Strong q1 earnings boost GSE’s performance
The equity market whipsawed two weeks’ consecutive declines, as market sentiments improved on the back of impressive first quarter earnings of some listed companies that trickled in during the week under review.
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At the close of market activities, the GSE Composite Index bounced back by 0.88 per cent to settle at an index level of 1,934.12 points.
This represented a year-to-date return of 14.51 per cent.
The Financial Stock Index also recovered by 0.65 per cent to settle at 1,797.08 points, representing a year-to-date return of 16.29 per cent.
Volume of trade
Trading activities were much exciting than observed in the previous trading week both in terms of volume and value.
At the close of business on June 15, 26 equities traded a total volume of 2.5 million shares valued at GH¢7.50 million.
The total traded volume was about 300 per cent higher than previous week’s trade.
Guinness Ghana Brewery Ltd, GCB Bank Ltd and Ecobank Ghana Ltd dominated trading activates. They accounted for 62.18 per cent of the week’s total traded volume.
Market capitalisation also ticked up by 0.16 per cent to settle at GH¢ 58,86 billion.
Price movements were observed in 10 equities; seven advancers and three laggards.
Standard Charted Bank recorded a whooping gain of 49 pesewas to close at GH¢16.61 per share.
Access Bank Ghana Ltd recaptured all the 20 pesewas loss observed in the previous trading session to close at GH¢4 per share.
Benso Oil Palm Plantation also increased by 20 pesewas to trade at GH¢5 per share.
Fan Milk Ltd gained 13 pesewas to settle at GH¢11.7 per share. Other advancers were Ghana Oil Company Ltd, CAL Bank Ltd and Aluworks Ltd.
The downside of the market saw Ecobank Ghana Ltd trimming 12 pesewas to close at GH¢7.01 per share. Enterprise Group Ltd and Guinness Ghana Ltd also lost a pesewa each to close at GH¢2.39 and GH¢1.49 per share respectively.
Forex market
On the interbank currency market, the cedi depreciated against all the three major trading currencies.
The US dollar was supported by multiple macro-economic stimulus, which aided in its performance against major peers.
The cedi thus depreciated by 0.49 per cent in the week ending June 15 to trade at GH¢4.34 per dollar, with a year-to-date return of 3.38 per cent.
The British pound recorded a week-on-week appreciation of 0.99 per cent against the local currency despite its fragile nature on the international currency market.
At end of the week, the cedi was trading at GH¢5.56 per pound, with a year-to-date depreciation of 6.91 per cent.
The 19-bloc currency, the euro, was supported by upbeat economic data and political certainty.
The Euro thus closed with a weekly appreciation of 0.61 per cent against the local currency. The Cedi traded at GH¢4.86 per euro at a year-to-date depreciation of 9.59 per cent.
Short-dated securities
The yield on the Treasury securities trimmed further, with the exception of the 91-Day Treasury Bill Rate, which rose by 19bps to 12.10 per cent. The yield on the 182-day Treasury bill rate declined by 13bps to 13.16 per cent.
The 1-Year Treasury Note Rate also tumbled by 50bps to 15 per cent.
Out of the total GH¢898.18 million worth of bids tendered, the government accepted only GH¢792 million bids.
This was below its target of GH¢1.05 billion.
Purchases of the short-dated treasury securities alone accounted for 74.58 per cent of the total accepted bid.
The government expects to buy GH¢1.095 billion worth of the 91-day and 182-day Treasury securities at next week’s auction.
In spite of the rise in the rate of the 91-Day T-Bill, the yield curve sustained its regular pattern.
With the government keen on achieving lower interest to support business activities, rates on the government securities are expected to fall further but in a much uniformed manner to sustain the regular pattern of the yield curve.
Commodities
Oil prices declined further this week over concerns of growing inventories in the US, as investors perceived OPEC to be slow at eliminating the global glut.
OPEC’s report indicated a much slower decline of the commodity in the US; it only declined by 1.7 million per barrel against an expected decline of 2.8 million barrels per week.
This affected investor confidence leading to a significant loss of 89 cents to settle at US$47.26 per barrel last Friday.
Gold, in spite of its bullishness at the last trading session, was unable to recover from earlier losses.
A strong dollar negatively affected the price of the precious metal, causing it to lose US$15.13 to trade at US$1,256.27 per ounce on June 15.
Production boost in top-grower, Ivory Coast, from a week-long favourable climatic condition weighed on the price of the cocoa on the international market due to oversupply. This in turn affected the price of the soft crop to decline by US$35.50 to settle at US$1,984.50 per metric ton.
Coffee also registered a week-on-week loss of 1.82 per cent to settle at US$1.24 per pound.
– GB/IGS Financial Services Limited.