Weekly Highlights
Macroeconomic update
Eurobond Issuance successful
The Government of Ghana in the week under review successfully raised $3.00 billion from the issuance of a Eurobond to meet its financing needs. The bond which came in three tranches of maturities namely 7-year, 15-year and 41-year was significantly oversubscribed. About $14 billion worth of bids were tendered by investors following the robust outlook of the Ghanaian economy and its attractive and competitive pricing guidance relative to investment outturns in the global economy. At the closing bell, Government accepted $1.25 billion worth of bids for the 7-year bond at a coupon rate of 6.35 percent lower than the initial pricing guidance between 6.5 percent and 7 percent. A total of $1.00 billion worth of bids were accepted for the 15-year bond at a coupon rate of 7.87 percent also below the initial pricing guidance of 8 percent to 8.5 percent. The 41-year bond, which is the first of its kind in the sub-Saharan region, accrued $750 million dollars at a rate 8.5 percent to Government. Proceeds of the bond are expected to be used for refinancing outstanding debts within the energy sector especially those owed to Independent Power Producers (IPPs) and to finance infrastructure developments as outlined in the 2020 budget.
Key Ghana Economic Data |
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Indicator |
2017 |
2018 |
2019 |
2020 |
2020 |
|
|
|
Target |
Actual |
|
Inflation CPI (y-o-y %) |
11.8 |
9.40 |
7.90 |
8.00 |
|
Inflation PPI (y-o-y %) |
8.9 |
4.40 |
13.00 |
n/a |
|
Monetary Policy Rate (%) |
20.00 |
17.00 |
16.00 |
n/a |
16 |
GDP Growth (y-o-y %) |
8.5 |
6.3 |
5.7 |
6.8 |
|
Budget Deficit (% of GDP |
5.9 |
3.8 |
4.5Sept |
4.7 |
|
Public Debt (% of GDP) |
69.8 |
57.6 |
60.55Sept |
n/a |
|
Fx. Reserves (M. Cover) |
4.3 |
3.7 |
4.1 |
≤3.5 |
|
Source: BOG; MOFEP; GSS. * represents provisional estimate
Government of Ghana Treasury Securities
Treasury Bills, Notes & Bonds (%) |
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Date |
91-Day |
182-day |
364-day |
2-Yr |
3-Yr |
5-Yr |
Feb 10 – 14 |
14.70 |
15.18 |
17.81 |
20.95 |
20.75 |
19.50 |
Feb 03 – 07 |
14.69 |
15.14 |
17.81 |
20.95 |
20.75 |
19.50 |
Jan 27 – 31 |
14.69 |
15.15 |
17.88 |
20.95 |
20.75 |
19.50 |
2020Yr.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.
On the primary market, interest rate on Government of Ghana treasury securities were adjusted marginally. Yield on the 91-Day T-Bill rose by a basis points to settle at 14.70 percent. Interest rates on the 182-Day T-Bill also rose by 4 basis points to settle at 15.18 percent. That on the 364-Day T-Bill and Government of Ghana treasury notes and bonds were, however, unaltered as they were not scheduled for the week’s auction.
Results of Auction held on 7th February, 2020 |
|||
Bill |
Bids Tendered GHS (Million) |
Bids Accepted GHS (Million) |
Interest Rate (%) |
91-Day T-Bill |
786.78 |
786.78 |
14.7011 |
182-Day T-Bill |
74.34 |
74.34 |
15.1841 |
A total of GHS861.12 million worth of bids were tendered by investors at the week’s auction on the primary market with all bids accepted by the Government. This was in excess of the GHS711.00 million target expected to be raised in the week under review but significantly lower than the GHS925.00 million raised in the week ended 31st January 2020. Out of the total bids raised by Government, the 91-Day T-Bill dominated; constituting 91.37 percent share. An amount of GHS1,037.00 million is expected to be raised by the Government at the upcoming auction through the issuance of the 91-Day, 182-Day and 364-Day T-Bills.
Following the Government’s success in raising the $3.00 billion worth of Eurobonds amidst the significant oversubscription, it is expected that the market corrects through the moderation of yields on the short-to-medium term instruments with the purpose of shifting investors focus onto longer-term treasury instruments which will reduce the frequency of payments of maturing bills and also encourage Government to adequately executes its developmental plans.
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 |
-2.68 |
GSE-FSI |
-19.93 |
49.51 |
-6.79 |
-6.23 |
-0.09 |
On the Ghana Stock Exchange, the benchmark equity index worsening its year-to-date performance on account of reduced risk-taking sentiment spurred by mixed earnings report by some listed companies. Investors’ high expectation of a rebound in market activities in 2020 appears dimming as earnings report of some stocks appeared unexciting for the year ended 2019.
SIC Ltd posted a profit of GHS8.566 million, which was significantly lower than recorded in the year ended 2018 with a profit position of GHS44.66 million. Enterprise Group Ltd also trimmed its 2018’s profit of GHS42.65 to GHS30.06 million in 2019 to compound investors’ uncertainties about the 2017-2019 financial sector clean-up on the capital market.
On the back of this, the GSE Composite Index dropped by 70 basis points to settle at 2,196.72 points, corresponding to a year-to-date loss of 2.68 percent. The GSE Financial Stocks Index, however, upped by 77 basis points to settle at 2,017.85 points, reflecting a year-to-date loss of 0.09 percent as prices in Standard Chartered Bank surged last Friday.
GSE Market Indicators |
|||
|
Wk. Open |
Wk. End |
Change (%) |
Total Volume Traded (M) |
3.63 |
2.48 |
-31.68 |
Total Value Traded (GHS M) |
2.70 |
2.08 |
-22.96 |
Market Capitalisation (GHS M) |
56,714.42 |
56,553.66 |
-0.28 |
At the closing bell, total shares exchanging hands dropped by 31.68 percent from the previous week’s trade to 2.48 million valued at GHS2.08 million. MTN Ghana Ltd led the activity chart with 77.55 percent share of the overall traded volume. The market capitalization down trended by 0.28 percent on account of the losses recorded on the bourse to GHS56,553.66 million.
Stock Price Movements
At the pairing of the week’s opening and closing prices, a total of 7 equities altered their share prices. Standard Chartered Bank Ltd was the lone advancer, it gained GHS1.00 to end the week’s trading at GHS19.00 per share.
|
Stock Price Advancers in terms of WK closing prices |
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Equity |
Yr. Open |
Wk. Open |
Wk. End |
Wk. Change (GHS) |
YTD (%) |
SCB |
18.40 |
18.00 |
19.00 |
1.00 |
3.26 |
On the flip side on the market, GCB Bank Ltd posted the worst performance losing 14 pesewas of its opening price to settle at GHS4.85 per share. MTN Ghana Ltd and Ecobank Ghana Ltd followed suite with depreciations of 2 pesewas and 1 pesewa to trade at 86 pesewas and GHS7.89 per share respectively. Fan Milk Ltd, CAL Bank Ltd and SIC Ltd dropped by a pesewa each to trade at GHS4.10, 95 pesewas and 8 pesewas per share respectively.
|
Stock Price Losers in terms of WK closing prices |
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Equity |
Yr. Open |
Wk. Open |
Wk. End |
Wk. Change (GHS) |
YTD (%) |
GCB |
5.10 |
4.99 |
4.85 |
-0.14 |
-4.90 |
MTNGH |
0.70 |
0.68 |
0.66 |
-0.02 |
-5.71 |
EGH |
8.09 |
7.90 |
7.89 |
-0.01 |
-2.47 |
FML |
4.12 |
4.11 |
4.10 |
-0.01 |
-0.49 |
CAL |
0.89 |
0.96 |
0.95 |
-0.01 |
6.74 |
SIC |
0.08 |
0.09 |
0.08 |
-0.01 |
0.00 |
GCB |
5.10 |
4.99 |
4.85 |
-0.14 |
-4.90 |
MTNGH |
0.70 |
0.68 |
0.66 |
-0.02 |
-5.71 |
Currency Market
Currency |
Buying |
Selling |
Currency |
Buying |
Selling |
USD |
5.3581 |
5.3635 |
CAD |
4.0234 |
4.0275 |
GBP |
6.9388 |
6.9479 |
CFA |
111.4720 |
111.5611 |
EUR |
5.8798 |
5.8845 |
JPY |
0.0489 |
0.0490 |
AUD |
3.5742 |
3.5809 |
ZAR |
0.3543 |
0.3547 |
NGN |
57.0717 |
57.2582 |
CNY |
0.7651 |
0.7660 |
Source: Bank of Ghana 07.02.2020
The Ghana cedi posted its second straight week-on-week depreciation against all the three major trading currencies on the interbank currency market. The US dollar jumped to a two-week high on the international currency market as it benefitted from the risk aversion sentiment surrounding the coronavirus and upbeat economic data from the US economy. Rising yields on US treasury securities, unexpected expansion in services sector activities in January from 51.9 points to 55.5 points, the highest in 5-months and upward revision of US manufacturing activities to 51.9 points from an earlier reading of 51.7 points buoyed the value of the US dollar against its major rivalling currencies. Despite the greenback’s bullish outlook; it depreciated by 2.17 percent on the interbank currency market versus the cedi following the decline in demand of the dollar in the local market on account of global market uncertainties. The US dollar reduced its selling price to GHS5.366 corresponding to a year-to-date depreciation of 3.23 percent against the cedi.
The British pound dropped to its lowest in six weeks on account of Brexit uncertainties despite leaving the bloc on 31st January 2020. Trade rhetoric from Britain’s leader in the week under review, failed to instil confidence as it blurred the chances of UK securing a favourable trade deal from the European Union. This dimmed the potential impact of a recovery in the manufacturing and services sectors on the currency. UK’s manufacturing sector climbed out of contraction in January as it rose to its highest in nine-months to 50.00 points from a previous reading of 47.5 points. Furthermore, services sector was upwardly revised to a PMI of 53.9 points in January, reflecting the highest since September 2018. The British pound thus depreciated by 3.53 percent at a selling price of GHS6.94 on the interbank currency market. The year-to-date appreciation of the cedi thus rose to 5.36 percent.
The Euro was on the defensive against major rivals on the international currency as downbeat economic data from the Eurozone drove the single currency to its lowest in two months. Eurozone’s retail sales data contracted by 1.6 percent in December from its previous value signalling significant slow-down in economic activities among member countries. Eurozone’s largest economy – Germany had its industrial orders unexpectedly declining to its lowest in 10 months by 2.1 percent in December 2019. These and other down trending of major economic indicators dimmed the appeal of the single currency on the global forex market. The Euro thus depreciated by 2.82 percent to sell at GHS5.88 on the interbank currency market leaving the cedi with a year-to-date appreciation of 5.88 percent.
International Markets
Stock Indices |
||||
|
Wk. Open |
Wk. Close |
Change (%) |
YTD (%) |
S&P 500 Index |
3,295.47 |
3,225.52 |
-2.12 |
-0.16 |
DJIA |
28,989.73 |
28,251.47 |
-2.55 |
-1.01 |
FTSE 100 |
7,585.98 |
7,286.01 |
-3.95 |
-3.40 |
23,827.18 |
23,205.18 |
-2.61 |
-1.91 |
|
FTSE/JSEAllShare |
57,261.04 |
56,079.54 |
-2.06 |
-1.76 |
NSE All Share |
29,628.84 |
28,843.53 |
-2.65 |
7.46 |
Nairobi All Share |
164.98 |
162.09 |
-1.75 |
-2.60 |
The US equity market posted its biggest weekly rise in eight months buoyed by upbeat economic data which dimmed investors negative sentiment about the potential threat of the coronavirus on the US economy. In the week ended 7th February 2020, US non-farm payrolls came in at 225,000 jobs, beating the 160,000 jobs creation target amidst data showing that risk in the world’s largest economy has receded. The S&P 500 thus recorded a weekly rise of 3.17 percent to settle at 3,327.71 points.
The London Stock Exchange closed positively as the decision by China to halve tariffs on some imported US goods sparked investors’ hopes of ending the trade dispute amicably. China which was supposed to meet a tough target of increasing US import by $100 billion in 2020 to begin the phase 2 negotiation of the trade war made took the bold step which improved risk taking sentiment despite the effects of the coronavirus on global trade. The FTSE 100 thus recorded a week-on-week rise of 2.48 percent to settle at 7,466.70 points.
The Japanese Stock Exchange finished higher despite the economic slowdown in the Asian economies as investors took relief in the decision by China to close the trade dispute talk with US after halving tariff on imported goods from the US. The Nikkei 225 index thus upticked by 2.68 percent to settle at 23,827.98 points.
On the African equity market, the Johannesburg All Share Index rebounded by 2.13 percent to settle at 57,276.49 points. The Nairobi All Share Index also bounced back by 4.05 percent to settle at 168.65 points. The Nigerian All Share Index, however, further declined by 2.69 percent to settle at 28,067.09 points.
Commodities |
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|
Wk. Open |
Wk. Close |
Change (%) |
YTD (%) |
Crude Oil $/barrel |
58.16 |
54.47 |
-6.34 |
-17.47 |
Gold $/ounce |
1,582.90 |
1,568.60 |
-0.90 |
2.99 |
Cocoa$/metrictonne |
2,777.00 |
2,900.00 |
4.43 |
14.17 |
Coffee $/pound |
1.0265 |
0.9835 |
-4.19 |
-24.17 |
Source:www.bloomberg.com, & www.investing.com
Brent crude oil trimmed further following the economic slowdown in the world’s largest consumer – China. Recent travelling restrictions within and to China affected the demand of the energy commodity on the international commodities market leading to some members of OPEC calling for an imminent output cut decision. Brent crude oil thus went down by $3.69 to settle at $54.47 per barrel.
Gold shed value on the international commodities market despite the risk aversion sentiment on the global economy. The demand for the yellow metal in the week under review lowered as bullish economic data from the US which buoyed the greenback made the commodity relatively expensive despite the investors flight to safety. Gold thus recorded a weekly decline of $14.30 to trade at $1,568.60 per ounce.
Cocoa upped its unit price on the international commodities market as unfavourable climatic conditions in top grower – Ivory Coast threatened the September-April crop season. Supply of the soft crop was thus limited by this development leading to its gains. Cocoa thus added $123.00 to trade at $2,900.00 per metric ton.
Coffee dropped further in the week’s trading following the persisting bearish sentiment associated with the December 2019’s unprecedented rise which is believed to have been artificially manipulated. Coffee thus went down by 4 cents to trade at 98 cents per pound.
Note: The data in this publication is Friday on Friday (w/w)