WEEKLY MARKET WATCH SIC-FSL INVESTMENT+ RESEARCH| MARKET REVIEWS|GHANA

9th October, 2014

SIC LIMITED|ADVISORY|FUND MANAGEMENT|STOCK BROKERAGE|INVESTMENT RESEARCH

STOCK MARKET MARKET ACTIVITIES SHORE UP

Ren ewed investors confidence in capital market investment, INDICATORS WEEK OPEN WEEK END CHANGE shore up performance on the (GSE) Market Capitalization (GH¢ last week. Stocks of Aluworks Limited (ALW), PBC Limited 'million) 63,840.80 64,027.40 0.29% (PBC) and SIC Company Limited (SIC) were the most Market Capitalization (US$' million) 19,965.85 20,024.21 0.29% sought for within the week.

Volume traded (shares) 1,933,674.00 5,818,767.00 200.92% Activities in the above stocks saw key market indices rallied across board, as the broader market (GSE Composite Index), Value Traded (GH¢) 3,842,401.95 7,177,990.01 86.81% GSE Financial Services (GSE-CI) and SIC-FSL Top 15 Index Value Traded (US$) 1,201,689.43 2,244,875.69 86.81% (SIC-FSL T-15) posted better returns than the week before.

Table 1: Market Summary The returns on the GSE-CI was 15.53% better than the previous 3.09% on the market, hence the yield on the INDEX ANALYSIS broader market was 3.57% last Thursday. Similarly, the yields on the financial stocks (GSE FSI) and the SIC-FSL Top INDICATORS Closing Week YTD Level Change CHANGE 15 index also appreciated 3.21% and 9.91% to see both yields settled at 18.96% and 13.64% respectively. GSE Composite Index 2,221.73 0.46% 3.57% The cumulative value of the Ghanaian market also rose to SIC-FSL Top 15 Index 3,926.96 1.09% 13.64% GH¢64.03 billion from GH¢63.84 billion the week before. GSE Financial Stocks Index 2,125.33 0.49% 18.96% Table 2: Key Stock Market Indices

LIQUIDITY

A total of 5.82 million shares exchanged hands last week, which was 30.00% 200.92% better than the previous week’s figure of 1.93 million shares. 25.00%

Value traded also increased by 86.81% compared to the previous 20.00% week’s figure of GH¢ 3.84 million and this was due to activities in 15.00% higher priced equities. 10.00% Principally, activities were centered on the financial stocks, contributing 5.00% 81.22% and 81.70% in both aggregate volume and value of shares 0.00%

traded respectively. 7-Jul-14

2-Jan-14

7-Oct-14

2-Apr-14

9-Sep-14

1-Aug-14 18-Jul-14

CAL Limited (CAL) was the best active stock in the period, accounting 7-Mar-14

15-Jan-14 28-Jan-14

10-Jun-14 23-Jun-14

10-Feb-14 21-Feb-14 15-Apr-14 30-Apr-14

23-Sep-14

14-Aug-14 27-Aug-14

20-Mar-14 28-May-14 for 48.28% and 36.79% of both total shares and value that traded 14-May-14 last week respectively. GSE YTD Change GSE-FSI YTD SIC-FSL 15 YTD Change Fig 1: Year-to-date returns

MARKET MOVERS

Aluworks hits GH¢0.04 Aluworks Limited (ALW), the best performed stock last week, rose by STOCK Wk Open Wk End Change % TICKER change 33.33% from a week opened price of GH¢0.03 per share. The rise, according some analyst might be investment interplay by participants, ALW 0.03 0.04 0.01 33.33%

maybe to tease up interest in the company’s shares on the bourse. BOPP 3.72 3.75 0.03 0.81%

Though, Aluworks has not been relatively impressive on the market this CAL 0.92 0.95 0.03 3.26% year due to its negative returns to shareholders investors, the stock still

appeared attractive to market participants they as they remained ETI 0.29 0.30 0.01 3.45% strongly attached to the company. This was evident in its share price appreciation on the local bourse. The stock closed as the biggest gainer PBC 0.11 0.13 0.02 18.18% over the week. PZC 0.39 0.40 0.01 2.56%

PBC returns to GH¢0.13 SCB 18.25 18.27 0.02 0.11% Increased appetite for the shares of PBC Limited on the exchange last SIC 0.40 0.43 0.03 7.50%

week supported its 18.18% rise in the company’s market value. PBC SCB PREF 0.55 0.58 0.03 5.45% closed last Thursday’s trading at GH¢0.13 per share, up from the GH¢0.11 the week before. Table 3: Gainers for the week

Investors still believe in the company’s ability to return to profitability, regardless of increased losses in its third quarter result. PBC posted a marginal increase of 2% in revenue to settle at GH¢1.02 billion in Q3’14, however the company increased its losses by 89.0% in the STOCK Wk Open Wk End Change % Q3’14. This could not deter investors from the company, as they bid up TICKER change PBC’s value last week. SOGEGH 0.90 0.85 -0.05 -5.56%

The company posted a loss of GH¢4.20 million, higher than GH¢2.22 UTB 0.27 0.26 -0.01 -3.70% million record for the same period last year. Table 4: Laggards for the week

CORPORATE NEWS

GOLDEN STAR RESOURCES (GSR) SECURES MEDIUM TERM LOAN FACILITY: Golden Star Resources has announced that its subsidiary

Golden Star (Wassa) Limited has signed a letter of commitment with Ghana Limited for a facility of US$25 million. The terms EGL, 1.85% PZC, 12.93% include a specific security over plant, machinery and equipment at CAL, 48.28% Wassa.

GOLDEN STAR RESOURCES ANNOUNCES CFO’s RESIGNATION: GGBL, 3.88% GSR has announced that Jeff Swinoga, Executive Vice President and Chief Financial Officer has resigned from the company. The Board of Directors has appointed Andre van Niekerk, Vice President and Controller as the Company’s new Executive Vice President and Chief

Financial Officer.

ANGLOGOLD ASHANTI LIMITED (AGA) DELISTS FROM LONDON UTB, 1.89% STOCK EXCHANGE (LSE): AGA has confirmed the cancellation of its Others, 31.16% ordinary shares and depository interests on the London Stock Exchange

(LSE) with effect from September 22, 2014. Fig 2: Top 5 most liquid equities with respect to volume traded

The securities ceased to be admitted to trading on the main market of the London Stock Exchange plc.

Stock Ticker Year Opening Closing Price @ YTD Gain/Loss (%) Price(GH¢) 9/10/2014 (GH¢) African Champion Industries Ltd. ACI 0.06 0.03 -50.00% AngloGold Ashanti Ltd. AGA 37.00 37.00 0.00% Aluworks Limited ALW 0.05 0.04 -20.00% Ayrton Drug Manufacturing Ltd. AYRTN 0.17 0.17 0.00% Benso Oil Palm Plantation BOPP 3.21 3.75 16.82% Cal Bank Ltd CAL 0.97 0.95 -2.06% Clydestone (Ghana) Ltd. CLYD 0.04 0.03 -25.00% Ltd. CMLT 0.16 0.12 -25.00% Cocoa Processing Co. Ltd. CPC 0.02 0.02 0.00% Ltd. EBG 5.61 7.12 26.92% Limited EGL 1.88 1.65 -12.23% Ecobank Transnational Inc. ETI 0.19 0.30 57.89% Ltd. FML 6.62 4.90 -25.98% Ghana Commercial Bank Ltd. GCB 4.85 5.11 5.36% Ltd. GGBL 6.20 3.12 -49.68% Limited GOIL 0.89 0.99 11.24% Golden Star Resources Ltd. GSR 2.75 2.34 -14.91% Ltd. GWEB 0.04 0.03 -25.00% HFC Bank (Ghana) Ltd. HFC 0.96 1.35 40.63% Mega Africa Capital Ltd MAC 3.10 3.59 15.81% Co. Ltd. MLC 0.38 0.26 -31.58% Ltd. PKL 0.06 0.06 0.00% Ltd. PBC 0.17 0.13 -23.53% PZ Cussons Ghana Ltd. PZ 0.79 0.40 -49.37% Standard Chartered Bank (GH) Ltd.* SCB 14.94 18.27 22.29% SIC Insurance Company Ltd. SIC 0.39 0.43 10.26% Ltd. SPL 0.04 0.03 -25.00% Limited SOGEGH 0.75 0.85 13.33% Sam Woode Ltd. SWL 0.03 0.04 33.33% Trust Bank Ltd. (The Gambia) TBL 0.35 0.31 -11.43% Ltd. TOTAL 5.06 6.10 20.55% Transaction Solutions (Ghana) Ltd. TRANSOL 0.03 0.03 0.00% Tullow Oil Plc TLW 34.98 36.00 2.92% Ghana Ltd. UNIL 18.31 15.74 -14.04% UT Bank UTB 0.45 0.26 -42.22% AngloGold Ashanti Depository Shares AADS 0.52 0.52 0.00% Standard Chartered Bank Preference shares SCB PREF 0.52 0.58 11.54% NewGold Exchange Traded Fund GLD 26.13 22.40 -14.27%

Table 5: Performance of listed equities from year open

CEDI LOSES MARGINALLY CURRENCY MARKET The Cedi was unable to maintain grounds last Thursday after sustaining a positive stance for two consecutive weeks. This follows EXCHANGE RATES BUYING SELLING YTD a poor forecast on Ghana’s outlook by the International Monetary CHANGE Fund (IMF). USDGHS 3.1962 3.1988 47.93%▼

The IMF has forecasted an end of year inflation rate of 18.5% and GBPGHS 5.1331 5.1386 43.76%▼ a 4.5% growth rate for Ghana, far different from the

Government’s target of 13% and 7.1% respectively. This EURGHS 4.0527 4.0544 35.75%▼ marginally affected the Cedi as it lost 0.04% of its holistic value to its trading counterparts. Table 6: Inter-bank indicative rates However, the Cedi’s annual depreciation rate remained unchanged at 40.32% on last week. ▲ year-to-date appreciation ▼ year-to-date depreciation

Cedi-dollar rates unchanged 60.00%

The Cedi was steady against the Dollar during the week as 50.00% quotes by traders on the interbank market averaged GH¢3.20. 40.00% This represented a year-to-date change of 47.93% against the 30.00% Cedi. 20.00% Ghana is expected to open formal negotiations with the 10.00% International Monetary Fund (IMF) this week in Washington DC. This will be the actual negotiation that would lead to Ghana 0.00% reaching a deal with the IMF for possible program. 8 21 3 14271326 8 23 7 20 3 16271124 7 20 2 1529 EURGHS USDGHS GBPGHS This saw investors take a breather on the currency market as they Feb Mar Apr May Jun Jul Aug Sept.Oct displayed a “wait and see” attitude for the outcome of the Fig 3: YTD performance of Pound, Dollar & Euro versus the Cedi negotiation.

Pound plunges in value, despite…… Euro versus Cedi

According to the Office for National Statistics, U.K’s trade deficit The Euro remained vulnerable to bearish sentiment as monetary for the month of August narrowed more than expected, however, easing remained a reality in the Euro-zone and investors looked to the country's net trade position remained widely negative. minimize their risk exposures to the currency. This failed to boost the value of the Euro on the international market. The data released indicated that the U.K. recorded a £1.9 billion ($3.1 billion) deficit in its global trade, which includes both goods This however contradicts the state of the shared currency on the and services, down from a revised £3.1 billion figure in July. local currency market. Thus the Euro erased earlier losses on the inter-bank market after trading at a midrate of GH¢4.0536 This did little to support the Pound on Ghana’s inter-bank market as against the local currency. its annual yield dropped from 44.99% to 43.76% in favour of the

Cedi. The Pound was bought at GH¢5.13 and sold for GH¢5.14 in Consequently, the Euro recorded an annual yield of 35.75% up from 34.88% a fortnight ago. the period under review.

Alice Osei Okrah (Head) Isaac Kwasi Mensah (Analyst)

Email: [email protected] Email: [email protected] Email: [email protected] NB: The data in this report is Thursday on Thursday (w-o-w)