Download MARKET SUMMARY REPORT 27thAPRIL 2016

MARKET SUMMARY REPORT
27thAPRIL 2016
TABLE OF CONTENT
Economy Highlight
 Governor pledges to pursue SMEs growth
 Ghana's economy as weak as Greece's - Akoto Osei
Top Business
 Negotiations on oil contracts raise concerns
 Pianim urges FDI courting
Foreign BiD
 Oil prices jump on weak dollar, strong investor appetite
 Fed set to keep rates unchanged, may nod to ebbing risks
Market Information
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Treasury Bill Rate
Bank of Ghana Indicative rate
GSE Summary
Commodity News
Investment Fund Rates
Economy Highlight
Governor pledges to pursue SMEs growth
Source: Business & Financial Times
Dr. Abdul-Nashiru Issahaku, Governor-Bank of Ghana (BoG), has pledged to collaborate with
banks in pursuing policies that will contribute to growing the country‘s small and medium size
companies, and provide incentives to encourage lending to productive sectors of the
economy. ―The Bank of Ghana remains committed to promoting and scaling-up real sector
lending to boost growth. While focusing on ensuring stability of the economy, the Bank will
continue to pursue policies that contribute to growth by working with banks to provide
incentives and encourage lending to productive sectors of the economy; and most importantly
for banks to lend at reasonable rates, especially to SMEs,‖ he said.
Dr. Issahaku was speaking at the maiden SME fair under the theme ‗SME Financing in Ghana —
Enhancing Access and Reducing Costs‘ and explained: ―Given the dynamic business
environment in which the SMEs operate, it should be a matter of priority for us to respond
creatively by facilitating new financing modalities, or special windows, to complement the
traditional financing options‖. The SME fair marked his first public engagement as Governor, and
was aimed at drawing SMEs in touch with banks, public agencies, and Non-Bank Financial
Institutions (NBFIs) in order to expose them to available innovative financing solutions.
Ghana's economy as weak as Greece's - Akoto Osei
Source: Ghana Web
A ranking member of the Finance Committee in Parliament, Dr. Anthony Akoto Osei, has likened
Ghana's economic situation to that of Greece but says Ghana has no bail out route from the
European Union. Ghana's economy has slumped in the past years due to various factors
including the energy crisis which that hit the country in the last three years. The economy,
however, has begun to pick up, which the President John Mahama has attributed to prudent
economic management by his government. But Dr. Akoto Osei says Ghana's economy is likely to
collapse like that of Greece if emergency measures are not taken, noting ―Our interest rates are
high which isn‘t really surprising as Malawi is the only other country that has a higher interest rate
than us and that is not surprising because we live in Ghana."
He noted Ghana in 2011 used to grow when the oil full production hit between 14 and15
percent but said that has changed now because "we are down to what is projected to be
around 4 percent and certainly there are a lot of countries above that which is factual. ―I have
gone to borrow money recently and I borrowed it at 36 percent [interest rate] which is a private
loan and I believe businesses may get between 29 and 32 per cent and how are they going to
compete," he said. Dr. Akoto Osei blamed the current economic situation to what he said is the
government's too much borrowing from the domestic market, and rejected claims that the
economy is resilient.
Top Business
Government justifies stability agreement with Goldfields-Ghana
Source: Myjoyonline
The Finance Ministry has justified its decision to sign a Stability Agreement with mining firm,
Goldfields-Ghana. Government through parliament last month announced its decision to allow
Goldfields-Ghana to pay a fixed tax and royalty rate for the next 11 years. This decision has,
however, not gone down well with some civil society groups and even the committee that was
established to review the agreement granted mining firms like, AngloGold and NewmontGhana. But Deputy Finance Minister Ato Forson tells JOYBUSINESS there was no way government
could have declined the agreement. "As soon as you set one precedent, in the case of Ghana,
like Newmont, others doing similar investments will ask for similar equality.
Failure to do it will mean they are going away and that is why I said that in taxing petroleum or
mineral resources in the extraction industry, you really will have to look at what your sub-region is
doing," Mr. Forson said. He explained that others are benchmarking and failure to do it will
mean that things will not be as they were which means taking an investment or a financial
decision. According to Mr. Forson, they are taking a decision that would benefit the community
as a whole and not necessarily to look at revenue but both. "So you don‘t only look at how
much you get in terms of how much you are going to benefit the impact on job, creation, the
impact on growth, add them and then form an opinion. So if you are to dwell on one side you
make a mistake," he said.
Pianim urges FDI courting
Source: Business & Financial Times
Chief Executive Officer of New World Investments Ltd. and renowned economist, Mr. Kwame
Pianim, has urged policymakers to do more to court foreign direct investments (FDIs) into the
country. Mr. Pianim was speaking at the Canada-Ghana Chamber of Commerce breakfast
meeting held in Accra under the theme ‗Moving from aid to trade‘, and opined that foreign
businesses have the financial muscle and technical know-how (which many local businesses
lack) to partner local businesses in order to facilitate their growth and expansion process. ―There
is no country that does not need aid. So my thesis is that even in trade we need aid.
For example, if a local businessman wants to produce and export to another country, say
Canada, and he has a joint venture with a Canadian businessman, it will become easier to
export to Canada than the local businessman doing it alone. This is because if there are laws on
the other side that are impeding access to their market, the Canadian businessman will work
with his government to ease them and eventually make it possible to export the goods to
Canada,‖ he told the B&FT. He added that apart from the advantage local businesses can
derive from forging partnerships with the foreign businessmen, they further provide a market for
Ghanaian businesses. ―Another scenario is that if you take the Chinese, they are now specialists
in the garments industry.
Foreign Bid
Oil prices jump on weak dollar, strong investor appetite
Source: Reuters
Crude oil futures rose around half a dollar on Wednesday and remained near 2016 highs on the
back of strong investor sentiment and a weak dollar, although analysts warned this month's bullrun could soon run out of steam. International Brent crude futures were trading at $46.31 per
barrel at 2.53 a.m. ET, up 57 cents, or 1.25 percent from their last settlement. Brent received extra
support from reports that Saudi Arabia and Kuwait appear no closer to restarting their jointly
operated Khafji oilfield, which produced 280,000 to 300,000 barrels per day (bpd) before
environmental problems forced a planned 18-month closure in October 2014. U.S. West Texas
Intermediate (WTI) crude was up 51 cents, or 1.16 percent, at $44.55 a barrel.
WTI was further bolstered after the American Petroleum Institute (API) reported a draw of nearly
1.1 million barrels in U.S. crude inventories last week versus analysts' expectations for a 2.4 millionbarrel build in a Reuters poll. Brent and WTI were near respective 2016 highs of $46.49 and $44.83
hit in the previous session. Beyond strong investment appetite from financial traders, analysts said
crude was being lifted by a falling dollar, which has shed 5 percent in value against a basket of
other leading currencies since the beginning of the year. A weak dollar makes fuel imports
cheaper for countries using other currencies, potentially spurring demand. BMI Research said
that it expected "China's crude oil imports will remain strong over the short-term," driven by
strong demand from independent refineries and continued filling of its strategic petroleum
reserves.
Fed set to keep rates unchanged, may nod to ebbing risks
Source: Reuters
The U.S. Federal Reserve is expected to keep interest rates unchanged on Wednesday as it
continues to monitor the impact from weakening global growth but may seek to signal to
markets it is determined to resume policy tightening this year. The Fed has held its overnight
lending rate for banks at a target range of between 0.25 and 0.50 percent since it lifted the
benchmark interest rate for the first time in a decade from near zero last December. Since then
the Fed has signaled more caution, despite the U.S. economy's relative strength, as concerns a
slowing China would depress global growth sparked steep stock price declines and tighter
financial market conditions early in the year.
The latest Fed policy decision statement is due to be released at 2 p.m. EDT on Wednesday. Fed
Chair Janet Yellen is not scheduled to hold a press conference. Markets have turned up since
the last rate decision in March. The S&P 500 [.SPX] has risen more than 14 percent since midFebruary. China's economy has also shown more positive signs, growing at a 6.7 percent pace in
the first quarter. A Reuters poll of more than 80 economists showed expectations were for two
rate increases this year, with the possibility the Fed will hike in June. Additionally, some of the
pressures that have kept inflation lower than the Fed would like have abated.
Treasury Bill Rate
Monday 25th April, 2016 To Friday 29th April, 2016
Period
Previous Rates
Discount Rates
Interest Rates
Weekly Change in
Rate
91 - Day
22.8017%
21.5752%
22.8052%
0.0035%
182 - Day
24.6848%
21.9370%
24.6396%
0.0453%
1 – Yr. Note
23.0000%
-%
23.0000%
-%
2 – Yr. Fixed Rate Note
24.0500%
-%
24.0500%
-%
Source: Bank of Ghana
Bank of Ghana Indicative Rate
Tuesday 26th April, 2016
Currency
Pairs Code
Buying
Selling
U.S Dollar
USDGHS
3.7921
3.7959
Pound Sterling
GBPGHS
5.5293
5.5367
Swiss Franc
CHFGHS
3.9010
3.9032
Australian Dollar
AUDGHS
2.9305
2.9361
Canadian Dollar
CADGHS
2.9984
3.0003
Danish Kroner
DKKGHS
0.5766
0.5771
Japanese Yen
JPYGHS
0.0341
0.0342
New Zealand Dollar
NZDGHS
2.6104
2.6155
Norwegian Kroner
NOKGHS
0.4659
0.4659
Swedish Kroner
SEKGHS
0.4680
0.4683
S/African Rand
ZARGHS
0.2628
0.2629
Euro
EURGHS
4.2916
4.2943
Chinese Reminbi
CNYGHS
0.5843
0.5844
BCEAO
GHSXOF
152.75
152.85
Dalasi
GHSGMD
11.23
11.24
Ouguiya
GHSMRO
91.11
91.20
Naira
GHSNGN
52.41
52.46
Leone
GHSSLL
1027.70
1028.73
WAUA
WAUGHS
0.1184
0.1184
Source: Bank of Ghana
GSE Summary
GSE STOCK INDICES
GSE-CI
GSE-FSI
Previous 25/04/2016
1,840.01
1,728.54
Current 26/04/2016
1,839.52
1,729.07
0.49
0.53
-7.79%
-10.41%
CYTD
01/01/16 - 26/04/2016
Source: Ghana Stock Exchange
The GSE-Composite Index (GSE –CI), the benchmark measure of performance of the Ghana
Stock Exchange gained 0.49 point from 1,840.01 to close at 1,839.52 representing a year-todate gain of -7.79%.
The GSE-Financial Stocks (GSE-FSI), which tracks the performance of listed financial stocks, also
gained 0.53 points from 1,728.54 to close at 1,729.07 representing a year-to-date gain of 10.41%.
COMMODITY FUTURES
Commodity
CRUDE OIL (BRENT)
Price
% Change
$ 46.39
+ 1.42%
GOLD T/OZ
$1,245.96
+ 0.21%
CORN /BU
$ 385.75
- 0.39%
SUGAR /MT
$ 460.40
+ 7.10%
COCOA /MT
$3,211.00
+ 1.39%
Source: Bloomberg
Investment Funds
Unit Trust and Mutual Funds
Liberty Freedom Fund
as at 22/04/16
Offer
GHC 0.2559
Bid
GHC 0.2533
Year to Date
2.43%
SAS Fortune Fund
as at 25/04/16
Price
GHC 0.4930
Price Change
GHC -0.0062
Year To Date
- 2.65%
HFC Equity Fund
as at 25/04/16
Price
GHC 0.4992
Price Change
GHC -0.0001
Year To Date
1.11%
HFC Unit Trust
as at 25/04/16
Offer
GHC 0.3631
Bid
GHC 0.3667
Year To Date
7.71%
HFC REIT
as at 25/04/16
Offer
GHC 2.5016
Bid
GHC 2.5266
Year To Date
4.684%
M-Fund
as at 25/04/16
Bid Price
GHC 0.7500
Offer Price
GHC 0.7575
Year To Date
7.71%
BFund
as at 25/04/16
Bid Price
GHC 0.4049
Offer Price
GHC 0.4049
Year To Date
3.90%
Source: Business Ghana
Motivational quote
Believe in yourself! Have faith in your abilities! Without a humble but reasonable
confidence in your own powers you cannot be successful or happy.
Norman Vincent Peale
Thank you.