Cedi staggers against major currencies

Business News of Tuesday, 20 January 2015

Source: Graphic Online

Ghana Cedis 19Nov2010

The local currency registered its biggest weekly loss against the Swiss Franc as the move by the Swiss National Bank (SNB) to remove a cap in place since 2011 led to the Franc soaring globally.

The cedi also lost ground to the dollar, pound and rand as demand by corporates and importers acted to squeeze supply.

The cedi gave up 0.23 per cent against the Swiss Franc as the removal of the three-year cap of the Franc to the Euro sent the export-dependent economy’s currency ascending.

Traders on the interbank market quoted GH¢3.63 for the Franc at the current week’s close from GH¢3.17 the previous two week.

The cedi was unable to take advantage of a drop in U.S. retail sales and a rise in U.S. jobless claims to its highest level in four months.

It trimmed 0.27 per cent against the greenback with traders on the interbank market quoting an average rate of GH¢3.22 for the dollar.

The cedi also trimmed 0.65 per cent and 2.15 per cent against the Pound Sterling and the South African Rand, with rates on the interbank board averaging GH¢4.89 and GH¢0.28 for the Pound Sterling and the South African rand respectively on January 16.

The local currency, however, strengthened against the Euro as concerns over the Euro-zone weighed.

The cedi, as a result, gained 1.77 per cent against the shared currency to change hands at GH¢3.74.

Stock market

Investor interest in the market remained high with impressive bids and offers being registered at most session of last week.

The market, however, extended its southward drift as the search for discount deals led to declines in seven equities.

At the close of the week’s ending session, the benchmark Composite Index (CI) was down by 27.70 points to 2,233.39 points. The CI slipped into negative territory with a year-to-date change of negative 1.22 per cent.

The Financial Stocks Index (FSI) also backtracked, shedding 32.51 points to 2,213.14 points. This brought its year-to-date return to negative 1.36 per cent.

Movers

Ghana Oil was the sole gainer in the week ending January 16, edging up by a pesewa to GH¢1.06.

Eight equities, however, slipped under selling pressure. GCB Bank was the biggest loser, dropping 20GHp to GH¢5.50. Ecobank Ghana was also down 8GHp to GH¢7.49 while Standard Chartered Bank shaved 4GHp to GH¢20.10.

Enterprise Group gave up 2GHp to GH¢1.70 while SIC and ETI trimmed a pesewa each to 35GHp and 25GHp respectively.

UT Bank and CPC completed the list, easing to 22GHp and 1GHp respectively.

Trading activity and outlook

A block trade in the shares of SIC Insurance was one of the highlights of trading activity on the bourse during the week under review.

Volume and turnover were, as a result, impressive with a total of 4.56 million shares changing hands.

This compared to the 663,861 shares that were exchanged the previous two weeks.

Turnover for the week came up to GH¢2.62 million, compared to the previous two weeks’ GH¢2.57 million.

In this, we do not foresee a marked change in trading activity as investors will continue to take positions.

Trades may, however, be at a premium if buyers and sellers remain apart on their valuations

CAL Bank, Ghana Oil and UT Bank are likely to be among advancers at the next session. GCB Bank, Enterprise Group and Ecobank Ghana may, however, shed some grounds as buyers continue to look for discounted deals.

Money market

The Bank of Ghana (BoG) published its borrowing calendar during the previous two weeks.

Nonetheless, indications of higher need of funds failed to impact on rates at the auction held January 9.

The 91 and 182-day bills lost ground while the 1-Year and 2-Year Notes remained steady at previous levels.

With investors anticipating an easing of inflationary pressures when discussions are concluded with the IMF, the 91-day bill shaved a basis point to close at 25.83 per cent.

The 182-Day bill was also down by three basis points to 26.38 per cent. The 1-year and 2-Year Notes were, however, stable at the previous two week’s 22.50 per cent and 23 per cent respectively.

A total of GH¢844.9 million was raised by the BoG.

By Nana K. Agyeman Gyamfi & Ellen Abena Opoku

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