Weekly Highlights

? Interest rates eased on short-dated treasury securities.
? Accra Bourse saw its indices closing mixed.
? Cedi fell again against all the three major trading currencies.
? Global equity markets stepped up recovery.
? Brent crude climbed further on supply disruptions.

Ghana Economic Data

Indicator 2017 2018 2019 2020 2020
Target Actual
Inflation CPI (y-o-y %) 11.8 9.40 7.90 8.00 10.6
Inflation PPI (y-o-y %) 8.9 4.40 13.00 n/a 7.40
Monetary Policy Rate (%) 20.00 17.00 16.00 n/a 14.50
GDP Growth (y-o-y %) 8.5 6.3 6.5 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 63.00 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 (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Jun 08 – 12 13.95 14.06 16.88 18.75 18.85 21.70
Jun 01 – 05 14.02 14.07 16.88 18.75 18.85 21.70
May 18 – 22 13.87 14.00 16.70 18.75 19.00 21.70
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.

Last Friday, the yield on the 91-Day eased further by 7 basis points to settle at 13.95 percent and that on the 182-Day also dropped by a basis point to 14.06 percent. Yields on the 364-Day T-Bill and Government of Ghana treasury Notes and Bonds were, however, unchanged as they were not part of the week’s issuance.

Results of Auction held on 5th June, 2020

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 848.46 848.46 13.9517
182-Day T-Bill 76.77 76.77 14.0565

Government raised a total of GHS925.23 million worth of bids from the primary market. This came after accepting all tendered bids by investors and this exceeded the week’s target of GHS875.00 million. Bids accepted by the Government on the 91-Day Treasury Bill far outstripped that of the 182-Day T-Bill as it constituted 91.70 percent of the overall bids raised. At the upcoming auction, Government hopes to raise GHS1,182.00 million from the issuance of the short-dated treasury securities.

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The normality of the yield curve was sustained after the week’s auction with the general uptrend attributed to Bank of Ghana’s long-standing commitment to keep interest on long-dated treasury securities relatively higher than those on the short-dated ones and the general flight to safety adopted by most investors. The flight to safety follows the uncertainties associated with the COVID-19 pandemic and the 2017-2019 financial market clean-up which has significantly increased investors’ appetite for treasury securities.

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 -13.14
GSE-FSI -19.93 49.51 -6.79 -6.23 -9.05

The Accra Bourse closed mixed on the first trading week in June but with MTN Ghana overturning the southward drive of the benchmark Index. The GSE Composite Index made a rebound of 1.01 percent as it settled index level of 1,960.63 points last Friday. This corresponded to a reduced year-to-date loss of 13.14 percent. The GSE Financial Stocks Index, however, tumbled to record a week-on-week loss of 0.34 percent as it settled at 1,836.79 points. The year-to-date loss of the index thus widen to 9.05 percent.

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GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 35.40 17.57 -50.37
Total Value Traded (GHS M) 21.11 11.73 -44.43
Market Capitalisation (GHS M) 53,542.60 53,745.96 0.38

Market turnout fell below the previous week’s record. Trades stood at 17.57 million valued at GHS11.73 million, representing 50.37 percent decline from the previous week’s trades of 35.40 million valued at GHS21.11 million. MTN Ghana led the activity chart with 95.04 percent of the overall traded volume. Market capitalization, however, rebounded by 0.38 percent to close at GHS53,745.96 million.

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Stock Price Movements

A total of four equities altered their week opening prices with three laggards and one price advancer. MTN Ghana Ltd emerged as the lone advancer, it gained 3 pesewas to close at 58 pesewas per share.

Stock Price Advancers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
MTNGH 0.70 0.55 0.58 0.03 -17.14

On the laggard’s list Fan Milk Ltd occupied the bottom after trimming 93 pesewas of its week’s opening price of GHS3.45 to close at GHS2.45 per share. Total Petroleum Ghana Ltd and Société Générale Ghana Ltd also went down by 9 pesewas and 5 pesewas to close at GHS2.40 and 60 pesewas per share, respectively.

Stock Price Losers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
FML 4.12 3.38 2.45 -0.93 -40.53
TOTAL 3.00 2.49 2.40 -0.09 -20.00
SOGEGH 0.72 0.65 0.60 -0.05 -16.67

Currency Market

Currency Buying Selling Currency Buying Selling
USD 5.6202 5.6258 CAD 4.1910 4.1943
GBP 7.1376 7.1453 CFA 103.1022 103.1590
EUR 6.3587 6.3622 JPY 0.0513 0.0513
AUD 3.9193 3.9271 ZAR 0.3333 0.3336
NGN 64.0228 64.2006 CNY 0.7956 0.7962
Source: Bank of Ghana 05.06.2020

The Ghana Cedi posted another round of weekly depreciation against the three major trading currencies as the reopening of economies has significantly contributed to their bullish outlook. The US dollar tumbled on the international currency as it dimmed its safe-haven appeal on investors’ optimism surrounding the reopening of US economy and better-than-expected economic data which buoyed their demand for riskier assets. Purchasing managers' index for US Manufacturing sector surged from 41.5 in April to 43.1 in May and unemployment filing for May also shrank to 2.76 million from the 19.6 million recorded in April to spark risk taking activities which sapped demand for the greenback. Despite these, the US dollar advanced by 0.05 percent as it traded at GHS5.63 on the interbank currency market. The year-to-date depreciation of the cedi now stands at 1.59 percent.

The British Pound rose to a month-high after the week’s trading on the international currency market. This follows hawkish commentary by the Bank of England as it downplayed the prospects of adopting negative interest rates to mitigate the effect of the pandemic on UK’s economy. The Pound Sterling was further lifted by positive developments surrounding the Brexit negotiations as UK Government indicated its commitment to compromise to obtain a favourable trade deal with the European Union. The Pound thus appreciated by 3.20 percent at GHS7.15 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 2.45 percent.

The Euro recorded its biggest weekly gain in two-and-half months after the European Central Bank scaled up its stimulus reliefs programmes to support heavy hit member countries. The central bank nearly doubled its coronavirus asset purchase program to €1.35 trillion from €750 billion under the Pandemic Emergency Purchase Programme which significantly improved market sentiment to strengthen the euro. The Euro thus recorded a week-on-week appreciation of 1.93 percent as it traded at GHS6.36 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 2.34 percent last Friday.

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International Markets
Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 3,044.31 3,193.93 4.91 -1.14
DJIA 25,383.11 27,110.98 6.81 -5.00
FTSE 100 6,076.60 6,484.30 6.71 -14.03
NIKKEI 225 21,877.89 22,863.73 4.51 -3.35
FTSE/JSEAllShare 50,483.00 54,722.38 8.40 -4.14
NSE All Share 25,267.82 25,016.30 -1.00 -6.80
Nairobi All Share 137.13 139.18 1.49 -16.36

US capital market pulled up significantly in the week under review lifted by rising risk-taking sentiment associated with the gradual recovery of the US economy from the COVID-19 pandemic. Upbeat manufacturing data coupled with strong recovery of labour market data as unemployment shrank to 13.3 percent in May 2020 from a previous rate of 14.7 percent in April. This eased investors’ fears about earlier projections of negative effects of the pandemic on the US economy. The S&P 500 thus posted a weekly gain of 4.91 percent to end the week at 3,193.93 points. The Dow Jones Industrial Average also made a weekly gain of 6.81 percent as it settled at 27,110.98 points.

The London Stocks Exchange ended positive spurred by the significant recovery of energy sector stocks on the bourse. OPEC’s decision to extend the oil production cut to the end of July contributed to the significant recovery of energy stocks to help close the bourse in the gains. FTSE 100 thus posted a weekly gain of 6.71 percent to settle at 6,484.30 points.

The Japanese Stock Exchange whipsawed previous week’s decline to close positive following the general uptick in risk taking sentiment on the global market. The signs of a pick-up in economic activity in Japan and some advanced economies amidst Saturday’s production cut decision by OPEC and its allies supported the Japanese Bourse. The Nikkei 225 thus upped by 4.51 percent to settle at 22,863.73 points.

On the African equity market, mixed outturns were recorded. The Johannesburg All Share Index climbed further by 8.40 percent to settle at 54,722.38 points. The Nairobi All Share Index also rose by 1.49 percent to close at 139.18 points but the Nigerian All Share Index fell by 1.00 percent to settle at 25,016.30 points.

Commodities
Wk. Open Wk. Close Change (%) YTD (%)
Crude Oil $/barrel 35.33 42.05 19.02 -36.29
Gold $/ounce 1,751.70 1,689.20 -3.57 10.91
Cocoa$/metric tonne 2,454.00 2,406.00 -1.96 -5.28
Coffee $/pound 0.963 0.977 1.45 -24.67
Source:www.bloomberg.com, & www.investing.com

Brent crude oil climbed further to trade above the $40.00 benchmark on the international commodities market. Angola’s decision to reduce crude oil export to China as it seeks debt relief to mitigate the impact of the coronavirus impact on its economy affected global supply which lifted the value of the energy commodity. OPEC and its allies’ meeting on 6th June to decide on the extension of production cut and force Iraq and Nigeria to comply with the regulations also contributed to the commodity’s gain. Brent crude oil thus traded $6.72 higher at $42.05 per barrel.

Gold trimmed its value on the international commodities market as growing positive sentiments across the advanced economies forced the yellow metal to give up some of its recent gains. Declining unemployment fillings in the US and Eurozone’s €1.35 trillion stimulus package eased market uncertainties to buoy the demand for riskier assets. Gold thus lost $62.50 to trade at $1,689.20 per ounce.

Cocoa traded lower on account of improving climatic conditions in Ivory Coast as it recorded adequate rainfall in the week under review. The expectation for more rainfall in cocoa growing areas in Ivory Coast lowered the price of the beans on the international commodities market. Cocoa thus went down by $48.00 to trade at $2,406.00 per metric tonne.

Coffee rose marginally lifted by the rebound of the Brazilian real to subdue the growing concerns of supply glut in top growers – Brazil and Vietnam. Coffee traded a cent higher at 97.70 cents last week.

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