Business News of 2013-12-10

Stock market: Four equities help indices defy declines

The stock market displayed some resilience during the week under review with gains in four equities helping the indices defy declines by three others to bounce back from the previous week’s slide.

Though activity was generally moderate, the benchmark Composite Index edged up by 5.94 points to 2,129.69. This outturn saw the market post a year to date gain of 77.52 per cent at the week’s ending session.

The Financial Stock Index (FSI) on the strength of gains by a banking stock also added 0.94 points to 1,774.36. This brings its year to date return to 70.63 per cent.

Market movers

Ghana Oil, which was marked down after going ex-bonus on Thursday, December 5, 2013, led gainers climbing by 11GHp to 89GHp.

Tullow Oil also rose 5GHp to GH¢32; Ghana Commercial Bank bagged 3GHp to GH¢4.80 while Unilever inched up to GH¢18.29.

On the flip side profit taking and bargain hunting saw Stanchart drop 2GHp to GH¢14.96. In the same vein SIC Insurance and Total Petroleum shaved a pesewa each to 39GHp and GH¢5.02.

Trading activity

In all a total of 1.15 million shares valued at GH¢2.58 million were exchanged in 24 equities.

Outlook

We do not expect to see a change in market trends in the coming week. Activity is likely to be moderate as most investors continue to re-evaluate their positions for the year.

Stocks like Enterprise Group, PZ Cussons, CAL Bank and Total Petroleum may be under pressure on the back of excess offers recorded at recent session. On the other hand, Societe Generale, SIC Insurance and HFC are some of the stocks that are likely to be in demand.

Money Market

Treasury rates edged lower at the auction held last Friday November 29, 2013 as the BoG’s policy direction and competition amongst dealers continue to impact on rates.

The yield on the 91 and 182-Day bills trimmed 21 and 15 basis points to close at 18.66 per cent and 19.11 per cent respectively. The 1-Year Note was unchanged at the previous week’s 18 per cent but the 2-Year Note shaved 20 basis points to 18.0 per cent.

The Bank of Ghana had targeted an amount of GH¢428 million for the auction, total bids, however, submitted by dealers for bills and notes amounted to GH¢437.79 million. The Central Bank accepted GH¢437.78 million.

Inflation, Policy and Money Market Rates

Foreign Exchange Market

The local currency struggled for stability as Christmas demand and economic data in advanced countries saw it lose grounds.

Improved jobs and manufacturing report in the U.S. strengthened the dollar during the week. The Cedi as a result lost 1.17 per cent to the green back with average rates by bankers at GH¢2.09 on December 6.

The Cedi also weakened against the Euro as manufacturing in the euro zone expanded in November. Markit's Purchasing Managers' Index was up to 51.6 in November from 51.3 in October, its fastest rate since June 2011. This saw the Cedi shed 0.18 per cent against the Euro to close the week at GH¢2.84.

Against the Pound and the Swiss Franc the Cedi gave up 0.50 per cent and 0.56 per cent to GH¢3.42 and GH¢2.31 respectively.

The Cedi, however, bucked the trend against the South African Rand appreciating by 1.17 per cent to changed hands at GH¢0.20