Four gains end four-week slide

Trading activity on the stock market closed the week ending September 5 on a bullish note, with gains in four equities leading to the indices halting their four-week slide.

The benchmark Composite Index (CI), on the back of the strong investor demand, defied five laggards to climb 17.07 points to 2,217.25. This brought the year-to-date return on the CI to 3.36 per cent.

The Financial Stocks Index (FSI) also added 19.62 points to 2,133.37. This brings its year-to-date return to 19.41 per cent. 

Movements this week

Ghana Commercial Bank was the biggest gainer, climbing 21Gp to close the week at GH¢4.71. Guinness Ghana also edged up by 10Gp to end the week GH¢2.60, while Ecobank Transnational Incorporated and CAL Bank inched up a pesewa each to 34Gp and 89Gp, respectively.

On the other hand, Fan Milk was in the red, dropping 4Gp to GH¢4.96. Three equities trimmed 2Gp each. 

Ecobank Ghana slipped to GH¢7.05; UT Bank backtracked to 32Gp, while Societe Generale eased to 95Gp. Starwin completed the list, sliding to 3Gp from 4Gp.

Trading activity

In all, a total of 2.67 million shares valued at GH¢4.52 million in 22 equities exchanged hands.

Outlook

The increasing demand in recent days could indicate a likely halt to the selling pressure on stocks observed in the last few months. 

In this regard, Merban Stockbrokers Research expects bids for stocks such as Ecobank Ghana, GCB, BOPP and ETI leading to the market sustaining its recovery. 

Fan Milk, UT Bank and HFC Bank may, however, head southwards on the back of outstanding offers.

Money market

The 91-day bill extended its northward drive at the auction held on August 29, as some dealers sought higher rates for their investments.  The 182-day bill, however, slipped while the one-year and two-year notes remained unchanged. 

The 91-day bill added four basis points to close at 25.06 per cent. The 182-Day bill, however, trimmed seven basis points from the previous week’s 26.41 per cent to 26.34 per cent. 

The one-year and two-year notes were, however, unchanged from the previous week’s levels of 22.50 per cent and 23 per cent, respectively.

A total of GH¢649.97 million bids were tendered by dealers out of which GH¢649.94 million were accepted by the central bank. 

This was, however, 11 per cent below the GH¢730 million anticipated by the Bank of Ghana (BoG). At the auction to be held on September 05, the BoG wanted to raise GH¢676 million.

Foreign exchange market

The cedi was unable to regain grounds as it slipped further against the major trading currencies during the week under review. The dollar was under pressure from reports of a lower-than-expected rise in U.S. job growth. 

The cedi, however, failed to take advantage with the greenback given support by robust manufacturing and car sales. The local currency was down 1.75 per cent against the dollar to close the week at GH¢3.19. 

The cedi also shaved 0.22 per cent against the euro with surprise interest rate cut by the European Central Bank helping to steady the shared currency. The cedi closed the week at GH¢4.14 on the interbank market.

An acceleration in U.K. construction growth in August also weighed on the cedi, which trimmed 0.65 per cent against the pound sterling to GH¢5.23. 

Against the Swiss Franc and the South African Rand, quotes by traders on the interbank market averaged GH¢3.43 and GH¢0.30 on September 5. 

This represented a loss of 0.16 per cent and 1.45 per cent against the Swiss Franc and the Rand during the week.