First 10-year domestic bond oversubscribed
The government issued its maiden 10-year domestic bond in an effort to ease interest rates and raise longer term funds to support capital expenditure.
Advertisement
The bond which was opened to both domestic and foreign investors was oversubscribed. Out of the GH¢726 million worth of bids tendered, the government accepted GH¢438 million (US$110 million) worth of bids above the estimated target of GH¢200 million (US$50 million).
The 10-year bond which is to mature in 2026 was auctioned at a rate of 19 per cent which fell within the government’s Initial Pricing Guidance (IPG) of 18 per cent to 19 per cent.
Inflationary pressures ease
The year-on-year consumer price inflation settled at 15.8 per cent in October 2016 after decelerating by 1.4 per cent from 17.2 per cent in September 2016.
According to the Ghana Statistical Service, the downturn in the headline inflation was as a result of lower service charges and food prices. The month-on-month change in the consumer price inflation for the month of October stood at 1.4 per cent as against a 0.2 per cent in September.
The non-food inflation declined to 19.4 per cent from the 21.6 per cent recorded in the previous month. Food inflation also edged down by 0.3 per cent to 8.7 per cent.
The current downturn in the headline inflation brings the government closer to achieving the International Monetary Fund (IMF) end of year inflation target of 13.5 per cent.
This development thus would provide some relief to the economy ahead of the central bank’s monetary policy meeting in this month
Ghana Stock Exchange
The equity market recorded marginal declines as bearish market sentiments induced by sluggish third quarter earnings report and upcoming presidential elections stalled trading activities.
The GSE-Composite Index slipped by1.57 per cent to close at 1,679.41 points, worsening its year-to-date losses to 15.82 per cent.
The GSE-Financial Stock Index also declined by 2.16 per cent to settle at 1,571.18 points, extending its year-to-date losses to18.59 per cent.
Market activities for the week ending November 11 saw a total volume of 1.43 million shares valued at GH¢427,222.22 exchange hands. The traded volume was, however, down by 17.87 per cent from its previous market volume.
Market capitalisation slipped by 0.29 per cent to settle at GH¢51,706.15 million. UT Bank Ltd maintained its dominance in terms of total volume of shares traded, with the financial stock accounting for 56.58 per cent of the overall traded volume on the market.
On price movements, two gainers and six decliners were recorded last week. Enterprise Ghana Ltd added 1Gp to close at GH¢2.39 per share. Fan Milk Ltd also gained 2Gp to close trading at GH¢9.83 per share.
On the downside of the market, Standard Chartered Bank shaved GH¢1.01 to trade at GH¢12.99 per share. Total Petroleum and Ghana Oil Company trimmed 4Gp and 7Gp respectively to settle at GH¢2 and GH¢1.10 per share.
Ecobank Ghana and Societe Generale also shed 5Gp and 3Gp to trade at GH¢6.80 and 67Gp per share respectively. Cal Bank Ltd lost 1Gp to conclude the list of decliners at 79Gp per share.
Currency market
On the currency market, the local currency recorded mixed outturns as investors reassessed the economic impact of Trump’s victory in the recent U.S presidential elections. The local currency, thus, depreciated by 0.03 against the greenback to pitch its year-to-date losses at4.49 per cent. The dollar traded at interbank mid-rate of GH¢3.97 at the close of the week under review.
The British Pound Sterling maintained its key resistance against a basket of currencies. The local currency lost 0.81 per cent against the Pound Sterling to extend its year-to-date gains to 10.85 per cent. The local currency traded at mid-rate of GH¢5 to the Pound.
The Euro lost its ground against the local currency as the local currency gained 2.17 per cent against the Euro. The local currency pitched its year-to-date depreciation at 4.35 per cent, ending the week’s trading at interbank mid-rate of GH¢ 4.31 to the Euro.
Commodities
The initial shock of the US presidential election news led to the commodity market recording mixed trading. Brent crude slipped by 2.24 per cent to trade at US$44.56 per barrel as the market refocused on the persistent fuel supply overhung and rising US domestic crude inventories.
Gold tumbled by 5.84 per cent to trade at US$1,227.15 per ounce, with Coffee edging down by 6.87 per cent to close at US$1.5957 per pound.
Cocoa continued its downward rally touching its lowest price in three years. Cocoa lost 4.26 per cent after remaining at a technically oversold level. Improving outlook in Cote d’Ivoire helped keep the market on the defensive.
Despite Cote d’Ivoire holding off on its 2017/18 cocoa sale to prop up prices, the soft-crop lost its momentum at the trading on November 11 to close at US$2,471 per tonne.