Weekly Highlights
Macroeconomic update
Government raised GHS1.07 billion from the issuance of a 3-year bond
The Government of Ghana as part of its measures of raising adequate funds to finance its developmental projects as enshrined in the 2020 budget statement issued a 3-year bond in the week under review. The cedi denominated bond which targeted both resident and non-resident investors had Absa, Databank, Fidelity, IC Securities and Stanbic Bank as bookrunners. A total of GHS1,073.81 million worth of bonds were tendered by investors with all bids accepted at pervious yield value of 20.75 percent.
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 |
7.8 |
Inflation PPI (y-o-y %) |
8.9 |
4.40 |
13.00 |
n/a |
13.3 |
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 |
n/a |
Budget Deficit (% of GDP |
5.9 |
3.8 |
4.5Sept |
4.7 |
n/a |
Public Debt (% of GDP) |
69.8 |
57.6 |
60.55Sept |
n/a |
n/a |
Fx. Reserves (M. Cover) |
4.3 |
3.7 |
4.1 |
≤3.5 |
n/a |
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 |
Mar 09 – 13 |
14.75 |
15.19 |
17.79 |
20.20 |
20.75 |
19.50 |
Mar 02 – 06 |
14.73 |
15.17 |
17.71 |
20.20 |
20.75 |
19.50 |
Feb 24 – 28 |
14.75 |
15.17 |
17.81 |
20.20 |
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.
Interest rates on the Government of Ghana treasury securities were upwardly adjusted at last Thursday’s auction. The yield on the 91-Day T-Bill inched up by 2 basis points to settle at 14.75 percent. The 182-Day T-Bill saw its yield rising by 2 basis points to 15.19 percent at the end of the week’s auction. Interest rates on the 364-Day T-Bill also surged by 8 basis points to settle at 17.79 percent. Yields on treasury notes and bonds, however, were unaltered as they were not scheduled for the week’s auction.
Results of Auction held on 5th March, 2020 |
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Bill |
Bids Tendered GHS (Million) |
Bids Accepted GHS (Million) |
Interest Rate (%) |
91-Day T-Bill |
785.56 |
785.56 |
14.7502 |
182-Day T-Bill |
76.33 |
76.33 |
15.1899 |
364-Day T-Bill |
57.86 |
56.93 |
17.7875 |
Government raised GHS919.75 million worth of bids, out of the GHS918.82 million bids tendered by investors at the auction. This fell below the GHS1.04 billion target for the week but exceeded the GHS609.40 million raised at the previous week’s auction. The 91-Day T-Bill dominated Government’s purchase, constituting 85.41 percent share of the overall bids raised at the auction. An amount of GHS1.00 billion is anticipated to be raised from the issuance of the 91-Day,182-Day and 364-Day T-Bills.
The yield curve sustained its normality as the rate adjustment witnessed at the auction were marginal and unable to alter the general upward slopping of the curve. The relative attractiveness of the yields on the long-dated treasury securities over the short-dated ones, robustness of the domestic economy despite signs of global economic threat, and Government’s indication to borrow funds to finance its numerous developmental project this year also contributed to the maintenance of the normality of the yield curve.
Ghana Stock Exchange
Ghana Stock Exchange (GSE) Indices (YTD %) |
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Year |
2016 |
2017 |
2018 |
2019 |
2020 |
GSE-CI |
-15.33 |
52.73 |
-0.29 |
-12.25 |
-3.06 |
GSE-FSI |
-19.93 |
49.51 |
-6.79 |
-6.23 |
-2.69 |
The Ghana Stock Exchange tumbled despite some corporate actions and Government commitment in improving liquidity in the domestic economy. The recently released earnings report for the year ended 2019, with majority of listed companies improving upon their 2018’s outturn and dividend declaration by AngloGold Ashanti Ltd and MTN Ghana Ltd, were unable to subdue the persisting bearish investors sentiment. The decision by Government to commence payment of investors’ locked-up funds of defunct financial institutions was unable to cause a major recovery in investors’ sentiment. At the closing bell, the GSE Composite Index thus went down by 108 basis points to settle at an index level of 2,188.05 points, corresponding to a year-to-date loss of 3.06 percent. The GSE Financial Stocks Index, however, rose marginally by 4 basis points to settle at 1,965.36 points, reflecting a year-to-date loss of 2.69 percent.
GSE Market Indicators |
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|
Wk. Open |
Wk. End |
Change (%) |
Total Volume Traded (M) |
3.26 |
9.90 |
203.68 |
Total Value Traded (GHS M) |
1.82 |
7.43 |
308.24 |
Market Capitalisation (GHS M) |
56,529.36 |
56,281.93 |
-0.44 |
At the end of the truncated week, a total of 9.90 million shares valued at GHS7.43 million exchanged hands, representing over two hundred percent increment over the previous week’s outturn. MTN Ghana Ltd led the activity chart accounting for 84.87 percent of the overall traded volume. Market capitalization dropped by 0.44 percent following the bearishness of the market in the trading week to settle at GHS56,281.93 million.
Stock Price Movements
In all, five equities altered their opening prices with one equity appearing on the bulls list and four equities on the bears list. CAL Bank Ltd was the lone advancer, it gained 2 pesewas to trade at 92 pesewas 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 (%) |
CAL |
0.89 |
0.90 |
0.92 |
0.02 |
3.37 |
On the flip side, GCB Bank Ltd and Standard Chartered Bank Ltd shed 2 pesewas each to end the week’s trading at GHS4.82 and GHS19.00 per share respectively. MTN Ghana Ltd and Guinness Brewery Ltd also had their share prices trimmed by 2 pesewas each to trade at 68 pesewas and GHS1.60 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 |
4.84 |
4.82 |
-0.02 |
-5.49 |
GGBL |
1.69 |
1.62 |
1.60 |
-0.02 |
-5.33 |
MTNGH |
0.70 |
0.70 |
0.68 |
-0.02 |
-2.86 |
SCB |
18.40 |
19.02 |
19.00 |
-0.02 |
3.26 |
Currency Market
Currency |
Buying |
Selling |
Currency |
Buying |
Selling |
USD |
5.2974 |
5.3027 |
CAD |
3.9516 |
3.9561 |
GBP |
6.8426 |
6.8516 |
CFA |
110.5012 |
110.5980 |
EUR |
5.9310 |
5.9362 |
JPY |
0.0496 |
0.0497 |
AUD |
3.4945 |
3.5018 |
ZAR |
0.3412 |
0.3416 |
NGN |
57.7358 |
57.9245 |
CNY |
0.7630 |
0.7640 |
Source: Bank of Ghana 05.03.2020
On the interbank currency market, the Ghana cedi lost its footing against all the three major trading currencies, despite COVID-19 threat on global economic activities. The US dollar posted a weekly gain on the international currency market as sudden decision by the US Fed to cut interest rate lifted the greenback from five months low. The US Fed in a bid to avert severe effect of the coronavirus on its economic activities unanimously dropped its interest rate from 1.6 percent to 1.1 percent in the week under review. This buoyed market sentiment with investors calling on other central banks to follow suit to mitigate the negative effects of the novel virus. The US dollar thus advanced by 0.10 percent as its selling price edged up to GHS5.30 on the interbank currency market. The year-to-date appreciation of the cedi thus dropped to 4.41 percent.
The British Pound ended the trading week in the gains on the international forex market as upbeat economic data from the UK’s construction injected the market with positive sentiment. The PMI for UK’s construction sector sharply rebounded in February, beating the technical mark of 50 points which signalled growth. February’s PMI jumped to 52.6 points from a previous month’s reading of 48.4 points which overshadowed cooling services data to support the pound sterling. Market anticipation that the Bank of England will adopt similar posture like the US Fed by cutting its interest rates by 25 basis points from the current 0.75 percent to 0.50 percent also contributed to be positive closure of the currency. The British pound thus recorded a weekly appreciation of 0.87 percent as its selling price rose to GHS6.85 on the interbank currency market. This reduced the year-to-date appreciation of the cedi to 6.84 percent.
The Euro was on the defensive as it dropped to its lowest in two-months on account of daunting inflation outlook exposing more weakness from the bloc. Eurozone’s headline and core inflation were significantly far below the central bank’s target of 2 percent as both rates settled at 1.2 percent in February 2020 and below the 1.4 percent recorded in January 2020. The consistent inflation divergence and threat of economic slowdown as Italy records high COVID-19 cases weighed on the euro in the week under review. Despite this, the Euro appreciated by 2.21 percent with a selling price of GHS5.94 on the interbank currency market. The year-to-date appreciation of the cedi thus dropped to 4.66 percent.
International Markets
Stock Indices |
||||
|
Wk. Open |
Wk. Close |
Change (%) |
YTD (%) |
S&P 500 Index |
2,954.22 |
2,972.37 |
0.61 |
-8.00 |
DJIA |
25,409.36 |
25,864.78 |
1.79 |
-9.37 |
FTSE 100 |
6,528.50 |
6,462.55 |
-1.01 |
-14.32 |
21,142.96 |
20,749.75 |
-1.86 |
-12.29 |
|
FTSE/JSEAllShare |
51,038.18 |
52,064.72 |
2.01 |
-8.79 |
NSE All Share |
26,216.46 |
26,279.61 |
0.24 |
-2.10 |
Nairobi All Share |
148.6 |
156.17 |
5.09 |
-6.15 |
US stocks finished the trading week in gains, despite recording a significant decline last Friday following unsuccessful attempt of OPEC and its allies in agreeing to an output cut decision. The positive closure of the market hinged on robustness of macroeconomic data recently recorded in the US putting the economy at an advantage over rival economies. The S&P 500 thus recorded a week-on-week rise of 0.61 percent to settle at 2,972.37 points. The Dow Jones Industrial Average also increased by 1.79 percent to settle at 25,864.78 points.
The London Stock Exchange was on the defensive following investors’ fear of the COVID-19 spread and the uncertainties that have engulfed the global oil market. Shares of International Consolidated Airlines Group which operates the British Airways dropped by 5 percent, following the confirmation that two staffs tested positive for the virus. Shares of Cineworld Group PLC also tumbled by 6 percent as they failed to open on fears of the COVID-19 spread. The FTSE 100 thus dropped by 1.01 percent to settle at an index level of 6,462.55 points.
The Japanese Stock Exchange ended in the red on fears that Japan’s economy could shrink much faster than expected as the COVID-19 threatens global economy. Japan’s economy contracted at an annual rate of 7.1 percent in the 4th quarter of 2019, against a preliminary contraction rate of 6.3 percent and a forecast decline of 6.6 percent. This significantly affected stocks within the Paper & Pulp, Railway & Bus and Real Estate sectors. The Nikkei 225 thus fell by 1.86 percent to settle at 20,749.75 points.
On the African equity market, the Johannesburg All Share Index made a weekly gain of 2.01 percent to settle at 52,064.72 points. The Nigerian All Share Index ended with a week-on-week rise of 0.24 percent to settle at 26,279.61 points. The Nairobi All Share Index also upped by 5.09 percent to close at 156.17 points.
Commodities |
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|
Wk. Open |
Wk. Close |
Change (%) |
YTD (%) |
Crude Oil $/barrel |
50.52 |
45.27 |
-10.39 |
-31.41 |
Gold $/ounce |
1,566.70 |
1,672.40 |
6.75 |
9.80 |
Cocoa$/metrictonne |
2,679.00 |
2,702.00 |
0.86 |
6.38 |
Coffee $/pound |
1.11 |
1.056 |
-4.86 |
-18.58 |
Source:www.bloomberg.com, & www.investing.com
Brent crude oil tumbled slashing its value by about 30 percent on the international commodities market as plans to have a much tighter output cut measures failed. Russia balked at adopting the further steep to cut production as means of mitigating the adverse impact of the COVID-19 which has significantly trimmed demand. This development made Saudi Arabia to stage a price war by increasing its output above 10 million barrels per day in April which sparked uncertainties in the global market. Brent crude oil significantly dropped by $5.25 to settle at $45.27 per barrel.
Gold finished higher despite measures adopted by advanced economies to combat the spread of the COVID-19. The week under review saw the International Monetary Fund announcing a $50 billion aid package and the US House of Representatives approving a $8.3 billion as means of easing the impact of the disease on global economic activities. The positive closure of the yellow metal follows some level of uncertainties surrounding the disease which triggered the demand for safe-haven assets like the Gold. Gold thus added $105.70 to its opening price to close at $1,672.40 per ounce.
Cocoa surged on the international commodities market as the dry weather conditions in top grower – Ivory Coast continue to threaten the supply of the beans. Cocoa thus gained $23.00 to end the week’s trade at $2,702.00 per metric tonne.
Coffee retreated from its recent seven-week high on the fast depreciation of the Brazilian real following the heightened concerns over the COVID-19. Coffee dropped by 5 cents to end the trading week at $1.06 per pound.
Note: The data in this publication is Friday on Friday (w/w)