GSE Accelerates Bullish Run In April

GSE Accelerates Bullish Run In April

The Ghana Stock Exchange market since the beginning of the year has been recording some impressive performances and the month of April was not an exception.

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The local bourse ended the first quarter of the year bullish, as series of upbeat earnings report buoyed risk taking sentiment on the exchange.
Ecobank Ghana Ltd grew its profit after tax by about 33.63 percent, from a previous value of GH¢128.04 million to GH¢171.10 million. Access Bank Ltd. also saw its profit-after-tax rising from GH¢68.18 million to GH¢74.94 million which resulted in a surge in earnings per share from 39 pesewas to 43 pesewas.

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With similar upbeat performances, the GSE Benchmark jumped by 9.28 per cent to settle at 2,561.45 points, corresponding to a year-to-date return of 31.93 percent. The GSE Financial Stocks Index, also rose by 0.70 percent to close the last week of April at 1,840.99 points, reflecting a year-to-date gain of 5.29 percent.

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Market activities also improved over the previous week’s outturn. A total of 4.15 million shares valued at GH¢10.22 million exchanged hands, as compared to the 3.64 million shares valued at GH¢3.13 million.
Unilever Ghana Ltd. and MTN Ghana Ltd. were the most actively traded stock as they jointly accounted for 88.30 percent share of the overall traded volume. Market capitalization also improved by 3.98 percent to GHS60,801.73 million at the closure of the week.

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STOCK PRICE MOVEMENTS

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In all, a total of seven (7) equities altered their share prices with six (6) advancers and a laggard. GCB Bank Ltd. occupied the top of the advancers’ list with a price gain of 25 pesewas to settle at GH¢4.75 per share.
MTN Ghana Ltd. keenly followed with 18 pesewas appreciation to trade at GH¢1.14 per share. Fan Milk Ltd. and Total Petroleum Ltd. followed with price appreciations of 7 pesewas and 5 pesewas to trade at GH¢1.22 and GH¢3.25 per share, respectively.

Enterprise Group Ltd. and Societe Generale Ghana Ltd. also appeared on the advancers’ list with a pesewa gain each to trade at GH¢1.49 and 18 pesewas per share, respectively.
On the downside, Unilever Ghana Ltd. had its share price falling further by 39 pesewas to settle at GH¢3.60 per share.

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TREASURY SECURITIES

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The yield on the 91-Day T-Bill rose by 6 basis points to 12.84 per cent at the end of April. Interest rate on the 182-Day T-Bill however, moderated by 4 basis points to 13.53 percent. The yield on the 182-Day T-Bill was unchanged at 16.53 percent. Yields on the Government of Ghana Notes and Bonds also remained unchanged as they were not part of the week’s issuance.

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Government accepted all the GH¢573.22 million bids tendered by investors. This fell below the week’s target of GH¢673.00 million with the 91-Day T-Bill dominating by 72.69 percent.
Target for the upcoming auction is pegged at GH¢1,142.00 million through the sale of the 91-Day and 182-Day T-Bills.
Following the release of the issuance calendar for the 2nd quarter of 2020, both ends of the yield curve is anticipated to moderate. The moderation of the 5-Year and 7-Year Bonds should be moderate to keep the general uptrend nature of the yield curve. A yield relatively higher than the 3-Year Note, is expected to largely contribute to the success of lengthening the maturity profile of the public debt. This will serve as an incentive for the attraction of investors into committing funds that can aid the long-term developmental plans of the Government.

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GOVERNMENT TO RAISE GH¢21.43 BILLION IN Q2

The Government of Ghana seeks to raise a total of GH¢21.43 billion through the issuance of varied treasury securities ranging from 91-Days to 7-Years.
This is in line with the Net Domestic Financing, Government’s liability management programme and the objective by the Government in lengthening the maturity profile of the public debt. A total of GH¢8.42 billion is targeted for the month of April, GH¢7.08 billion for May and the remaining GH¢5.93 billion in June 2021. The issuance of the 91-Day T-Bill dominates, constituting about 52.73 percent (GH¢11.30 billion) of the targeted value for the quarter. An amount of GH¢5.56 million is also expected to be raised from the issuance of the 182-Day T-Bill and GH¢1.57 billion from the sale of 364-Day T-Bills.
The value of Bonds for the quarter is tipped at GH¢3.00 billion with two-third coming from the sale of the 5-Year Bond. There will be no fresh issuance of Government Notes for the quarter under review.

CURRENCY MARKET

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On the interbank currency market, the Ghana cedi depreciated against the US dollar but advanced against the British pound and the Euro in the last week of April.

The US dollar dimmed its shine on the international currency as it dropped to its lowest in nine-weeks on account of the dovish policy stance of the US Federal Reserve. The decision by the Fed to still adhere to keeping all stimulus support on hold until inflation and other growth factors align to the Bank’s target sparked the selloffs of the greenback.
Despite the US dollar’s outturn on the international currency market, it appreciated marginally by 0.02 percent against the cedi at a selling price of GH¢5.74. The year-to-date appreciation of the cedi thus trimmed to 0.49 percent.

The British pound finished the week’s trade on a positive note on the international forex market following growing evidence of economic recovery in the UK. Improved retail sales data for March from 2.5 percent to 5.4 percent in March, the 0.7 percent rise in inflation readings in March and other bullish

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readings from the production sectors of the economy coupled with dwindling unemployment rate are factors underpinning the economic recovery in the UK. But on the interbank currency market, the British Pound posted a week-on-week depreciation of 0.18 percent as demand for the currency relatively dipped in the week’s trade at selling price of GH¢7.93. The year-to-date depreciation of the cedi thus reduced to 0.60 percent.

The Euro stepped up its gains on the international currency market on the back of growing economic recovery prospects in the Eurozone. Eurozone economic sentiment came in more-than-expected as it rose to 110.3 points in April. This outpaced the 100.9 points readings for March and target of 102.2 points.
Other upbeat developments were Germany’s consumer price inflation for April which rose by 2.1 percent in April up from the 2.0 percent readings in March 2021, and the significant deployment of coronavirus vaccines to restore normal economic lives in the bloc. In spite of this, the Euro traded lower at GH¢6.90 against the local currency, representing a week-on-week depreciation of 0.30 percent. The year-to-date appreciation of the cedi thus rose to 2.44 percent.

COMMODITY MARKET

Brent crude oil gained following investors anticipation of bright demand outlook. The demand side of the energy commodity improved on account of consumption raise for the rest of 2021 as major economies fully reopens for business activities. Brent crude oil thus gained $5 to trade at $66.66 per barrel.

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Gold ended in the red as downbeat economic data from China affected the demand of the yellow metal. Investors grew worried about the slow pace of growth in the Asian region – especially China following low readings of its key sectors of the economy. The PMI for the Manufacturing sector missed a target of 51.7 points to 51.1 points.
That of the non-manufacturing sector performed lower in April to 54.9 points from a previous rate of 56.3 points with similar readings from the Services sector to affect investors anticipation of economic recovery from the second largest economy. Gold thus shed $8.40 to close at $1,768.60 per ounce.

Coffee posted gains despite a stable production outlook projection by the Colombian Federation of Coffee Growers which affected the price of the soft crop in the early part of the week’s trade. The positive closure of the beans was on the back of speculative trading activities. Coffee thus gained 5 cents to trade at $1.42 per pound.

Cocoa went down despite hawkish expectation of chocolate demand by top producers. Hershey, and Barry Callebaut offered bullish expectation of chocolate consumption for the rest of 2021 on the back of the global economic recovery from the COVID-19 pandemic. Gains were however, truncated on account of uncontrollable supply of the beans from Ivory Coast. Cocoa thus shed $27.50 to trade at $2,382.50 per metric tonne.

 

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