Weekly Highlights

• Ghana’s economy grew at 0.4 percent in 2020.
• March’s Producer Price Inflation at 13.00 percent.
• Yields on Government of Ghana treasury securities witnessed mixed adjustment.
• GSE closed the week’s trade on a positive note.
• Ghana cedi outmuscled the US dollar but depreciated against the British pound and Euro.
• US Capital Market tumbled on planned capital gains tax hike by the US Government.
• Brent crude oil trimmed as global demand outlook dwindles.

Macroeconomic update

Ghana’s economy grew at 0.4 percent in 2020
Ghana’s economy expanded by 0.4 percent, on year-on-year basis, in 2020, the slowest economic expansion since 1984, when the economy emerged from the 1983 famine, which contracted the economy by 4.56 percent. The downwardly revised growth target of 0.9 percent was missed largely on account of the significant contraction of Ghana’s industry sector and the slow pace in recovery for the services sector. Economic growth in 2020 also came in significantly lower than 2019 outturn of 6.5 percent, which underpinned an earlier 6.8 percent growth target for 2020 before the coronavirus threat to economic activities. The provisional estimate of GDP at constant prices for 2020 is GHS165,992.70 million, representing a marginal increment over the 2019’s figure of GHS165,307.60 million.

Revised GDP data put economic growth for the 1st quarter of 2020 at 6.8 percent, up from an earlier reading of 4.9 percent. Economic contractions of 5.9 percent and 3.3 percent were respectively recorded in the 2nd and 3rd quarters of 2020 from provisional figures of 3.2 percent and 1.1 percent, respectively. Fourth quarter growth in 2020 was estimated at 3.3 percent with constant price of GH¢43,842.6 million compared to GH¢42,455.3 million in the 4th quarter of 2019. Within the quarter, the Agriculture sector had the highest growth rate of 8.2 percent, followed by the Services sector with 4.6 percent growth but contracted by 0.4 percent in the Industry sector.

GDP Growth rates between 2009 to 2020

March’s Producer Price Inflation at 13.00 percent
Producer Price Inflation for the month of March settled at 13.00 percent, (year-on-year growth), from a previous reading of 10.30 percent. The 2.70 percent increase followed rising input cost at the Manufacturing sub-sector which constitutes about two-third of the entire industry sector. The producer price inflation at the sector jumped by 4.2 percent to settle at 14.00 percent in March 2021 with five out of the sixteen sub-sectors driving inflation. The producer price inflation for the Mining and Quarrying sub-sectors, however, moderated by 150 basis points to 22.7 percent in March. The producer price inflation at the Utilities sub-sector remained unchanged for the second consecutive time at zero percent. Presented below is the trend analysis of the PPI.

Key Ghana Economic Data

Indicator 2018 2019 2020 2021 2021
Target Actual
Inflation CPI (y-o-y %) 9.40 7.90 10.40 8.00 10.30
Inflation PPI (y-o-y %) 4.40 13.00 7.00 n/a 13.00
Monetary Policy Rate (%) 17.0 16.00 14.50 n/a 14.50
GDP Growth (y-o-y %) 6.3 6.5 0.4 5.00 n/a
Budget Deficit (% of GDP 3.8 4.5Sep 11.7 9.50 n/a
Public Debt (% of GDP) 57.6 63.00 68.3 n/a n/a
Fx. Reserves (M. Cover) 3.7 4.1 4.1 4.00 n/a
Source: BOG; MOFEP; GSS. * represents provisional estimate ** data yet to be released by MoF

Government of Ghana Treasury Securities
Treasury Bills, Notes & Bonds (%)
Date 91-Day 182-day 364-day 2-Yr 3-Yr 5-Yr
Apr 26 – 30 12.78 13.57 16.53 17.60 17.70 18.30
Apr 19 – 23 12.79 13.53 16.44 17.60 17.70 18.30
Apr 12 – 16 12.81 13.61 16.44 17.60 17.70 18.30
2021 Yr. Open 14.09 14.12 17.00 18.50 19.25 19.85
NB: The above are the annual yields on Government of Ghana Treasury Securities.

Interest rate rates on the Government of Ghana treasury securities witnessed mixed adjustment. The yield on the 91-Day T-Bill dropped further by a basis point to settle at 12.78 percent. That on the 182-Day T-Bill, however, surged by 4 basis points to settle at 13.57 percent. Interest rate on the 364-Day T-Bill also rose by 11 basis points to close at 16.53 precent. The yields on treasury Notes and Bonds were, however, unchanged as they were not part of the week’s issuance.

Results of Auction held on 23rd April, 2021

Bill Bids Tendered GHS (Million) Bids Accepted GHS (Million) Interest Rate (%)
91-Day T-Bill 781.26 781.26 12.7814
182-Day T-Bill 222.11 222.11 13.5753
364-Day T-Bill 785.92 756.78 16.5256

A total of GHS1,789.29 million bids were tendered by investors at the week’s auction, with Government accepting GHS1,760.15. This was more than the week’s target of GHS1,135.00 million with the 91-Day T-Bill dominating Government purchase. It constituted 44.39 percent of the overall bids accepted by the Government. At the upcoming auction, a total of GHS673.00 million is expected to be raised by the Government from the sale of the 91-Day and 182-Day T-Bills.

The normality of the yield curve, as largely expected, was sustained as the rate moderation recorded at the week’s auction was unable to alter the general uptrend of the curve. This development coupled with signs of economic recovery, as seen in the quarterly readings in the 4th quarter of 2020, despite economic growth missing target, is expected to contribute to the downward revision of the policy rate. This will intend boost private sector participation in the domestic economy.

Ghana Stock Exchange

Ghana Stock Exchange (GSE) Indices (YTD %)
Year 2017 2018 2019 2020 2021
GSE-CI 52.73 -0.29 -12.25 -13.98 20.72
GSE-FSI 49.51 -6.79 -6.23 -11.73 4.56

The Accra Bourse posted another round of weekly gains, spurred by demand pressures in CAL Bank Ltd and MTN Ghana Ltd. At the closing bell, the GSE Composite Index saw 1.83 percent weekly rise to settle at an index level of 2,343.91 points. The year-to-date return of the Index thus settled at 20.72 percent. The GSE Financial Stocks Index also ended with a weekly gain of 1.25 percent to settle at 1,864.04 points, representing a year-to-date return of 4.56 percent.

GSE Market Indicators
Wk. Open Wk. End Change (%)
Total Volume Traded (M) 18.20 3.64 -79.98
Total Value Traded (GHS M) 14.09 3.13 -77.80
Market Cap (GHS M) 58,088.58 58,525.05 0.75

The week’s trade realized a total of 3.64 million shares valued at GHS3.13 million exchanging hands. This represents about 80 percent declines from the previous week’s trade of 18.20 million shares valued at GHS14.09 million. CAL Bank Ltd was the most actively traded stock during the week’s trading session as it accounted for 86.21 percent of the overall traded volume. The market capitalization, however, posted a gain 0.75 percent as it settled at GHS58,525.05 million.

Stock Price Movements

At the pairing of the week’s opening and closing prices, a total of seven (7) equities appeared on the mover’s chart. CAL Bank Ltd led the bulls with a price appreciation of 15 pesewas to trade at 84 pesewas per share. Guinness Ghana Brewery Ltd and Société Générale Ghana Ltd also gained 9 pesewas and 5 pesewas to trade at 99 pesewas and 80 pesewas per share, respectively. MTN Ghana Ltd and Fan Milk Ltd also upped by 3 pesewas each to trade at 96 pesewas and GHS1.15 per share respectively. Enterprise Group Ltd also joined the advancers with a price uplift of 2 pesewas to end the week’s trade at GHS1.48 per share.

Stock Price Movers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
CAL 0.69 0.69 0.84 0.15 21.74
GGBL 0.90 0.90 0.99 0.09 10.00
SOGEGH 0.64 0.75 0.80 0.05 25.00
MTNGH 0.64 0.93 0.96 0.03 50.00
FML 1.08 1.12 1.15 0.03 6.48
EGL 1.4 1.46 1.48 0.02 5.71

On the flip side, Unilever Ghana Ltd dropped further by GHS1.47 to trade at GHS3.99 per share.

Stock Price Movers in terms of WK closing prices
Equity Yr. Open Wk. Open Wk. End Wk. Change (GHS) YTD (%)
UNIL 8.29 5.46 3.99 -1.47 -51.87

Currency Market
Currency Buying Selling Currency Buying Selling
USD 5.7280 5.7338 CAD 4.5808 4.5852
GBP 7.9322 7.9407 CFA 94.7915 94.8847
EUR 6.9132 6.9200 JPY 0.0531 0.0531
AUD 4.4317 4.4365 ZAR 0.4011 0.4015
NGN 71.5437 71.5647 CNY 0.8819 0.8827
Source: Bank of Ghana 23.04.2021

On the interbank currency market, the Ghana cedi posted mixed performance against the three major trading currencies. The US dollar weakened further on the international currency market as recent dovish stance by the US Fed to adjust its interest rate dimmed market sentiments. The decision to keep interest rate low until inflation and unemployment converge to targets have underpinned the US dollar’s weakness in recent times. This subdued positive data from the US labour market as unemployment filling claims kept dwindling. Jobless claims fell to 547,000 from a previous record of 586,000. The US dollar thus posted a week-on-week depreciation of 0.02 percent to trade at GHS5.73. The year-to-date appreciation of the cedi thus rose marginally to 0.51 percent.

The British pound posted sterling performance on the international forex market following as trio of upbeat data on the UK economy buoyed the demand of the currency. British retail sales data soared by 5.4 percent in March from a previous figure of 2.5 percent. UK’s headline inflation also rose by 0.7 percent in March, up from 0.4% in February with other upbeat growth performances within the Factory and services. Unemployment rate in March, unexpectedly dropped to 4.9 percent, representing 0.1 percentage point decline from the previous month to support the demand for the pound. The British pound thus recorded a week-on-week appreciation of 0.20 percent as its selling price rose to GHS7.94 on the interbank currency market. The year-to-date depreciation of the Cedi thus widened to 0.78 percent.

The Euro buoyed to a seven-week high, lifted by impressive economic data from the bloc. Data from the bloc saw the PMI of activities across both manufacturing and services hitting 53.7 in April versus 53.2 in March. Germany, Eurozone’s largest economy, also saw inflation rising at its fastest pace in ten years to 3.7 percent in March from 1.9 percent in February 2021. Italy’s construction sector also expanded for the second straight month in February 2021 by 1.4 percent to support the currency. The Euro thus ended with a week-on-week gain of 0.74 percent to sell at GHS6.92. The year-to-date appreciation of the cedi thus trimmed by 2.13 percent.

International Market

Stock Indices
Wk. Open Wk. Close Change (%) YTD (%)
S&P 500 Index 4,185.47 4,180.17 -0.13 11.29
DJIA 34,200.67 34,043.49 -0.46 11.23
FTSE 100 7,019.53 6,938.56 -1.15 7.40
NIKKEI 225 29,683.37 29,020.63 -2.23 5.74
FTSE/JSEAllShare 68,698.78 67,295.74 -2.04 13.28
NSE All Share 38,808.01 39,301.82 1.27 -2.4
Nairobi All Share 165.08 165.61 0.32 8.88%

Wallstreet closed in the red as investors digested the effects of the planned capital gains tax hike by the US Government on firms. Speculations that such a policy could affect stocks performance subdued upbeat earnings report by some financial and technical stocks. The S&P 500 thus clocked a week-on-week decline of 0.13 percent as it settled at 4,180.17 points. The Dow Jones Industrial Average also went down by 0.46 percent to settle at 34,043.49 points.

The London Stocks Exchange failed to end the week’s trade in the gains despite consumer sentiment and retail data from the UK showed impressive performance. The negative weekly performance of the FTSE 100 was on the back of the strong pound which affected demand from non-pound holders on the Bourse. The FTSE 100 thus dipped by 1.15 percent to settle at an index level of 6,938.56 points.

The Japanese Stock Exchange posted a weekly decline on account of falling share prices within the Paper & Pulp, Railway & Bus and Real Estate sectors. The Nikkei 225 thus went down by 2.23 percent to settle at 29,020.63 points.

On the African equity market, the Nigerian All Share Index finished positively with a gain of 1.27 percent as it rose to settle at 39,301.82 points. The Nairobi All Share Index also ended with a weekly gain of 0.32 percent as it settled at 165.61 points. The Johannesburg All Share Index, however, tumbled by 2.04 percent to settle at 67,295.74 points.

Commodities
Wk. Open Wk. Close Change
(%) YTD (%)
Crude Oil $/barrel 66.77 66.11 -0.99 27.63
Gold $/ounce 1,779.00 1,777.00 -0.11 -6.23
Cocoa$/metric tonne 2,408.00 2,410.00 0.08 -7.41
Coffee $/pound 1.2915 1.3685 5.96 6.71
Source:www.bloomberg.com, & www.investing.com -

Brent crude oil ended the trading week lower on the international commodities market following demand outlook concerns of the commodity. Global demand looks blur following the resurgence of the COVID-19 pandemic in India and Japan, the 3rd and 4th largest oil importers respectively, after China and the U.S, which sparked worries among the investing community. Brent crude oil thus went down by $0.66 to close at $66.11 per barrel.

Gold succumbed to last minute mild selling pressure after touching the $1,800.00 mark. Gold which benefited from the dovish stance by the US Fed on inflation outlook in the world’s biggest economy, erased all gains in the few hours to the close of last week’s trade. Gold thus shed $2.00 to trade at $1,777.00 per ounce

Coffee price rose to its highest in five weeks on the international commodities market following dry climatic conditions in top grower – Brazil. Data by Brazil Meteorological Agency indicated excessive dryness in the country, especially in Minas Gerais, the largest growing coffee region in the country. Coffee price thus rose on account of this and with support from the Brazilian real posted a weekly gain of 8 cents. It ended the week at $1.37 per pound.

Cocoa finished higher on accounts of the hawkish commentary expressed by the CEO of Barry Callebaut, the world’s largest manufacturer of cocoa products. His optimism that the demand of chocolate will rise significantly in Asia buoyed the value of the product. Cocoa thus added $2.00 to trade at $2,410.00 per metric tonne.

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