KEY INSIGHTS

The government of Ghana has officially resumed payments on its Eurobond debts following the successful completion of a debt exchange programme with bondholders. (GhanaWeb, 2024)

Ghana Treasury Bill Rates Rise Across All Tenors

Ghana Fixed Income Market Weekly Volume Falls 38.23% to GH₵ 2.94 Billion, the Lowest Since Early August.

Cocoa futures dip below $7,600 amid strong dollar and mixed global demand data, while gold climbed past $2,710 per ounce on Friday, reaching a new record high.

PRIMARY DEBT MARKET ISSUANCE WEEK

Over the past week, interest rates on Government of Ghana Treasury bills saw an upward movement across all tenors. The 91-day bill increased by 32.62 basis points, from 25.6182% to 25.9444%, reflecting the largest rise compared to other tenors, likely due to increased demand for short-term returns amidst inflationary pressures. The 182-day bill also rose by 12.63 basis points, moving from 26.9045% to 27.0308%, signaling a modest increase in borrowing costs for the government over the medium term.

Similarly, the 364-day bill experienced a 15.57 basis point rise, from 28.5814% to 28.7371%, showing that investors are demanding higher returns for longer-term securities. These increases suggest a general trend of rising interest rates as investors factor in higher inflation expectations, currency risks, or tightening liquidity, all of which could elevate the cost of government borrowing and debt servicing.

_{Source(s): Bank of Ghana}

GHANA FIXED INCOME MARKET VOLUME TRADED

The Ghana Fixed Income Market ended the week with a total traded volume of GH₵ 2.94 billion, marking a 38.23% decline from the previous week’s GH₵ 4.76 billion and the lowest level since early August. Out of 5,984 trades, 99.3% were Treasury bills, while 0.48% were Sell/Buy Back trades.

Week’s Ghana Fixed Income Market Total Volume Traded

Trading activity on the Ghana Fixed Income Market (GFIM) for the week of October 14 to October 18, 2024, showed fluctuating volumes across various security types. The week commenced with a trading volume of GH₵ 432 million on October 14, primarily driven by Treasury Bills. This figure dipped to GH₵ 419 million on October 15, with the largest contribution attributed to Treasury.

The market rebounded to peak at GH₵ 929 million on October 16, again with contributions largely attributed to Treasury Bills. On October 17, trading volumes sharply eased to GH₵ 433 million, led by Treasury Bills. The week concluded with a significant surge to GH₵ 731 million on October 18, driven by strong contributions from Treasury Bills and Sell/Buy Back Trades. Treasury Bills consistently dominated market activity throughout the week.

EQUITY MARKET

Trading activity on the local bourse inched up this week, with a volume of 1,455,234   shares exchanged, marking a 30.56% upstick from the 1,114,611 shares posted last week. However, the total traded value saw slight downturn of 2.51%, reaching GH₵ 13.97 million. As a result, the market capitalization dipped by 0.11%, closing at GH₵ 99.05 billion.

Week’s Equities Top Gainers & Laggards

In terms of market indices, the GSE Composite Index (GSE-CI) closed at 4,347.47, showing a weekly loss of 0.09% and a monthly loss of 2.14%, but maintaining a strong year-to-date gain of 38.89%. Meanwhile, the GSE Financial Stocks Index (GSE-FSI) maintained its value at 2,203.38 points, a monthly rise of 2.3%, and a year-to-date gain of 15.87%.

_{Source(s): Ghana Stock Exchange}

_{Source(s): African Markets, AFX Kwayisi}

COMMODITY MARKET

The commodities market experienced a divergent performance this week. Gold climbed past $2,710 per ounce on Friday to $2,721.20, reaching a new record high, driven by global demand for safe-haven assets and expectations of further interest rate cuts from major central banks. Gold also found support from rising tensions in the Middle East, following the Israeli military’s confirmation on Thursday that Yahya Sinwar, a key Hamas leader and top target, was killed in combat, raising fears of regional escalation.

Brent slowed to $73.06 per barrel on Friday, marking the biggest weekly losses since early September, dropping more than 7%. The decline was driven by weaker demand forecasts from OPEC and the IEA, slowing economic growth in China and signs of easing geopolitical tensions in the Middle East.

_{Source(s): Trading Economics}

Cocoa futures eased to below $7,600 per tonne, touching their lowest in a week, in part due to the dollar’s strength, which sparked long liquidation. At the same time, traders weighed mixed demand data from Europe and Asia against ongoing supply concerns. Latest data showed Europe’s third-quarter cocoa grind, a measure of demand, fell 3.3% year-on-year to 354,334 metric tons, while Asia’s cocoa grind increased by 2.6% year-on-year to 216,998 metric tons.

CURRENCY MARKET

The Ghanaian cedi has shown a varied performance against major currencies in recent exchange rate movements. The cedi depreciated slightly against the US dollar, with the USD/GHS pair rising from 15.79 to 15.90. Similarly, it saw a minor drop against the pound, as the GBP/GHS rate slightly edged up from 20.79 to 20.84. In contrast, the cedi was marginally appreciated against the euro, with the EUR/GHS rate posting a slight dip from 17.40 to 17.37. This suggests mild pressure on the cedi, particularly against the dollar and British pound, while slightly appreciating with the euro.

_{Source(s): Bank of Ghana}