Graphic Business News

Cedi still on wobbly note

By: Graphic Business

THE cedi is still on the defensive against the three major trading currencies, confirming analysts’ expectations that the local currency will struggle to hold its own in the first quarter of the year.

At the close of trading on January 26, the cedi lost value to the dollar, the euro and the pounds sterling.

Against the pound, the cedi pressurised depreciated by 2.08 per cent to trade at GH¢6.27 per pound.

The year-to-date depreciation of the cedi against the pound thus stood at 4.97 per cent on January 26.

The 19-bloc currency also sustained a weekly gain on the international currency market despite the dovish minutes from the Central European.

The local currency lost 1.41 per cent to trade at GH¢5.49 per euro, representing a year-to-date depreciation of 3.72 per cent.

The US dollar was plunged into its lowest since May 2017 by denting comments by top US official. The local currency thus tumbled by 0.05 per cent to trade at GH¢4.43 per dollar, reflecting a year-to-date depreciation of 0.19 per cent.

Treasury securities
The yield on the 91-Day T-Bill increased marginally by three basis points to settle at 13.35 per cent whereas the rate-of-return on the 182-Day T-Bill rose by nine basis points to settle at 13.91 per cent.

All other treasury securities, however, maintained their respective yields.

At the close of the week’s auction, the Government of Ghana accepted the GH¢590.37 million bids tendered by investors.

The accepted bids were, however, below government’s target of GH¢764 million with most of the purchased bids constituting the 91-Day T-Bill.

At the next auction, government is hopeful of raising GH¢887 million from the sale of the short-dated treasury securities and GH¢200.00 million from the sale of the 1-year note. Presented below is the yield curve of the Government of Ghana Treasury securities.

Stock market
The Ghana Stock Exchange (GSE) continued to be supported by improve market sentiment, following the significant out-turn of the market in 2017 amid improving macroeconomic indicators.

The Accra exchange steeped up its bullish run in the week under review as demand continues to pile up for financial and energy sector stocks.

The Composite Index up-ticked by 5.77 per cent to settle at an index level of 3,036.41 points, corresponding to a year-to-date return of 17.70 per cent.

The Financial Stock Index also increased by 7.24 per cent to an index level of 2,795.53 points, representing a year-to-date return of 20.99 per cent.

Total trade
The week’s trading session ended with 23 equities recording a total traded volume of 2.28 million shares valued at GH¢16.56 million.

This represents 31.03 per cent increments over previous week’s total traded volume.

GCB Bank Ltd led the activity chart as it accounted for 25.51 per cent of the week’s total traded volume. Market capitalisation also rose by 1.73 per cent to settle at GH¢62.3 billion.

Stock market
A total of 16 equities saw price changes on the Accra exchange in the week under review.

Standard Chartered Bank Ltd made a whopping GH¢3.40 gains to top the advancers.

It traded at GH¢30 per share in January. Ecobank Ghana Ltd added GH¢1 to trade at GH¢10.01 per share.

Unilever Ghana Ltd and GCB Bank Ltd rose by 43 pesewas and 40 pesewas to close at GH¢13.56 and GH¢7.50 per share respectively.

Ghana Oil Company Ltd and Enterprise Group Ltd also upturned by 30 pesewas and 29 pesewas to settle at GH¢3.53 and GH¢4.50 per share.

Societe Generale Ghana Ltd, SIC Ltd, Access Bank Ghana Ltd and the Trust Bank (Gambia) Ltd were some of the financial sector stocks that recorded gains.

Other advancers were Benso Oil Palm Plantation Ltd and Starwin Products Ltd.

On the down side of the market, CAL Bank Ltd trimmed three pesewas to trade at GH¢1.17 per share. HFC Bank Ltd and Fan Milk Ltd also shed a pesewa each to close at GH¢1.29 and GH¢17.69 per share respectively.

At the close of the week’s trading on the international commodities market, brent crude oil advanced as cheap dollar buoyed demand for the energy commodity amid the ongoing market tightening.

This coupled with the ongoing supply cut, helped the energy commodity to trade above a four-year high of US$70.48 per barrel on January 26.

Gold rose to its highest value since August 2016 as the soft dollar spark demand pressure for the safe-haven commodity. The weak dollar preference by Trump’s administration hampered the dollar against rivaling currencies. Gold thus added US$19.30 to close at US$1,352.40 per ounce.

Cocoa sustained its recovery as the dry harmattan season helped to lower the rate of stockpile of the soft crop in top grower – Ivory Coast.

Cocoa also gained support from the dollar’s weakness, adding US$61.50 to close the weak at US$1,989.50 per metric tonne.

Coffee also closed higher, following demand pressure sparked by the weak dollar and supply interruptions in top grower –Vietnam. Coffee traded four cents higher at US$1.25 per pound. –IGS Financial Services/GB