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Yields continue to drop on benchmark instruments

Yields continue to drop on benchmark instruments

The impacts of last year’s commitments by the government to ease interest rates by restructuring its debt portfolio stretched into 2017, yielding to a continual lowering in the rates on short-term treasuries in the week under review.

Last Friday’s auction saw a decline of 50 basis points for the 91-Day treasury as it recorded a rate of return of 16.25 per cent. The 182-Day treasury also edged down to 17.88 per cent. The yield on the two-year note also softened to 21 per cent. Rates on other treasury securities, however, remained unchanged.

The government accepted GH¢2.08 billion worth of bids despite investors tendering in GH¢2.96 billion for auctioning. The accepted bid, however, exceeded the target of GH¢1.85 billion. The next auction is expected to raise GH¢1.04 billion worth of 91-day and 182-day treasury securities; and GH¢100 million from the one-year Treasury note.

Ghana Stock Exchange

The upward trajectory observed after the recent general election rolled into the first trading week of 2017 as improved investor sentiments characterised the market after the new-year’s holiday. With the indices consistently gaining in the week under review, the GSE-Composite Index buoyed up by 0.61 per cent to 1,699.42 points, corresponding to a year-to-date gain of 0.61 per cent.

The GSE-Financial Stock Index also edged up by 1.26 per cent to 1,564.82 points, representing a year-to-date gain of 1.26 per cent.

At the end of the week, a total of 4.34 million shares were recorded with a corresponding value of GH¢13.15 million. The traded volume increased by over 500 per cent when compared with the previous week’s figures.

Guinness Ghana Brewery Ltd was the most actively traded stock on the Accra bourse as it accounted for 54.50 per cent of the week’s volume.

The week’s trading saw 13 price movers with 10 gainers and three losers. Ecobank Ghana Ltd and Standard Chartered Bank Ltd closed trading at GH¢6.50 and GH¢12.30 per share after edging up their opening prices by 12Gp and 10Gp respectively.

Fan Milk Ltd and GCB Bank added 7Gp and 6Gp respectively to trade at GH¢11.20 and GH¢3.63 per share. Societe Generale Ltd and Total Petroleum Ltd also traded 4Gp higher at 66Gp and GH¢2.01 per share respectively.

Ghana Oil Company Ltd and CAL Bank Ltd also appreciated by 2Gp to trade at GH¢1.12 and 77Gp per share respectively. Aluworks Ltd and SIC Ltd closed a pesewa higher at 15Gp and 13Gp per share respectively.

On the flip side, Guniness Ghana Ltd lost 13Gp to trade lower at GH¢1.50 per share. Aryton Drug Manufacturing Ltd and PZ Cussons also shed 2Gp each to close at 10Gp and 0.20Gp per share respectively.

Impacts of last year’s commitments by the government yields a continual lowering in the rates on short-term treasuries

Currency market

The local currency lost to the dollar and the euro but traded flat against the Pound at the first week of 2017. The unexciting news of payroll data report coupled with inflation and unemployment data which preyed on the US economy was not strong enough to dampen the performance of the greenback as the 1.5 percentage point’s increment in December’s factory activities offered some support to the US economy.

The dollar ended up appreciating by 0.35 per cent to exchange at GH¢4.22 per the dollar.

The euro closed the week, appreciating by 1.54 per cent to settle at GH¢4.45 to the euro. 

Last week’s trading recorded volatile performance despite the cedi trading flat against the British Pound Sterling. The cedi settled at GH¢5.20 to the pound at the close of the week.

Commodities

Crude oil remained steady at the last trading day of the week under review although market players continued to weigh developments surrounding a landmark agreement between major oil producers to reduce crude output. Brent crude gained 0.49 per cent to close at US$57.10 per barrel amidst increased demand ahead of the weekend.

The fall in value of the greenback on the back drop of unexciting news of payroll data among others caused the yellow metal to rally to a four-week high. Gold edged up by 1.90 per cent to trade at a unit price of US$1,171.90 per ounce.

Cocoa rose marginally at week-end after farmers in top grower countries Cote d’ Ivoire and Ghana expressed concerns of low global prices, depressing demand from buyers in the early parts of the week. Cocoa closed the week’s trading at US$2,261 per tonne after gaining 6.35 per cent in last week.

Coffee also traded higher, gaining 4.23 per cent to settle at US$1.4285 per pound last week.

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