Risk takers give GSE firm grounding

The Ghana Stock Exchange (GSE) sustained its upward rally after risk appetites of investors kept improving due to current developments in the money market and positive financial footings of some listed companies.

The GSE Composite Index rode on the back of advancers to close the week up by 0.13 per cent to settle at 2,271.31 points. This represented a year-to-date return of 34.47 per cent.

The GSE Financial Index also ticked up by 0.34 per cent to an index level of 2,099.28 points, also representing a year-to-date gain of 35.84 per cent.

The excitement saw 27 equities trading a total volume of 2.62 million shares valued at GH¢2.91 million.

Although substantial, the week’s total trade represented a 37.53 per cent decline from the previous week’s trades.

The top five stocks for the week were Societe Generale Ghana Ltd, Total Petroleum Ltd, SIC Ltd, CAL Bank Ltd and Ecobank Transnational Incorporated.
 
These equities jointly accounted for 82.03 per cent of the total traded volume.

Market capitalisation declined by 0.32 per cent to settle at GH¢57.3 billion on August 11.

Price movements

A total of 15 stocks witnessed price changes in the week’s trading.

On the list of advancers, Enterprise Group Ltd topped the list of gainers with a price appreciation of 30 pesewas to close at GH¢2.97 per share. HFC Bank Ltd and Standard Chartered Bank Ltd increased by seven pesewas and five pesewas to settle at 80 pesewas and GH¢26.3 per share respectively.
 
Benso Oil Palm Plantation Ltd and Unilever Ghana Ltd rose by four pesewas each to trade at GH¢5.08 and GH¢9.05 per share respectively. Fan Milk Ltd and Cal Bank Ltd increased by two pesewas and three pesewas to trade at GH¢16.10 and 91 pesewas per share respectively.

On the downside of the market, Guinness Ghana Brewery Ltd and Ghana Oil Company Ltd lost five pesewas and two pesewas to trade at GH¢1.40 and GH¢2.29 per share respectively.

Four financial stocks; GCB Bank Ltd, Ecobank Transnational Incorporated, UT Bank and SIC Ltd witnessed a pesewa lost each.
 
Other laggards in the week’s trading were Mechanical Lloyd Company Ltd and Starwin Products Ltd.

Treasury securities

At the end of the auction, the yields on the 91-Day T-Bill rose by 26 basis points to settle at 12.62 per cent while the 182-Day T-Bill rate increased by eight basis points to settle at 13 per cent.

The rise was to stimulate investor interest in subsequent auctions. The yield on the 2-Year note was unchanged at 17 per cent.

A total of GH¢755.52 million of bid was tendered but the government accepted GH¢671.47 million worth of the bid.

The overall out-turn was below the week’s target of GH¢960 million with most of the purchase largely constituting the short-dated treasury securities.

The 91-Day and 182-Day T-Bills accounted for 96 per cent of the total accepted bid.

The target for this week is GH¢669 million for the 91-Day and 182-Day T-Bills, GH¢200 for the 1-year note and GH¢1.5 billion for the 5-year bond.
Currency market

The cedi appreciated against the British pound but depreciated versus the US dollar and the euro.

The British pound settled at a three weeks’ low against a basket of currencies on investors’ scepticism about outlook of UK’s economy. The local currency thus appreciated by 0.47 per cent to reduce its exchange rate to GH¢5.68 per pound, representing a year-to-date depreciation of 9.28 per cent.
 
The US dollar slipped to a one-week low against its rivals on the international currency market on the back of growing geopolitical tension between the US and the North Korea.

As a result, the cedi, which was trading at GH¢4.38 per dollar, settled with a year-to-date depreciation of 4.22 per cent.

The euro similarly fell on the international forex market on dwindling risk appetite of investors due to unexciting economic data from Eurozone’s largest economy – Germany.

The cedi thus traded at GH¢5.16 per euro, bringing its year-to-date depreciation of 16.35 per cent.
Commodities

The price of Brent crude oil settled at US$51.62 per barrel at week end, representing a weekly loss of 1.53 per cent.

This came as rising concerns of oversupply concerns eroded efforts to rebalance the market.

Gold rose to a two-month high in the week under review, following rise in demand created by geopolitical tension between the US and North Korea. The price of the yellow metal thus stood at US$1,293.39 per ounce.

Cocoa recorded a weekly depreciation of 0.55 per cent on investors’ worry over copious supply from Ivory Coast due to favourable climatic conditions hence resulting into bargaining power of buyers.

The soft crop traded at US$1,983 per metric tonne on August 11.

In spite of efforts tailored at cutting down production to influence price uptick of coffee, the value of the soft crop was affected in the week’s trading on issues of quality as there were reports of pesticide infestation from top grower – Brazil.

Coffee thus recorded a weekly loss of 1 cent to trade at US$1.39 per pound. — IGS Financial Services/GB