• Yield on 2-year Treasury Note eased but short-dated securities recorded marginal uptick.
• Ghana Stock Exchange extended its bearish run into the new month. 
• The Ghana Cedi appreciated against the Pound and Euro but lost to the US dollar.
• Global equity market sustained recovery as pandemic fears recede.  
• Brent crude oil stepped up its recovery as global economies begin to open.

Source: BOG; MOFEP; GSS.     * represents provisional estimate

Government of Ghana Treasury Securities

NB: The above are the annual yields on Government of Ghana Treasury Securities.

Yields on GoG Treasury securities were mixed adjustment at the week's auction. The yield on the 91-Day T-Bill rose by 3 basis point to settle at 13.95 percent, yields on the 182-Day and 364-Day T-Bills also saw a  basis point rise to 14.02 percent and 16.75 percent respectively. The 2-year Treasury note, however, dipped by 145 basis points to settle at 18.75 percent.  Yields on the other Government of Ghana treasury notes and bonds remained unchanged as they were not scheduled for week's auction.

Out of the GHS849.82 million bids tendered at the auction; Government accepted GHS833.88 million. This missed the week's target of GHS991.000 million with the 91-Day T-Bill been the largest share of bids accepted by Government. The issuance of the 2-year Treasury Note to both domestic and foreign investors saw Government accepting all the GHS668.76 million bids tendered by investors. This brings total bids raised at the auction to GHS1,502.64 million surpassing the GHS623.40 million worth of bids raised at the previous auction. At the upcoming auction, an amount of GHS758.00 million is expected to be raised by the Government from the sale of the short-dated treasury securities.

Illustrated above is the term structure of the Government of Ghana and this sustained its normality even after the rate adjustment recorded at the week’s auction. The normality of the yield curve is expected to be sustained in the near term following the general downtrend in the equity market and persisting uncertainties following the escalating cases of the covid-19 which has sparked investor’s demand for risk free government securities.

Ghana Stock Exchange

The Ghana Stock Exchange extended its losses into the new month-May as persistent bearish sentiments sparked intense selling pressure on the bourse. Uncertainties associated with the prolonged covid-19 pandemic and the negative signalling effect caused by the directive by the Bank of Ghana ordering Banks and Specialised Deposit-Taking Institutions (SDIs) to suspend dividend payments dragged the equity indices lower despite bullish earnings by some equities. The GSE Composite Index thus declined by 2.79 percent to settle at an index level of 2,042.05 points, representing a year-to-date loss of 9.53 percent. The GSE Financial Stocks Index also slipped by 1.70 percent to end the trading week at an index level of 1,874.05 points, corresponding to a year-to-date loss of 7.21 percent.

Market activity waned as compared to the previous week’s outturn. A total turnover of 24.26 million shares valued at GHS15.32 million exchanged hands in the week under review. This represents 11.49 percent reduction from the previous week's outturn in volume terms. MTN Ghana Ltd led the activity chart, it accounted for 99.46 percent of the overall traded volume. Market capitalization also dipped by 1.10 percent to settle at GHS54,591.93 million.

Stock Price Movements

At the pairing of the week’s opening and closing prices, no advancer was recorded. Total Petroleum Ghana Ltd led the pack of nine losers, it trimmed 38 pesewas to settle at GHS2.40 per share. GCB Bank Ltd and Republic Bank (Ghana) Ltd followed suit with price declines of 12 pesewas and 7 pesewas to close at GHS4.38 and 50 pesewas per share, respectively. Société Générale Ghana Ltd and Ecobank Ghana Ltd also slipped by 6 pesewas and 5 pesewas to close at 64 pesewas and GHS7.45 per share, respectively. Other laggards were, Enterprise Group Ltd, CAL Bank Ltd, Ghana Oil Company Ltd and MTN Ghana Ltd.

Currency Market

Source: Bank of Ghana 08.05.2020

Trading on the interbank currency market ended with the Ghana cedi appreciating against the British pound and Euro but lost marginally to the US dollar. The US dollar tumbled on account of easing investor uncertainties which snapped investors’ appetite from safe-haven assets such as the greenback. The gradual opening of the US economy for economic activities amidst the COVID-19 pandemic and the resumption of the trade dispute talk between the US and China with subsequent agreement to strengthen cooperation at the economic and health sectors raised investors risk appetite in the week under review. Despite the US dollar’s outturn on the international forex market, it recorded 0.03 percent appreciation versus the cedi at a selling price of GHS5.61. The year-to-date depreciation of the cedi thus rose to 1.23 percent. 

The British pound lost footing on the international forex market as it sunk to a two-week low due to uncertainties on how Britain will ease its coronavirus lockdown and Brexit disagreement. The decision by the Bank of England to leave its interest rate unchanged and the unwillingness to adopt any further stimulus package in bid to mitigate the negative impact of pandemic on its economy took a toll on the demand for the pound. The British pound thus posted a week-on-week depreciation of 1.28 percent to trade at GHS6.97. The year-to-date appreciation of the cedi thus widen to 5.01 percent.

The Euro dimmed its shine following a German court ruling about the justification of European Central Bank’s stimulus package which casted doubts over rolling out such a package. The single currency was further knocked down after the European Union recorded the bleakest outlook of Eurozone’s economy as it is expected to shrink by 7.5 percent, the biggest recession ever recorded in the bloc. The Euro thus depreciated by 0.70 percent to trade at GHS6.09 last Friday on the interbank currency market. The year-to-date appreciation of the cedi thus rose to 2.08 percent.

International Markets

The US equity market posted another round of weekly gain lifted by receding fears as data on US job losses for April came in much lower than investors expected. Analyst expected a minimum job loss of 22 million in April following the negative toll of the COVID-19 on the US economy, but this slightly missed forecasts to settle at 20.5 million which sparked some risk taking among investors. The S&P 500 thus rose by 3.50 percent to settle at 2,929.80 points. The Dow Jones Industrial Average ended with a weekly rise of 2.56 percent to settle at 24,331.32 points.

The London Stock Exchange sustained its upward rally supported by bullish sentiment surrounding the resumption of the trade talks between the US and China. The decision by the two sides to adopt measures that will enhance both the trade and health sectors triggered investors’ demand for risky assets. The FTSE 100 thus posted a 3.00 percent weekly rise to settle at 5,935.98 points.

The Japanese Stock Exchange closed higher after the week’s trade following additional measures by the Japanese Government to mitigate the impact of the pandemic on its economy. The announcement of a $1.1 trillion economic stimulus package that will focus on cash pay-outs to households and loans to small businesses buoyed market sentiment in the week under review. The Nikkei 225 thus recorded a 2.85 percent weekly rise to settle at 20,179.09 points.

On the African equity market, the Johannesburg All Share Index made a week-on-week rise of 1.32 percent to settle at 51,003.58 points. The Nigerian All Share Index posted a weekly gain of 4.45 percent to settle at 24,045.40 points. The Nairobi All Share Index also recorded a week-on-week rise of 0.84 percent to settle at 140.87 points.

Source:www.bloomberg.com, & www.investing.com

Brent crude oil sustained its recovery following the reopening of world economies which has spurred a rise in demand of the energy commodity. On the back of this, inventory build ups in the US for instance dropped by 11.9 million contributing to the marginal rise of the commodity. Brent crude oil thus added $4.94 to trade at $30.21 per barrel.

Gold ended the trading week in the gains as demand for the yellow metal continue to rise despite easing uncertainties in recent times after attempts to develop vaccine. The yellow metal rise was further spurred by cooling yields on US treasury securities which shifted demand towards the safe-haven asset. Gold thus added $19.85 to trade at $1,714.05 per ounce.

Cocoa trimmed its selling price on the international commodities market as the below-average rainfall patterns from top grower – Ivory Coast sparked quality concerns of its beans production. This negativity affected its pricing, kissing $33.00 to trade at $2,399.00 per metric tonne.

Coffee upped its value on the global commodities market despite the report of rising supplies of the beans from Brazil due to improving climatic conditions. Coffee ended with a weekly gain of 7 cents to trade at $1.11 per pound.

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