Accra Bourse Starts New Year on Positive Note

Accra Bourse Starts New Year on Positive Note

The Ghana Stock Exchange started the new year on a positive note as it extended its strong recovery witnessed in the last month of 2020.

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The significant rebound which led to a 28 percent reduction in the year-to-date losses of the benchmark index in 2020 hung upon recovery in business and economic sentiments.

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The GSE Composite Index, thus, finished with a year-to-date gain of 0.73 percent as it settled at 1,955.78 points. The GSE Financial Composite Index, similarly, rose by 0.25 percent as it settled at 1,787.20 points. 

three                                                                      GSE Market Indicators

A total of 30.22 million shares valued at GH¢70.21 million exchanged hands. This represents 132. Percent increment from the previous week’s trades of 30.22 million valued at GH¢13.60 million. MTN Ghana Ltd was the most actively traded stocks, accounting for 132.33 percent of the total traded volume. Market capitalization also posted a weekly gain of 0.32 percent as it ended the week’s trade at GH¢54,549.91 million.

 Stock price movements

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At the paring of the week’s closing prices to the 2021’s opening prices, two equities altered their share prices; with no laggard recorded.

Standard Chartered Bank Ltd. led the gainers with a price uplift of 19 pesewas to trade at GH¢16.50 per share. MTN Ghana Ltd also added a pesewa to trade at 65 pesewas per share.

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Treasury securities

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Interest rates on the Government of Ghana treasury securities eased marginally at the week’s auction. The yield on the 91-Day T-Bill dipped by a basis point to settle at 14.09 percent; that of the 182-Day T-Bill also moderated by 14.14 basis points to close at 14.14 percent.

The yield on the 364-Day T-Bill was, however, unchanged at 16.96 percent as it was not scheduled for the week’s auction. Yields on the Government Bonds and Notes were also unaltered. 

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All the GH¢1,073.47 million worth of bids tendered by investors at the week’s auction were all accepted by the Government of Ghana. The amount raised outpaced the GH¢987.00 million targeted for the week’s auction and the GH¢739.10 million raised at the previous auction.

The 91-Day T-Bill dominated Government’s purchase, constituting 88.62 percent of the total bids raised. It is in the expectation of Government to raise GH¢756.00 million worth of bids at the upcoming auction through the issuance of both 91-Day, 182-Day, and 364-Day T-Bills at the upcoming auction.

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Currency Market

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The Ghana cedi outmuscled both the British pound and Euro but lost to the US dollar. The US dollar dropped to its lowest in three years following post-election uncertainties which affected investors bet for the currency. 

Among such developments were impeachment on President Trump after a second time indicating that the US election was fraud and anticipated nature of US governance system after the Democrats won effective control of the Senate.

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Despite the US dollar outturn, it recorded a week-on-week gain of 0.01 percent with a selling price of GH¢5.76 on the interbank currency market.

The British pound dimmed its appeal on the international forex market as the second wave of the COVID-19 pandemic casted doubt about recovery of the UK economy. Soaring COVID-19 cases in the UK, instigating another round of lockdowns have further darkened already dim growth prospects. This is expected to underpin next monetary policy review of the Bank of England to push interest rates below zero to support the economy. The British pound thus recorded a week-on-week depreciation of 0.76 percent as it trimmed its selling price to GH¢7.82 on the interbank currency market.

The Euro finished the trading week in the gains despite some disappointing data from the bloc. The Euro benefitted from the dollar’s and pound’s weakness on the international currency market, as investors ignored contractionary services data from Germany and the Eurozone with PMI’s below the 50-point benchmark, to demand more of the shared currency. The Euro also benefitted from surprised uplift in Eurozone’s retails’ sales, as in, rose nearly by 2 percent in November 2020 compared to a contraction of 2 percent in October 2020. Despite the Euro gains, it ended with a weekly depreciation of 0.22 percent as it buoyed its selling price to GH¢7.05 on Friday on the local currency market.

Commodities

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Brent crude oil posted a weekly gain following the decline in global crude inventory and supply cut decision by the Saudi Arabia to contribute to the elimination of the glut in the market. The announcement by the Saudi Arabia Government to cut output by 1 million barrels a day in February and March was welcomed by the market hence contributing to the commodities gain. Brent crude oil thus added $3.50 to trade at $55.3 per barrel.

Gold traded below its year opening price of $1,895.10 per ounce following political development in the US which saw Democrats securing majority in the house of Senate. This paved the way for President-elect Joe Biden to implement more fiscal relief measures which will affect demand for the yellow metal. Gold thus shed $9.60 to trade at $1,885.50 per ounce.

Cocoa registered a week-on-week decline weighed by supply glut concerns on the international commodities market as Ivory Coast continue to record bumper harvest. This coupled with recent stricter lockdowns are expected to create imbalances in the market to demand. Coffee thus eased by $64.00 to trade at $2,539.00 per metric tonne.

Coffee fell to a 2-week low following excess supply of the soft crop onto the global commodities market amidst the general weakness in the Brazilian Real. Data on coffee supply in the months of October and November saw an annual increment of 6.5 percent to 20.2 million bags to affect the performance of Coffee. Coffee dropped by 8 cents to trade at $1.21 per pound.

-IGS Financial Services

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