Laggards drag indices down

The bulls last week could not help the market bounce back from the previous week’s slide as downward pressure in nine equities saw the indices shed points.

Though four equities closed the week up, the benchmark Composite Index (CI) shed 49.96 points to close the week at 2,216.52 points.


The benchmark index, however, remained in positive territory with a year-to-date (YTD) return of 3.32 per cent.


The Financial Index (FI) also dropped 50.09 points to close the week at 2,105.25 points. The return on the financial index stood at 17.84 per cent.


Movers


On price movements, Benso Oil Palm led advancers with a 30GHp gain to close at GH¢3.50.


Investors with shares in Societe Generale were also 5GHp richer as it climbed to GH¢1.00. Ecobank Ghana also sustained its recovery, bagging 4GHp to end the week at GH¢7.07.

Stanchart completed the list, inching up a pesewa to GH¢18.01.


On the flip side, nine other equities saw downward trend in the week under review. Ghana Commercial Bank and Guinness Ghana were under selling pressure, dropping 40GHp and 30GHp to GH¢4.60 and GH¢2.50 respectively.


Enterprise Group eased to GH¢1.67 from GH¢1.80, while Total Petroleum and HFC Bank gave up 5GHp each to GH¢6.25 and GH¢1.30 respectively.


Bargain hunting led to PZ Cussons and UT Bank dropping 4GHp and 3GHp to 45GHp and 36GHp respectively.


ETI pared 2GHp off last two weeks' gains to 32GHp. Produce Buying Company also dipped by 2GHp to close the week at 12GHp.


Trading activity

Volume and turnover compared unfavourably to figures recorded last two weeks. A total of 1.75 million shares, valued at GH¢1.76 million, changed hands in 24 equities. The most traded stocks were ETI, CAL Bank and Societe Generale, which together, accounted for 66 per cent of the week’s total volume.


Outlook


In this week, we expect Ecobank Ghana, CAL Bank and SIC Insurance to steady the market based on trends observed in recent sessions. We also foresee sustained interest in Ecobank Transnational Incorporated.


Money market


Short-term rates scaled up at the auction held Friday August 8, 2014, on higher bids for the 91-Day and 182-Day Bills.


The 91-Day bill rose by a basis point to close the auction at 25.02 per cent. The 182-day bill also gained 14 basis points to 26.39 points.

The One-Year and Two-Year Notes were, however, unchanged at the previous week’s 22.5 per cent and 23 per cent respectively.


With the current attractive rates on the money market, bids by dealers amounted to GH¢1,772.37 million, 108.91 per cent above the Bank of Ghana's target of GH¢846 million. A total of GH¢1,767.37 million was thus accepted by the Central Bank.


Currency market


The Cedi showed volatility on the forex market, closing the week on a mixed note despite demand pressures and unexciting economic data from some advanced countries.


Economic data released by the Bank of England indicated a fall in Britain’s wages. The Cedi, as a result, edged over the Pounds Sterling, appreciating by 0.92 per cent during the week. Average rates by bankers for the Cedi versus the Pound Sterling stood at GH¢4.61 on August 15.


Against the Euro, the Cedi depreciated by 0.92 per cent to close last week at GH¢4.6 despite renewed Ukraine tensions putting pressure on the shared currency globally.

Dealers in search of the Swiss Franc and the South African Rand had to pay more for the two currencies as mid-rates increased to GH¢3.35 and GH¢0.29 from GH¢3.34 and GH¢0.28 the previous two weeks.


Overall, the Cedi shaved 0.46 per cent and 1.73 per cent against the Swiss Franc and the South African Rand.


It was, however, resilient against the U.S. Dollar following the release of lacklustre weekly jobless claims on August 14 and weak retail sales data earlier last week.


The Ghanaian currency for the longest period this year stabilised against the Dollar as interbank traders paid an average rate of GH¢3.03 since late July.