Business News of 2014-06-24

Indices record contrasting fortunes

At the close of the week, the indices recorded contrasting fortunes. Seven equities registered gains while nine others slipped.

The benchmark Composite Index weighed by the laggards shaved 1.93 points to 2,356.80. This brings its year-to-date change to 9.86 per cent.

The Financial Stock Index, however, rode on advances in financial stocks to climb 15.05 points to 2,114.85. This outturn saw the FSI post a year-to-date gain of 18.37 per cent at the week’s ending session.

What moved

The investor’s appetite for some financial stocks increased last week with Ghana Commercial Bank topping the list of advancers; it added 10GHp to GH¢5.45. Ecobank Ghana and Stanchart also rallied this week, pushing their share prices up by 5GHp and 6GHp to GH¢7.10 and GH¢18.07 respectively.

SIC Insurance and Enterprise Group, the two Insurance leaders edged up 4GHp and 2GHp to 44GHp and GH¢1.80 respectively. Ecobank Transnational Incorporated and Benso Oil Palm completed the list inching up a pesewa each to 25GHp and GH¢2.42 respectively.

On the other hand, Tullow Oil and Guinness Ghana recorded losses shaving 29GHp and GHp18 to GH¢34.50 and GH¢5.07; Fan Milk was also down 13GHp to GH¢6.83. Four other decliners also closed the week down by 5GHp; HFC Bank and Ghana Oil eased to GH¢1.55 and 95GHp while Societe Generale and UT Bank slipped to 85GHp and 35GHp respectively. Other equities that registered losses were CAL Bank and Total Petroleum.

Trading activity

A total of 2.37 million shares changed hands in twenty-three equities. Volumes registered this week failed to match last week’s figures. CAL Bank (33.1 per cent), UT Bank (27.1 per cent) and Enterprise Group (7.7 per cent) were the most traded stocks. Total value of trades also reduced to GH¢4.38 million from GH¢10.32 million.


Trends observed in recent days point to buyers seeking discount deals in Total Petroleum, Guinness Ghana and Fan Milk. This development is likely to put pressure on their prices. On the other hand, Ghana Commercial Bank, Stanchart, Ecobank Ghana and SIC Insurance are expected to help the Composite Index gain traction.

Foreign exchange market

The local currency struggled for stability last week as economic data in advanced countries saw it lose grounds against major trading currencies.

Rising U.S. inflation gave support to the Dollar, resulting in a 2.60 per cent depreciating of the Cedi in the week under review. Forex traders thus paid GH¢3.07 against the greenback at the week’s close.

Funds released by the European Central Bank into the Euro zone banking sector gave a lift to the Euro. The Cedi was thus down by 3.09 per cent against the shared currency with interbank traders paying an average rate of GH¢4.18 for the Euro.

The Pound Sterling continued to enjoy the lion's share of attention in global forex markets. Reports of an improving U.K. labour market and the decision by U.K policy makers to keep interest rates on hold saw the Pound edge up against the Cedi.

The Sterling, as a result, climbed 3.77 per cent against the Ghanaian currency with rates by bank traders averaging GH¢5.23.

Against the Swiss Franc, the local currency closed on the back foot, trimming 3.19 per cent to GH¢3.44.

The acceleration of South Africa’s inflation and a narrowed current account deficit failed to give the Cedi a boost. The local currency lost 2.59 per cent against the Rand and traded at a mid-rate of GH¢0.29.

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