Crude oil steps up recovery as global economies begin to open

Crude oil steps up recovery as global economies begin to open

Brent crude oil stepped up its recovery on the international market in the week ending May 8, as global economies begin to open.

Crude oil prices crashed to an all-time low, following the COVID 19 pandemic which has hit the global economy, forcing major economies to shut down.

The re-opening of some economies, with plans to re-open others in the coming days, has however spurred a rise in demand of the energy commodity.

On the back of this, the inventory build-ups in the US, for instance, dropped by 11.9 million contributing to the marginal rise of the commodity. Brent crude oil thus added US$4.94 to trade at US$30.21 per barrel.

Gold ended the trading week in the gains as demand for the yellow metal continues to rise despite easing uncertainties in recent times after attempts to develop a vaccine for COVID 19.

The IGS Financial Services reports that the yellow metal’s rise was further spurred by cooling yields on US treasury securities which shifted demand towards the safe-haven asset. Gold thus added US$19.85 to trade at US$1,714.05 per ounce.

Cocoa trimmed its selling price on the international commodities market as the below-average rainfall patterns from the top grower – Ivory Coast sparked quality concerns of its beans production.

This negativity affected it's pricing, kissing US$33.00 to trade at US$2,399.00 per metric tonne.

Coffee upped its value on the global commodities market despite the report of rising supplies of the beans from Brazil due to improving climatic conditions. Coffee ended with a weekly gain of 7 cents to trade at US$1.11 per pound.

Currency market

Trading on the interbank currency market ended with the Ghana cedi appreciating against the British pound and Euro but lost marginally to the US dollar.

The US dollar recorded 0.03 percent appreciation versus the cedi at a selling price of GH¢5.61. The year-to-date depreciation of the cedi thus rose to 1.23 percent. 

The British Pound posted a week-on-week depreciation of 1.28 percent to trade at GH¢6.97 The year-to-date appreciation of the cedi thus widened to 5.01 percent.

The Euro also depreciated by 0.70 percent to trade at GH¢6.09 last Friday on the interbank currency market. The year-to-date appreciation of the cedi thus rose to 2.08 percent

Ghana Stock Exchange

The Ghana Stock Exchange extended its losses into the new month (May), as persistent bearish sentiments sparked intense selling pressure on the bourse.

Uncertainties associated with the prolonged COVID-19 pandemic and the negative signaling effect caused by the directive by the Bank of Ghana ordering Banks and Specialised Deposit-Taking Institutions (SDIs) to suspend dividend payments dragged the equity indices lower despite bullish earnings by some equities.

The GSE Composite Index thus declined by 2.79 percent to settle at an index level of 2,042.05 points, representing a year-to-date loss of 9.53 percent.

The GSE Financial Stocks Index also slipped by 1.70 percent to end the trading week at an index level of 1,874.05 points, corresponding to a year-to-date loss of 7.21 percent.

Market activity waned as compared to the previous week’s outturn. A total turnover of 24.26 million shares valued at GH¢15.32 million exchanged hands in the week under review.

This represents 11.49 percent reduction from the previous week's outturn in volume terms. MTN Ghana Ltd led the activity char, it accounted for 99.46 percent of the overall traded volume. 

Market capitalization also dipped by 1.10 percent to settle at GH¢54,591.93 million.

Stock price movements

At the pairing of the week’s opening and closing prices, no advancer was recorded. Total Petroleum Ghana Ltd led the pack of nine losers, as it trimmed 38 pesewas to settle at GH¢2.40 per share.

GCB Bank Ltd and Republic Bank (Ghana) Ltd followed suit with price declines of 12 pesewas and seven pesewas to close at GH¢4.38 and 50 pesewas per share, respectively.

Société Générale Ghana Ltd and Ecobank Ghana Ltd also slipped by six pesewas and five pesewas to close at 64 pesewas and GH¢7.45 per share respectively.

Other laggards were, Enterprise Group Ltd, CAL Bank Ltd, Ghana Oil Company Ltd, and MTN Ghana Ltd.

Treasury securities

Yields on GoG Treasury securities recorded mixed adjustment at the week's auction.

The yield on the 91-Day T-Bill rose by three basis point to settle at 13.95 percent, yields on the 182-Day and 364-Day T-Bills also saw a basis point rise to 14.02 percent and 16.75 percent respectively.

The 2-year Treasury note, however, dipped by 145 basis points to settle at 18.75 percent.  Yields on the other Government of Ghana treasury notes and bonds remained unchanged as they were not scheduled for week's auction.

Out of the GH¢849.82 million bids tendered at the auction, the Government accepted GH¢833.88 million.

This missed the week's target of GH¢991.000 million with the 91-Day T-Bill been the largest share of bids accepted by the Government.

The issuance of the 2-year Treasury Note to both domestic and foreign investors saw Government accepting all the GH¢668.76 million bids tendered by investors.

This brings total bids raised at the auction to GH¢1,502.64 million surpassing the GH¢623.40 million worth of bids raised at the previous auction.

At the upcoming auction, an amount of GH¢758.00 million is expected to be raised by the Government from the sale of the short-dated treasury securities.