GSE suffers from own sanctions
Downside risk from recent regulatory issues took a toll on the overall performance of the Ghana Stock Exchange (GSE) last week, as investors digested the implications of the regulatory issues on their investment holdings.
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The week’s trading sessions ended with the two indices losing points to close with lower year-to-date changes.
The benchmark index, GSE-Composite Index declining by 0.61 per cent to 2,374.45 points, brings its year-to-date performance to 40.58 per cent.
The Financial Stock Index also shed 3.94 per cent to close at 2,114.69 points, following significant declines in two top-weighted financial stocks.
The year-to-date performance of the GSE-FSI stood at 36.84 per cent.
Total trade
Trading activities on the market ended with investors exchanging 1.83 million shares valued at GH¢8.55 million.
The week’s trade was 34.05 per cent lower than the previous week’s trade.
Liquidity on the GSE was mainly driven by Fan Milk Ltd, Total Petroleum and Societe General Ghana Ltd; the two accounted for 55.63 per cent of total traded volume.
In value terms, Fan Milk Ltd accounted for 66.55 per cent of the total value traded.
Total market capitalisation settled at GH¢58.4 billion, showing 0.53 increase from the previous week.
Price movements
On price movements, the equity market recorded seven gainers and two decliners.
Fan Milk Ltd gained GH¢2 to close at GH¢20 per share. Unilever Ghana Ltd also added GH¢1.31 to trade at GH¢10.42 per share.
Benso Oil Palm Plantation Ltd increased by 10 pesewas to close at GH¢5.42 per share.
Enterprise Group Ltd appreciated by 27 pesewas to settle at GH¢5.32 per share while Ecobank Transnational Incorporation gained two pesewas to close at 16 pesewas per share.
HFC Bank Ltd and the Trust Bank Gambia Ltd gained 12 pesewas and six pesewas respectively to close at GH¢1.32 and 35 pesewas per share to complete the list of gainers.
On the downside, GCB Bank Limited trimmed six pesewas to close at GH¢4.50 while Standard Chartered Bank Ltd shed GH¢3.60 to close at GH¢23.00 per share.
Treasury securities
The 91-Day T-Bill rate eased by a basis point to settle at 13.19 per cent whereas the rate on the 182-Day T-Bill increased by seven basis points to 14.14 basis points.
The rate of return on the 2-Year Note was, however, unchanged after the week’s auctions. All other treasury securities maintained their respective rates.
Out of the GH¢561.3 million bids tendered, the government was able to accept a total of GH¢535.08 million, which is much lower than the GH¢858 million anticipated for the auctions.
The government, however, expects to raise GH¢795.00 million through the sale of the 91-Day and 182-Day T-Bills, and GH¢200 million for the sale of 1-year fixed note at the next auction.
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Currency market
On the interbank forex market, the local currency depreciated against the three major traded currencies.
The dollar lost steam, following geopolitical tensions and unrelenting pullback in treasury yields on the backdrop of dovish comments from the Federal Reserve policymakers, which rekindled doubts over the central bank’s monetary policy stance.
The Dollar, however, came in slightly strong on the local currency market amid a rise in demand.
The cedi lost 0.07 per cent to exchange at GH¢4.4 increasing the year-to-date depreciation of the cedi to 4.82 per cent.
The 19-bloc currency enjoyed much stability against its peers on the international market as the European Central Bank President, Mario Draghi, lifted investors’ hopes for an improved Euro area growth for this year.
It, thus, appreciated by 1.42 per cent against the local currency to close at GH¢5.3, pushing the year-to-date depreciation of the cedi to 19.37 per cent.
In spite of the UK’s current account deficit falling to a record low of 4.4 per cent of GDP, the Pound Sterling rose to a fresh five-week high against a basket of currencies as marginal increase in the UK’s construction sector and projected growth of 2.2 per cent in 2018 improved business sentiments and capital inflows.
The Pound Sterling thus gained 2.5 per cent against the cedi to exchange at GH¢5.81. This raised its year-to-date depreciation of the local currency to11.73 per cent.
Commodities
In spite of tumbling on Friday’s trading on falling oil rig counts due to hurricane Irma and Harvey in the United States (US), the Brent crude oil managed to gain 1.86 per cent to trade at US$53.73 per barrel.
Gold held near its highest in more than a year to close the week at US$1,330.40 as weak economic data lowered expectations of a December interest rate rise in the United States.
The yellow metal gained 1.62 per cent as demand for safe haven investment increased.
Cocoa, on the other hand shed 2.72 per cent to close at US$1,933 per metric ton, following huge crops outlay in top producers, Côte d'Ivoire and Ghana this season.
The price of the soft-crop is expected to rebound.
Coffee gained 2.27 per cent to close the week at US$1.3065 per pound buoyed by weaker US dollar.
Prospect of an early and large crop from Vietnam helped sustain the price of the soft crop.
Credit: IGS Financial Services/GB
