Weekly Highlights

• Yields on 91-Day and 182-Day T-Bills rose further.
• 3-Year Bond upped by 25 basis points, now at 19.25 percent.
• Accra Bourse ended bearish with 3 laggards.
• Cedi depreciated against all the three major trading currencies.
• Global equity market sustained recovery as Vaccine effectives buoyed risk sentiment.
• Brent crude oil, Cocoa and Coffee gained but Gold went down.

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 10.10
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 8.40
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 30 – 04 14.07 14.14 16.97 18.50 19.25 19.85
Nov 23 – 27 14.06 14.13 16.97 18.50 19.00 19.85
Nov 16 – 20 14.00 14.11 16.97 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.

At the close of the last Friday’s auction, the yield on the 91-Day T-Bill upped by a basis point to 14.07 percent. The yield on the 182-Day T-Bill also inched up by a basis point to 14.14 percent. That on the 364-Day T-Bill, however, was unchanged at 16.97 percent.

Results of Auction held on 27th November, 2020

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 622.89 622.89 14.07
182-Day T-Bill 96.22 96.22 14.14
364-Day T-Bill 196.20 196.20 16.97
3-Year Bond 650.16 650.16 19.25

Government accepted all the GHS915.31 million worth of bids tendered at the week’s auction. This fell below the week’s target of GHS984.00 million but higher than the GHS773.71 million bids raised at the previous week’s auction. Government also issued a 3-year bond to both domestic and foreign investors to raise funds to services its maturing debts and finances its developmental projects in the traded week. The GHS650.16 million bids raised were all accepted by the Government at a relative higher rate of 19.25 percent. This brings total bids accepted to GHS1.57 billion. An amount of GHS1.01 billion is expected to be raised from the sales of the 91-Day and 182-Day T-Bills next Friday.

As largely anticipated, the yield curve kept its normality on continue investor sentiment in the domestic economy. Easing inflationary pressure with rate falling within Government’s target of 10 percent, gradual uptick in business and consumer index to pre-COVID periods and the general bullishness of the money market are factors contributing to 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 -19.95
GSE-FSI -19.93 49.51 -6.79 -6.23 -19.65

The Accra Bourse ended bearish following price declines in some blue-chip stocks. The GSE Composite Index, thus, dropped by 82 basis points to settle at 1,806.94 points, corresponding to a year-to-date loss of 19.95 percent. The GSE Financial Stocks Index also recorded a week-on-week decline of 2 basis points to settle at 1,622.81 points, reflecting a year-to-date loss of 19.65 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 15.14 13.17 -12.98
Total Value Traded (GHS M) 11.42 8.80 -22.93
Market Cap (GHS M) 53,119.28 52,963.35 -0.29

Market outturns fell marginally below the previous week’s records. A total of 13.17 million shares valued at GHS8.80 million exchanged hands in the week’s trade. This represents 12.98 percent decline in terms of volume from last week’s traded volume of 15.14 million, valued at GHS11.42 million. MTN Ghana Ltd. led the activity chart with 92.76 percent share of the overall traded volume. Market capitalization also eased by 29 basis points to GHS52,963.35 million.

Stock Price Movements

In all, a total of six equities appeared on the mover’s chart: 3 advancers and 3 laggards. Fan Milk Ltd gained a pesewa to trade at GHS1.08 per share. GCB Bank Ltd and SCB Bank Ltd also upped their share prices by a pesewa to close at GHS3.86 and GHS15.11, respectively.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
FML 4.12 1.07 1.08 0.01 -73.79%
GCB 5.10 3.85 3.86 0.01 -24.31%
SCB 18.40 15.10 15.11 0.01 -17.88%

On the flip side, Guinness Ghana Brewery Ltd dropped by 10 pesewas to trade at 90 pesewas per share. CAL Bank Ltd and MTN Ghana Ltd also went down by a pesewa each to settle at 69 pesewas and 60 pesewas, respectively.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
CAL 0.89 0.70 0.69 -0.01 -22.47%
MTNGH 0.70 0.61 0.60 -0.01 -14.29%
GGBL 1.69 1.00 0.90 -0.10 -46.75%

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7105 5.7163 CAD 4.3990 4.4033
GBP 7.6253 7.6335 CFA 96.0715 96.1659
EUR 6.8211 6.8278 JPY 0.0549 0.0550
AUD 4.2221 4.2274 ZAR 0.3741 0.3744
NGN 68.0050 68.2763 CNY 0.8679 0.8687
Source: Bank of Ghana 27.11.2020

The Ghana Cedi tumbled, losing against all the three major trading currencies. The US dollar lost its safe-haven appeal after Trump allowed the transition for the newly elected President – Mr. Biden to assume governance in January 2021. Speculations that Janet Yellen – former Fed Chairwomen will be appointed as the next Treasury secretary buoyed risk taking sentiment among investors. This follows her advocacy for more stimulus initiatives, which could be imperative to help ease the economic damage from the ongoing coronavirus pandemic. These developments dented the appeal of the greenback as investors boosted their risk taking on the equity market. Despite this, the US dollar appreciated by 0.01 percent to trade GHS5.72 on the interbank currency market. The year-to-date depreciation of the cedi thus stood at 3.15 percent.

The British pound jumped to a three-month high as improved risk-taking sentiment among investors brightened the outlook of the currency. The development and effectiveness of multi-vaccines to fight the COVID-19 pandemic as-well-as aid in the restoration of global economic activities, increased risk taking among investors. The decision by the UK Government to brush off fresh talk about a Scottish independence referendum that could wrench apart the United Kingdom after Brexit also improved market sentiment to support the pound in the week’s trading. The British pound thus closed with a week-on-week gain of 0.51 percent as it raised its selling price to GHS7.63 on the interbank currency market. The Year-to-date depreciation of the cedi thus rose to 4.10 percent.

The Euro improved its value on the international currency market, rising to its two weeks peak, as global risk taking improved. Data on effectiveness of the COVID-19 vaccine helped subdue weak economic data from the region. In the week under review, business confidence in Eurozone’s largest economy – Germany – eased in a row for the second month, slipping from 92.5 points in October to 90.5 points in November, albeit missing a target of 90.1 points. The Euro thus upped its selling price to GHS6.83 last Friday with a week-on-week gain of 0.76 percent against the local currency. The year-to-date depreciation of the cedi thus rose to 9.00 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,557.54 3,638.35 2.27 12.62
DJIA 29,263.48 29,910.37 2.21 4.81
FTSE 100 6,351.45 6,367.58 0.25 -15.58
NIKKEI 225 25,527.37 26,644.71 4.38 12.63
FTSE/JSEAllShare 56,615.28 57,822.50 2.13 1.29
NSE All Share 34,136.82 34,885.51 2.19 29.97
Nairobi All Share 143.72 143.3 -0.29 -13.89

The US equity market closed on a positive note, spurred by improved risk taking, as political uncertainty eased significantly after Trump ordered the transition process of the President elect – Joe Biden - to begin. The upward drive of the market indices was further supported by the positive data on the COVID-19 vaccines in the US and across the globe. The S&P 500 thus posted a week-on-week gain of 2.27 percent to trade at $3,638.35 points. The Dow Jones Industrial Average also registered a week-on-week rise of 2.21 percent to settle at 29,910.37 points.

The London Stock Exchange finished on a positive note, as investors embraced the decision by the UK Government to lift its national lockdown in the coming weeks, albeit with caution. The FTSE 100 thus surged by 0.25 percent to end the traded week at 6,367.58 points.

The Japanese Bourse registered a positive week-on-week closure following the general uptick in market sentiment after effectiveness of the vaccine development moved beyond the 90 percent threshold. The Nikkei 225, which also benefited, posted a weekly rise of 4.38 percent to settle at 26,644.71 points.

On the African equity market, the Johannesburg All Shares Index rebounded to record a week-on-week gain of 2.13 percent, as it settled at 57,822.50 points. The Nigerian All Share Index also made a week-on-week gain of 2.19 percent to settle at 34,885.51 points. The Nairobi All Share Index, on the other hand, recorded a week-on-week loss of 0.29 percent to close at 143.3 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 42.78 48.18 12.62 -27.00
Gold $/ounce 1,886.20 1,781.90 -5.53 16.99
Cocoa$/metric tonne 2,365.00 3,035.00 28.33 19.49
Coffee $/pound 1.0925 1.217 11.40 -6.17
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil surged further on the international commodities market as it continues to be supported by multi-factors, including the announcement of three effective vaccines against the COVID-19 pandemic, and OPEC’s projections of a rebound in demand side of the market next year, as travel and industrial sectors recovers. Brent crude oil thus rose by $5.40 to trade at $48.18 per barrel.

Gold went down as investor’s optimism surrounding the vaccine development buoyed risk taking, which in turn, affected the yellow metal as it is perceived to be a safe-haven commodity. Gold’s decline was further accelerated by the growing speculation that Janet Yellen, former Fed Chairperson, and most noted for adopting more stimulus packages, is most likely to be appointed the next Treasury Secretary. Gold thus went down by $104.30 to close at $1,781.90 per ounce.

Cocoa closed the trading week in the gains, following a huge buy by one of the world’s biggest chocolate making firm. Hershey’s decision to buy huge portions of the beans to circumvent paying the living-income differential (LID)of $400-a-tonne premium, upped the selling price of the beans on the international commodities market. Cocoa thus added $670.00 to close at $3,035.00 per metric tonne.

Coffee settled higher on the commodities market, lifted by data suggesting a contraction in global supply for the 2021/22 crop season. Data from Rabobank in the week under review forecasted that global 2021/22 coffee surplus would narrow to +2.2 million bags from a +10.2 million bags in 2020/21, due to a projected decline in Brazil’s coffee production. Coffee thus added 12 cents to trade at $1.22 per pound.

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