Ghana Market Update - Cal Asset Management Company Ltd.

Investment Climate Brief 23rd - 27th Nov '20

There was little shift on the local bourse as the GSE-CI moved up by 0.01% while the GSE-FSI was unchanged during the week, following an uptick of 0.93% in FML.
At last week's auction Government missed its target by 21.45%, raising GHS 773.71m from 91 and 182-Day Bills.

ECONOMIC SCOOP

Bank of Ghana to update the market on its decisions from the MPC meeting today.

The Monetary Policy Committee (MPC) of the Bank of Ghana is expected to announce the outcome of its 97^th meeting held last week to review developments in the Ghanaian economy today.
We expect the Policy Rate to be maintained at 14.50% as the Central Bank looks to create an enabling environment to spur economic activity.

Government approves partial bailout for Customers of collapsed Fund Management companies which are yet to be liquidated.

The Securities and Exchange Commission has announced the Government’s directive to proceed with a partial refund for customers of the 27 remaining Fund Management firms which are yet to be formally liquidated.
The exercise comes with a cap of GHS 50,000.00 for 92,460 claims against these firms.

The GSE-CI and GSE-FSI made week-on-week gains of 0.44% and 0.91% respectively, as the market closed with a year-to-date return of -19.29%.
At last week's auction, Government raised GHS 2,160.65m from Cedi denominated securities and US$ 388.90m from a 3-Year USD Bond.

ECONOMIC SCOOP

Inflation drops for the third straight month to 10.10% for October 2020

Ghana’s inflation rate declined to 10.10% in October 2020 from 10.40% in September 2020.
However, Food inflation increased to 12.60% from 11.20%, while inflation on Non-Food items dropped to 8.30% from 9.80%.
The Greater Accra Region recorded the highest inflation rate of 15.20% whereas the Upper West Region had the lowest inflation rate of 1.60%.

The two major indicies, GSE-CI and GSE-FSI recorded significant drops last week as the market closed with no gainers, helping deepen the impact of the losses on EGH and SOGEGH stocks.
Government raised a total of GHS 1,924.00m at last week's auction, out of which GHS 1,155.92m was through 91, 182 and 364-Day Bills and the remaining GHS 768.08m raised through a 2-Year issuance.

ECONOMIC SCOOP

Gold production in Ghana in 2021 is expected to grow by about 9 percent, the biggest growth rate in years.

This is expected to push the volume of gold produced in Ghana to 4.65 million ounces next year according to a report by Global market analysis outfit Fitch Solutions.
The increase in gold production will help Ghana maintain its position as Africa’s largest gold producer in 2021, after surpassing South Africa in terms of gold production in 2019.
According to Fitch Solutions, significant growth in Gold production in Ghana will be driven by the Phase 2 completion of AngloGold Ashanti’s Obuasi Project.

Results on the local bourse was mixed at the end of last week's session as the GSE-FSI moved up by 0.68% while the GSE-CI moved south with a drop of -0.30%.
Government surpassed its fundraising target by about a quarter, raising GHS 838.06m form short tenor securities as against a target of GHS 709.00m.

ECONOMIC SCOOP

Ministry of Finance projects Government's expenditure to total GHS 27.43b in the first quarter of 2021

The Minister of Finance disclosed this estimate for expenditure during the presentation of Expenditure in Advance of Appropriation to Parliament on Wednesday 28^th October 2020.
Revenue and Grants for the period is expected to total GHS 13.3b.
The Ministry forecast yearend 2021 GDP growth to be 5.70% and fiscal deficit at 8.30%.
The Government intends to source between US$ 3b and US$ 5b to support the 2021 budget and liability management.

Gains in GCB and MTNGH were not enough to stop declines on the GSE-CI and the GSE-FSI as EGH and SOGEGH posted slides of 8.33% and 7.14% respectively.
At last week's auction Government exceeded its target of GHS 1,027.00m by 4.52% as a total of GHS 1,073.39m was raised through 91 and 182-Day Bills.

ECONOMIC SCOOP

Finance Minister to present Government’s spending budget for Q1 2021 on Wednesday 28^th October 2020

The Minister of Finance is expected to present the Expenditure in Advance of Appropriation to Parliament on Wednesday 28^th October, 2020, outlining Government’s spending projections for the first quarter of 2021.
This is a standard presentation to Parliament every election year aimed at forestalling transitional challenges the next couple of months after elections.