levels, respectively. The Nairobi All Share index on the other hand rose slightly in price to settle at 180.14 bringing shareholders year-to-date returns to 18.43 percent.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 72.61 72.92 0.43 40.77
Gold $/ounce 1,833.70 1,792.10 -2.27 -5.44
Cocoa$/metric tonne 2,674.00 2,643.00 -1.16 1.54
Coffee $/pound 1.9055 1.8560 -2.60 44.72
Source:www.bloomberg.com, www.investing.com & www.tradingeconomics.com

Crude oil prices recovered after a week of mixed outturns, as investors digest China's decision to tap, for the first time, from its giant oil reserves to ease the pressure of rising input cost. A statement by China's Strategic Reserves Administration came after factory-gate inflation in the country climbed to a 13-year high, and just a month after the White House asked the OPEC+ to pump more oil amid rising gasoline prices in America as hurricane Ida's fallout continued to cripple US oil production, leaving producers struggling to restart offshore platforms. On the international commodity market, brent crude rose marginally by 31 cents to settle at $72.92 per barrel, at the close of trading on Friday.

Gold suffered series of losses, registering its first weekly loss since early August underpinned by a strengthening US dollar and uncertainties over the timeline for the Fed tapering. Latest data showed US producer inflation rose by 0.7 percent from the month of August, above market expectations of 0.6 percent. Meanwhile, news that India's gold imports in August nearly doubled from a year earlier to the highest in five months on strong demand as jewelers build inventories for the upcoming festive season, gave some shine to the yellow metal. On weekly basis, gold shaved $41.60 off its value to settle at $1,792.10 per ounce, at the close of trade on Friday.

Cocoa marginally trimmed in value on the international commodity market despite expectations that supplies in the October-September 2021/22 season will shrink by at least 12.5%, amid late and heavy rains. The cash crop lost $31.00 to close the week at $2,643.00 per metric tonne.

Coffee prices dipped on the international commodity market despite production shortfall in the world’s largest producer, Brazil. The price of Arabica coffee lost 2.60 percentage points off its value week-on-week to close trade at $1.860 per pound.

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