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Cedi loses ground against US dollar, 2 others

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The Ghana Cedi depreciated against all the three major trading currencies on the interbank currency market last week.

According to data from IGS Financial Services, the US dollar posted a marginal gain as US-China trade tension fuelled investor’s demand for the safe haven currency.

The US dollar made a weekly gain of 0.05 per cent to trade at GH¢5.62 on the interbank currency market. The year-to-date depreciation of the cedi thus rose to 1.45 per cent.

The British Pound recovered from a seven-year low against major trading peers buoyed by improving risk sentiments. The Pound’s surge was driven by emerging reports of a successful COVID-19 vaccine trial by Moderna Inc and the reopening of some global economies which boosted investor’s risk appetite.

The British Pound thus appreciated by 0.59 per cent to sell at GH¢6.85 on the interbank currency market. The year-to-date appreciation of cedi thus eased to 6.50 per cent.
The Euro firmed on account of the release of upbeat economic data and proposals of a euro-recovery fund. In the week under review, plans to set-up a 500-euro Franco-German recovery fund aimed at providing financial assistance to member states on the bloc, as well as critical sectors in the economy affected by the pandemic improved investor’s confidence.

The Euro thus benefited from these developments as it appreciated by 0.76 per cent to trade at GH¢6.12. The year-to-date appreciation of the cedi thus declined to 1.54 per cent.

Ghana Stock Exchange
The Accra Bourse equity indices posted mixed outturn after last week’s trading activities. The significant sell-off in some financial stocks vis-à-vis the recoveries in some non-financial stock as investors reacted to the dividend suspension by the central bank in a bid to protect financial institutions resulted in the week’s mixed performance.

The GSE Composite Index thus made a weekly gain of 1.42 per cent to settle at 2,011.97 points, representing a reduced year-to-date loss of 10.86 per cent.

The GSE Financial Stocks Index, however, recorded a week-on-week decline of 0.02 per cent as it settled at 1,840.80 points corresponding to a year-to-date loss of 8.86 per cent.

Market outturn was much lower than recorded at the previous week’s auction. A total of 1.20 million shares valued at GH¢3.24 million exchanged hands as compared to the 11.75 million shares worth GH¢8.16 million which traded at the previous week’s auction.

CAL Bank Ltd led the activity chart with 37.01 per cent share of the overall traded volume. Market capitalisation, however, upped by 0.54 per cent to settle at GH¢54,279.82 million.

Stock price movements

On price movers, a total of nine equities altered their week opening prices out of which two stocks recorded gains. Benso Oil Palm Plantation Ltd topped the bulls list with price uplift of 45 pesewas to trade at GH¢7.45 per share. Mechanical Lloyd Company Ltd also surged by three pesewas to close at 61 pesewas per share Cocoa Processing Company Ltd posted the worst decline after losing 61 pesewas of the week’s opening prices to settle at GH¢3.39 per share.

SIC Ltd and Clydestone (Ghana) Ltd tumbled by 50 pesewas and 13 pesewas to trade at GH¢17 and GH¢1.49 per share, respectively. Enterprise Group Ltd and Daspharma Ltd had their share prices trimmed by seven pesewas and two pesewas to end the week’s trade at 70 pesewas and GH¢4.48 per share, respectively.

Republic Bank Ghana Ltd and Fan Milk Ltd also fell by a pesewa each to trade at 49 pesewas and GH¢1.59 per share, respectively.

Treasury securities

Last Friday, interest rates were upwardly adjusted with the yield on the 91-Day T-Bill rising by 19 basis points to settle at 14.06 per cent. Yield on the 182-Day T-Bill also rose by five basis points to settle at 14.05 per cent.

Interest rates on the 364-Day T-Bill and those on the Government of Ghana treasury notes and bonds were, however, unchanged as they were not scheduled for the week’s auction.

Total bids tendered by investors at the week’s auction stood at GH¢1,061.22 million, and the government accepted all bids.

This exceeded both the week’s target of GH¢909.00 million and the GH¢652.94 million worth of bids purchased by the government at the previous auction.

The 91-Day T-Bill was the most bids accepted at the auction, constituting 78.74 per cent of the total bids accepted by the government. Government anticipates raising GH¢1,124 million worth of bids at the upcoming auction.

Commodities

Brent crude oil climbed further as global demand creeped back on account of a gradual surge in airlines and transportation movements.

Brent crude oil’s gains also stemmed from production tightening resulting from the lack of storage facilities and decision by OPEC to lower daily production by about 9.7 billion barrels. Brent crude oil thus added US$2.33 to trade at US$34.83 per barrel.

Gold dimmed its safe-haven appeal in the week’s trade following hawkish sentiment from the US Fed about the pace of recovery of US economy and projected benefit of its supportive programmes to businesses and households. With investors risk sentiment surging, Gold trimmed US$22.40 to trade at US$1,733.90 per ounce.

Cocoa suffered another round of weekly loss on the international commodities market on unfavourable climatic conditions which triggered concerns over the quality and size of the crop in top grower — Cote d’Ivoire. Cocoa thus lost US$51.50 to trade at US$2,347.50 per metric tonne.

Coffee tumbled on investors’ continued assessment of the bright outlook of soft crop in Brazil and demand distraction resulting from the global pandemic. Coffee, thus shed a cent to trade at US$1.04 per pound.

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