GSE suffers selling pressure

Trading on the Ghana Stock Exchange (GSE) closed on a bearish note last week as equity indices drifted further southwards due to significant sell-offs in some blue-chip stocks.

High levels of profit-booking activities among investors and speculative trading were among various reasons for the declining returns of the stock market.

At the close of last week’s trading, the GSE Composite Index dropped by 1.55 per cent to settle at an index level of 2,928.07 points, representing a year-to-date return of 13.50 per cent.

The GSE Financial Stocks Index also tumbled by 4.59 per cent to close at 2,417.11 points, reflecting a year-to-date return of 4.61 per cent.

In spite of the bearish closure of the market, the week’s trading ended with more shares exchanging hands.
 
Total traded volume stood at 1.19 million shares valued at GH¢4.11 million, representing 41.67 per cent increment over the previous week’s outturns.

Fan Milk Ltd emerged as the most actively traded stock with 38.80 per cent share of the overall traded volume.

Market Capitalisation, however, nosedived to settle at GH¢65,143.33 million.


Stock price Movements

On price movements, a total of 13 equities saw price changes; three advancers and 10 laggards.
 
Total Petroleum Ltd topped the advancers with 16 pesewas gain to trade at GH¢4.26 per share.
 
Ghana Oil Company Ltd and MTN Ghana Ltd also had their share prices lifted by 10 pesewas and a pesewa to finish the week at GH¢3.30 and 91 pesewas per share respectively.

On the downside of the market, Ecobank Ghana Ltd suffered a loss of GH¢1.05 to settle at GH¢6.90 per share.

Standard Chartered Bank Ltd keenly followed with a loss of GH¢1.00 to settle at GH¢25.00 per share.

Fan Milk Ltd and Access Bank (Ghana) Ltd followed with 30 pesewas and 10 pesewas decline to close at GH¢12.00 and GH¢3.00 per share respectively.

CAL Bank Ltd and GCB Bank Ltd also had their week’s opening prices trimmed to GH¢1.04 and GH¢5.30 per share respectively.

Other laggards from the financial sectors were Enterprise Group Ltd, Societe Generale Ghana Ltd and Ecobank Transnational Incorporated.

Guinness Ghana Breweries Ltd also joined the laggards.
 

Treasury securities

Interest rates on Government of Ghana treasury securities rose further after the week’s auction.

The yield on the 91-Day T-Bill rose by seven basis points to settle at 13.92 per cent while the interest rate on the 182-Day T-Bill increased by four basis points to settle at 14.40 per cent.

Yield on the other treasury securities, however, remained the same.  

A total of GH¢666.45 million was raised by the Government of Ghana at the recently held weekly auction.
 
The government accepted all bids tendered at the auction but missed the intended target of GH¢735.00 million for the week.

The 91-Day T-Bill was the highest accepted bid, constituting 56.41 per cent of the overall bids accepted.

The continued rise in interest rate of treasury securities posed a detrimental effect to economic growth through its negative effect on cost of capital.

Commodities

Brent crude oil witnessed its third bearish closure in the trading week despite OPEC’s decision to resume a production cut.

The losses of the black gold were attributed to Saudi Arabia’s signal to inject more of the energy commodity into the commodities market in order to ensure a minimum disruption when U.S. sanctions on Iranian oil exports begins on November 4.

Brent crude oil, thus, eased by US$2.44 to trade at US$77.39 per barrel.

Gold surged to fresh multi-month highs as it traded above US$1240 benchmark in the week under review.

The upsurge of the precious metal stemmed from a shift in market sentiment towards the demand of safe haven commodities, arising from continued bearish closure in global equities.

Gold, thus, added US$14.70 to trade at US$1,240.00 per ounce.  

Cocoa posted a positive weekly gain as signs of lower growth prospects affected the supply of the beans onto the international commodities market.

Rainfall patterns have considerably declined in Cote d’Ivoire and this has affected market expectation of the outlook of the soft crop.

This, coupled with massive development in Cote d’Ivoire’s energy sector aimed at boosting industry production, contributed to gains in the soft crop.

Cocoa, thus, added US$91.00 to trade at US$2,253.00 per metric tonne.
 
Coffee remained unchanged as a strong Brazilian real subdued downward pressure from rising growth prospects in Vietnam and Brazil.

The Brazilian real which had rebounded significantly in the past two weeks is the major determinant of the gains in the soft crop in recent times. Coffee settled at US$1.22 per pound. — GB