Equity market post mixed results

Equity market indices posted mixed performances, with the index for the financial sector weighed on by speculative actions, profit talking and heightened uncertainties ahead of the deadline for the new minimum capital requirements for banks.

The benchmark index, on the other hand, surged on the back of the price advancement in the heavy capitalised telecommunication stock.

At the closing bell last week, the Ghana Stock Exchange (GSE) composite index rose by 0.17 per cent to an index level of 2,875.81 points, corresponding to a year-to-date return of 11.48 per cent.

The GSE financial stocks index, however, declined by 1.29 per cent to settle at 2,627.72 points, representing a year-to-date return of 13.73 per cent.

Last week’s trading realised a total traded volume of 21.86 million valued at GH¢46.92 million.

This was a significant improvement over the previous week’s trade which only recorded 7.10 million shares worth GH¢7.40 million.

The Ghana Oil Company was the highest contributor to liquidity after accounting for 81.80 per cent of the total traded volume.

The market capitalisation also increased by 0.38 per cent to end the week’s trades at GH¢65,032.05 million.

Stock price movements

A total of 13 equities altered their week opening prices with three gainers and 10 laggards.

On the bulls list, MTN Ghana Ltd came first with three pesewas gain to end the week under review at GH¢0.78p per share.

Ecobank Transnational Incorporated Ltd and Ayrton Drug Manufacturing Ltd followed with a pesewa uplift to close at 21 pesewas and eight pesewas per shares, respectively.

Ecobank Ghana Ltd was at the bottom of the bears, losing 37 pesewas of its week opening price to close at GH¢8.13 per share.

Ghana Oil Company Ltd and CAL Bank Ltd went down by 32 pesewas and 12 pesewas to end the week’s trade at GH¢2.60 and GH¢1.18 per share, respectively. Fan Milk Ltd and Guinness Ghana Brewery Ltd shed five pesewas and three pesewas to settle at GH¢13.35 and GH¢2.38 per share respectively.

Societe Generale Ghana Ltd and SIC Ltd declined by two pesewas each to trade at GH¢1.04 and 20 pesewas per share respectively. Other laggards were the Republic Bank (Ghana) Ltd, PZ Cussons Ltd and PBC Ltd.

Treasury securities

The week’s auction ended with the interest rate on the 91-Day T-Bill rising marginally by a basis point to 13.37 per cent.

The yield on the 182-Day T-Bill also increased by 26 basis points to 14.19 per cent. Interest rate on the 1-Year Note also surged by 50 basis points to settle at 15 per cent. All other Treasury securities, however, had their interest rates unchanged.

At the end of the auction, the Government of Ghana raised a total amount of GH¢515.24 million from the GH¢565.24 bids tendered. The week’s target of GH¢562.00 million was missed, with the 91-Day T-Bill accounting for 85.50 per cent of the total bids accepted.

The yield curve sustained normality despite the distortion at the tail end of the curve. Interest rate is expected to reverse its recent downtrend largely on the back of multiple factors among which are forex risk volatility, inflationary risk and constructional policy intended to be pursued by the government through the open market operations.

Currency Market

The Ghana cedi lost against all the three major trading currencies in spite of the recent supply boost initiative adopted by the Government of Ghana to halt further depreciation of the cedi.

The US dollar dropped to a two-week low on the international currency market as multiple factors ranging from weak economic data to policy initiatives in emerging economies weighed on the value of the greenback.

In spite of the greenback’s loss, it outperformed the local currency. The Ghana cedi thus recorded a week-on-week loss of 0.17 per cent to trade at GH¢4.76 per dollar, representing a year-to-date depreciation of 7.81 per cent.

Commodities

Brent crude oil closed the trading week in the gain despite recording a sharp decline at the mid-week trading session after dovish report by the International Energy Agency.

The report of the unprecedented rise in the supply of the energy commodity onto the commodities market in the month of August and the subsequent warning of demand cut of the commodity resulted in the sharp decline witnessed on Wednesday.

The recovery was ascribed to bullish expectation for the latest gauge reading of the US production which is anticipated to drop in comparison with previous readings. Brent crude oil thus added $1.96 to close at $78.79 per barrel.

Gold posted a marginal gain in spite of the dollar’s weakness on the international currency market.

Investors’ high anticipation for another rate hike consideration by the US Federal Reserve due to past upbeat economic readings scaled down gains for the safe haven commodity as investors engulfed in some level of risk taking.

The yellow metal thus advanced by only $9.40 to close at $1,203.00 per ounce.

Cocoa trimmed losses on the international commodities market as fear of black pod disease in Cote d’Ivoire affected supply of quality beans onto the international commodities market.

Cocoa which for the past weeks has been on the downside due to rising production underpinned by good rainfall reduced losses as the fear of an outbreak of a black pod disease affected market activities. Cocoa ended the week down by $48.00 to settle at $2,218.00 per metric tonne.

Source: ghanaweb.com