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MARKET SUMMARY REPORT 30th April 2015 TABLE OF CONTENT Economy Highlight Ghana’s economy grew by 4 percent in 2014 Africa records growth in macroeconomic performance Top Business Government finances $80m electrification project Economist warns Ghana against rushing to adopt Islamic Banking Foreign Bids Brent crude prices slip away from five-month highs as Japan's industry stutters Europe’s Debt Selloff Erases $61 Billion in Value in One Day Market Information Treasury Bill Rate Bank of Ghana Indicative rate GSE Summary Commodity News Investment Fund Rates Economy Highlight Ghana’s economy grew by 4 percent in 2014 Source: Myjoyonline Ghana‟s economy grew by four percent for last year. That‟s according to the final GDP estimates released by the Ghana Statistical Service. The 4 percent is the final growth for 2014 after it projected a 4.2 percent growth when it gathered about 70 percent of data for calculating the GDP estimates. According to the Government Statistician, Dr. Philomena Nyarko, the reduction was influenced by declining import. “The indications are that there were lower imports volumes in 2014 than earlier estimated. Marine fishing output also declined considerably," Dr. Nyarko said. The services sector had highest share of the annual GDP with 49. 6 percent, followed by industry with 28.4 percent, and agriculture with the least share of 22 .0 percent. However, in terms of growth, services had a 5.7 percent growth, agriculture 4.6 percent, and industry, 0.9 percent. For quarter on quarter bases, the economy grew by 1.2 percent just for the fourth quarter of last year. This however, represents a marginal reduction of 2.6 percent recorded in the third quarter of 2014. The Ghana Statistical Service said the country is now worth 113 billion Ghana cedis. However the country‟s per capita GDP is now 4,165 Ghana cedis. Africa records growth in macroeconomic performance Source: Ghana Web Ms. Antoinette Sayeh, Director of the International Monetary Fund (IMF) African Department, says sub-Sahara Africa has experienced rapid growth and better macro-economic performance. She said sub-Sahara Africa‟s Gross Domestic Product per capita growth accelerated toward the end of the 1990s to average 4.3 per cent per year over the 2000s, compared with 2.9 per cent a decade earlier. Ms. Sayeh attributed the growth to increased political stability, better micro-economic management and access to financing, as well an improved business climate, supported investment efforts, which has improved the capacity in the region. Speaking at the launch of IMF Africa Regional Outlook on Tuesday in Accra, Ms. Sayeh said increased trade integration also played a role not only via higher demand for exported goods, but by fostering competition and enabling some transfer of technology and efficiency gains from imported goods. Highlighting on the outlook, she said the current global environment and the risks of global financial volatility would be more challenging than in the recent past and the environment provided an opportunity to refocus policies on economic diversification and fostering structural transformation. Ms. Sayeh noted that despite the strong growth in trade flows, SubSahara Africa still trades below its potential, both in terms of total flows and of positioning in global value chains. She said some countries have started to leverage their comparative advantage either in agriculture and agro-business or in some cases in manufacturing. She said addressing the barrier to trade, could therefore unlock untapped productivity gains, bringing with it more jobs, higher income levels, more diversified economies and more sustainable growth. Ms. Sayeh said supporting the development of regional trade flows would better shelter the region from exogenous external shocks stressing that insufficient infrastructure comes out as one of the most important impediments to trade flows. Top Business Government finances $80m electrification project Source: Ghana Web The Tain District in the Brong-Ahafo Region is benefiting from Peri-Urban Rural Electrification Project funded by the Government through the Energy Ministry. The estimated USD $80 Million project is being executed by Ibbeco Company Limited, an Accra-based Ghanaian electrical engineering firm, with Tech-Consult, also an electrical engineering consulting firm in Accra as the project consultants. Mr. Gyan-Tutu, the Member of Parliament (MP) for Tain, who initiated the project, explained to the Media on Tuesday at Nsawkaw in the BrongAhafo Region that, the project had become necessary because most of the big towns in the district had expanded and therefore needed additional supply of electricity. He said work had commenced on the project, mentioning that some of the beneficiary communities were Nsawkaw, Seikwa, Badu, Menji, Brohani and Kwame Tenten. Mr. GyanTutu added that, the project covered 28 communities, saying the first- phase of it, comprising 14 communities included the seven-listed above. In a related development, another Rural Electrification Project being executed by China Water, a Ghanaian-based Chinese electrical engineering company for 20 towns and villages in the District had already started a week earlier. Mr. Gyan-Tutu, who did not indicate the cost of that project, cited some of the beneficiary towns as Koguaa, Konkonte, Dagadu, Agyanwiam, Kojowologo, Kwame Mensakrom, Adamu, Akore and Adadease. Economist warns Ghana against rushing to adopt Islamic Banking Source: Citifmonline Economist and the Head of the Finance Department at the University of Ghana Business School, Dr. Godfred Bokpin has advised the Bank of Ghana not to rush in okaying Islamic Banking in Ghana. He adds that authorities must engage in broad based discussions with relevant stakeholders to see the feasibility of adopting such a banking system in Ghana. ”In principle, there is no interest of „Riba‟ in Islamic Banking but there is no capital that is free in this world so we have to look at the mode of compensation that they derive by trading off consumption so that people get the understanding that they are not getting interest but they go more in terms of profit sharing or partnership arrangements which may involve trading of ownership for the level of investment that they are bringing in” explained Dr Bokpin. Adoption of Islamic Banking in non-Islamic states came up strongly for discussion at the just ended IMF Spring meetings in Washington where industry players were divided on its implications for economies. Unlike conventional banking, Islamic banking operates in line with the principles of the Shari‟ah law which prohibits the payment or acceptance of interest charges for the lending and accepting of money. This means that all loans contracted from such banks are interest free. But Dr Bokpin is of the view that there must be a thorough discussion on Islamic banking owing to the challenges with access to credit in Ghana. He is of the view that ”the discussions must be broad within a proper context so that we all have an understanding of Islamic banking so that when we are adopting it, we will know what exactly we are adopting.” Foreign Bids Brent crude prices slip away from five-month highs as Japan's industry stutters Source: Reuters Oil prices slipped away from five-month highs in early Asian trading on Thursday as Japanese factory output weakened for the second straight month. Japanese industrial output fell 0.3 percent in March adding to mounting evidence of an export-driven economy struggling to regain momentum amid slowing global growth. Brent crude futures dropped to a low of $65.37 a barrel before recovering to $65.76 a barrel by 0715, down 8 cents from their last settlement. WTI crude, however, was up 22 cents at $58.81 a barrel on bullish U.S. stocks data. The drops followed a session in which prices hit five-month highs after the first crude stock draw in almost half a year at the U.S. Cushing hub. "Brent and WTI prices closed at the highest level in nearly five months as U.S. crude oil inventories rose by just 1.9 million barrels (compared to more than 5.5 million barrels the previous week)," ANZ bank said on Thursday. "WTI prices outperformed Brent as crude oil stocks at key U.S storage hub Cushing fell for the first time in five months," it added. Analysts also said prices would unlikely chase new highs before fundamentals in the market change. Singapore-based brokerage Phillip Futures said it expected "more range-bound movements moving forward because fundamentals have remained unchanged." Despite prices hovering close to half-year highs, analysts warned against investment into certain oil sectors, even if prices continued to rise. Europe’s Debt Selloff Erases $61 Billion in Value in One Day Source: Bloomberg Investors revolting against negative yields in Europe wiped 55 billion euros ($61 billion) off the value of the region‟s government bonds in one day. The value of European debt dropped to 5.844 trillion euros on Wednesday, the lowest level since March 30, in Bank of America Merrill Lynch‟s Euro Government Index. Signs of inflation in the 19-nation economy choked off demand at a German government-debt auction as investors contended with a flood of supply from simultaneous sales by Italy and Portugal. The European Central Bank‟s 1.1 trillioneuro quantitative-easing program gives cause to avoid the region‟s government bonds, said Steven Wieting, global chief investment strategist in New York at Citigroup Inc.‟s private bank. Wieting said on April 29 the bank cut allocation to German bunds in favor of U.S. Treasuries in the five- to seven-year range. “There is no reason to accept negative yields for the same reasons that institutional investors might,” said Wieting, whose funds hold a smaller amount of bunds than indexes recommend. Since his bank advises some of the world‟s most affluent families, with assets that total $374 billion, Wieting isn‟t required to hold easy-to-trade sovereign debt. “Private-wealth clients don‟t need to follow that particular herd.” Germany got bids of 3.649 billion euros at the five-year note auction, short of its 4 billion-euro sales goal. Adding to the supply pressure, Italy auctioned 8.25 billion euros of debt on Wednesday, while Portugal sold 2.5 billion euros of 10- and 30-year bonds via banks. Market Information Treasury Bill Rate Monday 27th April, 2015 to Friday 01st May, 2015 Period Previous Rates Discount Rates Interest Rates Weekly Change in Rate 91 - Day 25.2039% 23.6337% 25.1178% 0.0861% 182 - Day 25.9074% 22.8605% 25.8107% 0.0967% 1 – Yr. Note 22.5000% -% 22.5000% -% 2 – Yr. Fixed Rate Note 23.0000% -% 23.0000% -% Source: Bank of Ghana Bank of Ghana Indicative Rate Thursday 30th April, 2015 Currency Pairs Code Buying Selling U.S Dollar USDGHS 3.8474 3.8512 Pound Sterling GBPGHS 5.9450 5.9516 Swiss Franc CHFGHS 4.1023 4.1054 Australian Dollar AUDGHS 3.0985 3.1050 Canadian Dollar CADGHS 3.2149 3.2173 Danish Kroner DKKGHS 0.5750 0.5753 Japanese Yen JPYGHS 0.0324 0.0324 New Zealand Dollar NZDGHS 2.9731 2.9776 Norwegian Kroner NOKGHS 0.5136 0.5138 Swedish Kroner SEKGHS 0.4624 0.4627 S/African Rand ZARGHS 0.3265 0.3267 Euro EURGHS 4.2896 4.2938 Chinese Reminbi CNYGHS 0.6207 0.6212 BCEAO GHSXOF 152.77 152.92 Dalasi GHSGMD 11.19 11.20 Ouguiya GHSMRO 80.45 80.53 Naira GHSNGN 51.65 51.70 Leone GHSSLL 1133.11 1134.23 WAUA WAUGHS 0.1006 0.1006 Source: Bank of Ghana GSE Summary GSE STOCK INDICES GSE-CI GSE-FSI Previous 28/4/2015 2,263.79 2,286.65 Current 29/4/2015 2,268.53 2,291.76 4.74 5.1 0.33% 2.14% CYTD 01/01/15 -29/4/2015 Source: Ghana Stock Exchange The GSE-Composite Index (GSE –CI), the benchmark measure of performance of the Ghana Stock Exchange gained 4.74 points from 2,263.79 to close at 2,268.53, representing a year-to-date gain of 0.33%. The GSE-Financial Stocks (GSE-FSI), which tracks the performance of listed financial stocks, also gained 5.1 points from 2,286.65 to close at 2,291.76 representing a year-to-date gain of 2.14%. COMMODITY FUTURES Commodity Price % Change $65.79 -0.08% $1,202.67 -0.17% $368.75 +0.27% SUGAR /MT $374.90 -1.60% COCOA /MT $2,941.00 +0.58% CRUDE OIL (BRENT) GOLD T/OZ CORN /BU Source: Bloomberg Investment Funds Unit Trust and Mutual Funds Liberty Freedom Fund as at 29/04/15 Offer GHC 0.221 Bid GHC 0.2188 Year to Date 2.68% SAS Fortune Fund as at 28/04/15 Price GHC 0.5099 Price Change GHC 0.0005 Year To Date -0.02% HFC Equity Fund as at 28/04/15 Price GHC 0.4524 Price Change GHC 0.0011 Year To Date 4.92% HFC Unit Trust as at 28/04/15 Offer GHC 0.2886 Bid GHC 0.2915 Year To Date 7.66% HFC REIT as at 28/04/15 Offer GHC 2.0185 Bid GHC 2.0378 Year To Date 5.11% M-Fund as at 28/04/15 Bid Price GHC 0.6180 Offer Price GHC 0.6242 Year To Date 8.21% BFund as at 28/04/15 Bid Price GHC 0.3678 Offer Price GHC 0.3715 Year To Date -1.54% Source: Business Ghana Excellence quote Desire is the key to motivation, but it's the determination and commitment to unrelenting pursuit of your goal - a commitment to excellence - that will enable you to attain the success you seek. Mario Andretti Thank you.