Weekly Highlights

• Yield on 2-Year Note still unchanged at 18.50 percent.
• Government raised a total of 1.92 billion from the primary market last Friday.
• Accra Bourse deepened its year-to-date losses of its indices.
• Ghana cedi lost grounds to all the three major trading currencies.
• Global equity market posted gains.
• Brent crude oil, Gold, Cocoa and Coffee upticked on the global commodities market.

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 9.60
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 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
Oct 26 – 30 14.06 14.12 17.00 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.

Interest rate on the Government of Ghana treasury securities witnessed mixed adjustments at the week’s auction. The yield on the 91-Day T-Bill remained at 14.06 percent but that on the 182-Day T-Bill surged by 3 basis points to 14.13 percent. The 364Day T-Bill and the yield on the 2-Year Note were also unchanged at 16.97 percent and 18.50 percent, respectively. Yields on the other treasury instruments were unchanged as they were not part of the week’s issuances.

Results of Auction held on 6th November, 2020

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 745.05 745.05 14.0642
182-Day T-Bill 142.78 142.78 14.1303
364-Day T-Bill 268.09 268.09 16.9714
2-Year Note 768.08 768.08 18.5000

Government accepted all the GHS1.16 billion worth of bids tendered at the week’s auction. This exceeded the week’s target of GHS1.04 billion and the GHS838.06 million raised at the previous week’s auction. Government also raised a total of GHS768.08 million from the issuance of a 2-Year Note at unchanged yield of 18.50 percent, bringing total bids raised at the week’s auction to GHS1.92 billion. Among the bids accepted by Government, the 2-Year Note dominated with 39.92 percent share. A total of GHS783.00 million is expected to be raised at the next auction scheduled on 13th November 2020.

The yield curve kept is normality as rate adjustment on Government treasury securities were marginal. The rising demand for funds by Government, to finance its developmental project as well as service maturing debt instruments, did not significantly alter the yields on treasury securities as risk aversion sentiment continue to persist, keeping the capital market in a steady state. We foresee interest rates rising marginally by end of year, as Government demand for funds is expected to rise.

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 -19.64
GSE-FSI -19.93 49.51 -6.79 -6.23 -20.35

Trading on the Ghana Stocks Exchange saw the market indices deepening their year-to-date losses following price declines in some blue-chip stocks namely, MTN Ghana Ltd and Ecobank Ghana Ltd. At the closing bell, the GSE Composite Index recorded a week-on-week decline of 1.28 percent to settle at 1,813.79 points, widening its year-to-date loss to 19.64 percent. The GSE Financial Stocks Index, similarly, posted a week-on-week decline of 20.35 percent as it settled at an index level of 1,608.59 points, corresponding to year-to-date loss of 20.35 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 6.52 8.88 36.11
Total Value Traded (GHS M) 5.47 29.88 446.45
Market Cap (GHS M) 53,115.38 52,869.61 -0.46

Market outturn improved significantly following the huge sell-off recorded in some blue-chip stocks. A total of 8.88 million shares valued at GHS29.88 million exchanged hands in the week’s trade as compared to the 6.52 million worth GHS5.47 million recorded a week ago. Ecobank Ghana Ltd led the activity chart with 46.59 percent share of the overall traded shares. Market capitalization, however, trimmed by 0.46 percent on account of the significant sell-off to settle at GHS52,869.61 million.

Stock Price Movements

At the pairing of the week’s opening and closing prices, three (3) equities altered their week opening prices. New Gold Ltd was the lone advancer, it added GHS1.40 to trade at GHS109.90 per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
GLD 54.00 108.50 109.90 1.40 1.29

On the flip side, Ecobank Ghana Ltd posted the worst decline, losing 74 pesewas to trade at GHS4.96 per share. Société Générale Ghana Ltd also shed a pesewa to settle at 64 pesewas 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 5.70 4.96 -0.74 -12.98
SOGEGH 0.72 0.65 0.64 -0.01 -1.54

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7078 5.7136 CAD 4.3682 4.3723
GBP 7.4784 7.4870 CFA 96.8560 96.9576
EUR 6.7654 6.7725 JPY 0.0551 0.0552
AUD 4.1356 4.1411 ZAR 0.3624 0.3627
NGN 66.8044 67.0671 CNY 0.8628 0.8629
Source: Bank of Ghana 6.11.2020

The interbank currency market ended with the Ghana cedi losing grounds against all the three major trading currencies. The US dollar was on the defensive against major rivals, as US’ general elections clouded the market with uncertainties, sending the greenback to its lowest in two months. The expectation for a victory for the Democrat leader – Joe Biden but with a Republican control over the Senate-sparked debate about how the Democrats could pass the larger fiscal spending package they have been pushing, sending the dollar low. Despite the dollar’s weakness, it ended with a week-on-week appreciation of 0.01 percent to trade at GHS5.71 last Friday on the interbank currency market. The year-to-date depreciation of the cedi thus rose marginally to 3.10 percent.

The British Pound surged on the international forex market following a fresh splurge of bond buying by the Bank of England, and demand drift from the greenback to other currencies such as the pound sterling due to US elections. The Bank of England increased its bond buying stimulus programme by an additional GBP150 billion, exceeding a market expectation of 100 billion pounds to address economic slowdown resulting from the COVID-19 pandemic. The decision to keep its interest rate unchanged and the anticipation of inflation returning to the 2 percent target by 2021 by the Bank also buoyed the value of the pound sterling. The Pound thus registered a week-on-week appreciation of 1.23 percent as its selling price moved to GHS7.49 on the interbank currency market. The year-to-date depreciation of the cedi thus moved to 2.23 percent.

The Euro gained grounds in the week’s trade as investors looked beyond the ongoing uncertainties surrounding the US election to focus on the potential friendly policies growth with the US in the event the Democrats Party wins. This development subdued recent ill-sentiment as the European Central Bank failed to adjust its interest rate as largely anticipated prior to its release last Friday. The Euro thus advanced by 1.48 percent to trade at GHS6.77 on the interbank currency market. The year-to-date depreciation of the cedi thus increased to 8.26 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,269.96 3,509.44 7.32 8.63
DJIA 26,501.60 28,323.40 6.87 -0.75
FTSE 100 5,577.27 5,910.02 5.97 -21.64
NIKKEI 225 22,977.13 24,325.23 5.87 2.83
FTSE/JSEAllShare 51,684.70 56,387.04 9.10 -1.22
NSE All Share 30,733.47 31,016.17 0.92 15.55
Nairobi All Share 140.04 141.32 0.91 -15.08

Stocks in the US closed in the gains spurred by upbeat economic data as the labour market saw expansion. The US economy created 638,000 non-farm jobs in October, exceeding the 600,000-target, buoying investor sentiment to demand more stocks in the trading week. The Dow Jones Industrial Average thus recorded a weekly gain of 6.87 percent to settle at 28,323.40 points. The S&P 500 also recorded a week-on-week gain of 7.32 to close at 3,509.44 points.

The London Stocks Exchange closed in the gains lifted by positive sentiment surrounding the just ended US election. The growing signs for victory for Joe Biden was speculated to ease tariff war between the US and other advanced economies including the UK. The positive outturn was further supported by the decision of the Bank of England to increase its bond buying stimulus programme by additional GBP150 billion to mitigate the economy from COVID-19 pandemic. The FTSE 100 thus gained 5.97 percent to settle at 5,910.02 points.

The Japanese Stocks Exchange accelerated to its highest in 29 years, riding on outcome of the US general elections, where the defeat of Trump was speculated to be an end to tariff war with China and the Asian countries. The index rise was further supported by a recovery in sales by two Japanese automobiles; Toyota Motors and Honda as they doubled their profit forecast due to rebound in economic activities in China. The Nikkei 225 thus upped by 5.87 percent to settle at 24,325.23 points.

On the African equity market, the Johannesburg All Shares Index thus gained 9.10 percent to settle at 56,38.04 points. The Nigerian All Share Index also posted a weekly gain of 0.92 percent as it settled at 31,016.17 points. The Nairobi All Share Index, similarly, ended with a week-on-week rise of 0.91 percent to close at 141.32 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 37.46 39.45 5.31 -40.23
Gold $/ounce 1,879.90 1,951.70 3.82 28.14
Cocoa$/metric tonne 2,293.00 2,333.00 1.74 -8.15
Coffee $/pound 1.044 1.0695 2.44 -17.54
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil upped its value on the international currency market as the market reacted to speculation that OPEC and its allies are likely to hold back on the production rise decision. The initial plan to lift the daily production limit by 2 million in January 2021 is rumoured to be delayed following the recent coronavirus restrictions imposed in some economies. The Brent crude oil thus added $1.99 to trade at $39.45 per barrel.

Gold posted gains on the international commodities market benefiting from the general weakness in the US dollar, falling treasury yields and prospect of more Fed easing interest rate in the US. Gold thus increased its selling price by $71.80 to trade at $1,951.70 per ounce.

Cocoa moved higher on the global commodities market as civil unrest in top grower – Ivory Coast affected the supply of the soft crop into the international market. Data on cocoa deliveries at Ivory Coast’s ports of Abidjan and San Pedro halved to 29,000 metric tone in the week under review from the previous week’s supply. Cocoa thus gained $40.00 to trade at $2,333.00 per metric tonne.

Coffee posted a week-on-week gain on the commodities market driven by a resurgence in the Brazilian real which buoyed demand. Gains in the soft crop was further supported by the International Coffee Organisation’s (ICO) decision to trim its 2019/20 global surplus estimate from 1.538 million bags to 1.244 million bags on account of production threats in Central American countries due to the Hurricane Eta. Coffee thus added 3 cents to trade at $1.07 per pound.

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