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

13th August, 2015

GSE DIPS FURTHER STOCK MARKET Despite the improved market activities on the Ghana Stock INDICATORS WEEK WEEK END CHANGE Exchange (GSE), benchmark indices dipped further due to the OPEN magnitude losses recorded over the period. Shares of Standard Market Capitalization Chartered (SCB), HFC Bank (Ghana) Limited (HFC), (GH¢'million) 62,701.62 63,143.22 0.70% African Champion Limited (ACI) and Starwin Product Limited Market Capitalization (US$'million) 16,849.16 16,302.60 -3.24% (SPL) were largely behind the market’s sluggish performance.

Volume traded (shares) 738,430.00 1,953,051.00 164.49% The broader market, thus the GSE Composite Index (GSE-CI) which tracks the performance of the entire market, saw its level Value Traded (GH¢) 1,035,394.09 973,598.96 -5.97% declined by 0.33% to close at a year-to-date loss of 4.09%. Value Traded (US$) 278,230.77 251,368.11 -9.65% Similarly, the Financial Stocks Index (GSE-FSI) which measures Table 1: Market Summary the performance of financial stocks dipped by 0.82% in level INDEX ANALYSIS to settle at a year-to-date loss of 2.51%. On the contrary, the SIC-FSL top 15 liquid Index (SIC-FSL T-15) a tracker of the top INDICATORS Closing Week YTD 15 most liquid equities on the GSE improved by 0.04%, to Level Change CHANGE settle at an annual loss of 0.13%.

GSE Composite Index 2,168.50 -0.33% -4.09% The cumulative value of the Ghana stock market dropped to

SIC-FSL Top 15 Index 3,938.10 0.04% -0.13% GH¢63.14 billion from GH¢62.70 billion recorded the previous week. In dollar terms, the total value of the market stood at GSE Financial Stocks Index 2,187.30 -0.82% -2.51% US$16.30 billion as compared to US$16.85 billion the previous Table 2: Key Stock Market Indices week.

LIQUIDITY

A total of 1.95 million shares exchanged hands last week, which was 164.49% better than the previous week’s figure of 973,598.96 shares. However, the corresponding value traded dipped by 5.7% to GH¢1.04 million as compared to the previous week. This was as a result of concentration of market activities in lower priced equities.

On the whole, the Consumer Goods sector accounted for 67.51% of the total traded shares.

African Champion Limited (ACI) was the most liquid equity on the market accounting for 67.51% of the total number of shares that traded in the week. Cal Bank Limited (CAL) by virtue of its higher price Fig 1: Year -to -date returns recorded the biggest value traded in the week.

MARKET MOVERS STOCK Wk Open Wk End Change % TICKER change Declining investor confidence affects SCB CAL 0.99 1.00 0.01 1.01% Shareholders of Bank Limited (SCB), saw their EGL 2.00 2.02 0.02 1.00% investment thumped down by 51-pesewas in absolute value last week, closing at GH¢18.29 per share which happened to be the stock’s lowest FML 5.83 5.90 0.07 1.20% price recorded this year. GOIL 1.61 1.69 0.08 4.97% Market analysts have associated the Bank’s free-fall in price to the poor results being churned-out, especially its half-year results (HY’15). SCB SIC 0.15 0.16 0.01 6.67% posted a net profit decline of 34.0% in HY’15 as compared to the same SOGEGH 0.78 0.86 0.08 10.26% period last year. The bank’s net profit slipped to GH¢72.97 million from GH¢110.55 million previously. TOTAL 5.35 5.40 0.05 0.93%

Investors’ appetite for SCB shares dropped drastically, as evident in the UNIL 7.30 7.35 0.05 0.68% Bank’s price performance on the Exchange last week. Though, SCB Table 3: Gainers for the week appeared to be trading far below its year-to-date average price of GH¢19.19 per share on the market, the current Bank’s trailing P/E ratio of 13x as compa red to the sector’s average of 6x, tends to suggest further downward price correction in the weeks ahead.

STOCK Wk Open Wk End Change % HFC dips over poor results TICKER change

HFC Bank (Ghana) Limited (HFC) ended last week’s trading as the ACI 0.02 0.01 -0.01 -50.00% second worst performer, following a 15-pesewa decline in its market HFC 1.40 1.25 -0.15 -10.71% value last week, to close at GH¢1.25 a share. This, according to some analyst might be due to the Bank’s disappointing results in the first half PZC 0.35 0.34 -0.01 -2.86% of the year. HFC posted a profit after tax of GH¢13.26 million in HY’15, 34% below the previous year performance within the same SCB 18.80 18.29 -0.51 -2.71% period. SPL 0.04 0.03 -0.01 -25.00%

The result appeared to have forced investors to disinvest at a price UTB 0.15 0.14 -0.01 -6.67% lower than expected. At the current price, the stock is trading at 25% Table 4: Laggards for the week premium of the sector’s average trailing P/E ratio of 6x, suggesting the possibility of downward price correction on the market.

CORPORATE NEWS

ECOBANK GHANA LIMITED (EBG) APPOINTS DIRECTORS: EBG has appointed Mr. Terence Darko as the new chair of the Bank’s Board. Mr. Martin Eson-Benjamin has also been appointed to serve on the Board as a non-executive Director of the Bank.

th The appointment took effect on the 4 of August, 2015.

Fig 2: Top 5 most liquid equities with respect to volume traded

Stock Ticker Year Opening Closing Price @ YTD Gain/Loss (%) Price(GH¢) 13/08/2015 (GH¢) African Champion Industries Ltd. ACI 0.02 0.01 -50.00% AngloGold Ashanti Ltd. AGA 37.00 37.00 0.00% Aluworks Limited ALW 0.02 0.06 200.00% Ayrton Drug Manufacturing Ltd. AYRTN 0.18 0.18 0.00% Benso Oil Palm Plantation BOPP 4.10 4.20 2.44% Cal Bank Ltd CAL 1.01 1.00 -0.99% Clydestone (Ghana) Ltd. CLYD 0.03 0.03 0.00% Ltd. CMLT 0.12 0.12 0.00% Cocoa Processing Co. Ltd. CPC 0.02 0.02 0.00% Ltd. EBG 7.60 8.14 7.11% Limited EGL 1.75 2.02 15.43% Ecobank Transnational Inc. ETI 0.28 0.30 7.14% Ltd. FML 5.25 5.90 12.38% Ghana Commercial Bank Ltd. GCB 5.30 4.14 -21.70% Ltd. GGBL 3.20 2.74 -14.38% Limited GOIL 1.05 1.69 60.95% Golden Star Resources Ltd. GSR 2.34 1.99 -14.96% Ltd. GWEB 0.03 0.02 -33.33% HFC Bank (Ghana) Ltd. HFC 1.50 1.25 -16.67% Mega Africa Capital Ltd MAC 4.50 5.50 22.22% Co. Ltd. MLC 0.28 0.17 -39.29% Ltd. PKL 0.06 0.05 -16.67% Ltd. PBC 0.12 0.12 0.00% PZ Cussons Ghana Ltd. PZ 0.30 0.34 13.33% * Standard Chartered Bank (GH) Ltd. SCB 20.35 18.29 -10.12% SIC Insurance Company Ltd. SIC 0.37 0.16 -56.76% Ltd. SPL 0.02 0.03 50.00% Limited SOGEGH 1.00 0.86 -14.00% Sam Woode Ltd. SWL 0.04 0.04 0.00% Trust Bank Ltd. (The Gambia) TBL 0.24 0.32 33.33% Ltd. TOTAL 6.10 5.40 -11.48% Transaction Solutions (Ghana) Ltd. TRANSOL 0.03 0.03 0.00% Tullow Oil Plc TLW 34.99 33.00 -5.69% Unilever Ghana Ltd. UNIL 10.70 7.35 -31.31% UT Bank UTB 0.25 0.14 -44.00% AngloGold Ashanti Depository Shares AADS 0.52 0.52 0.00% Standard Chartered Bank Preference shares SCB PREF 0.58 0.69 18.97% NewGold Exchange Traded Fund GLD 35.80 47.00 31.28% Samba Foods Ltd SAMBA 0.73 0.73 0.00% Meridian Marshalls Holding Company MMH 0.11 0.11 0.00% Hords Limited HORDS 0.05 0.06 20.00%

Table 5: Performance of listed equities from year open

CURRENCY MARKET CEDI FALLS AS INFLATION RISES

Rising inflation left the local currency trailing for yet another week, despite the central bank’s measure to curtail the fall in the Cedi. EXCHANGE RATES BUYING SELLING YTD Inflation for the month of July climbed from 17.1% in June to 17.9% CHANGE as reported by the Ghana Statistical Service (GSS). The rise in USDGHS 3.8712 3.8751 21.03%▼ inflation, according to the statistical service, was driven by utility price adjustments. Food inflation rose to 7.6% while non-food GBPGHS 6.0317 6.0397 21.22%▼ inflation recorded a rate of 24.6%, moving up 1.0% from June 2015. EURGHS 4.3118 4.3156 10.73%▼

Consequently, the Cedi lost 4.47% of its holistic value to its major Table 6: Inter-bank indicative rates trading partners to settle at a year-to-date loss of 17.84%.

▲ year-to-date appreciation ▼ year-to-date depreciation

Dollar maintains momentum

Profit-taking by investors who seemed to have disinvested from the Cedi to seek better returns in the Dollar, saw the Cedi lose 4.08%

of its value to the greenback.

Strong demand for the greenback continues to be the order of the day as the Cedi continues to cripple in the face of its major

trading currencies.

The Dollar recorded an annual return of 21.03% after trading at a midrate of GH¢3.87 on the interbank market.

Fig 3: YTD performance of Pound, Dollar & Euro versus the Cedi

Pound hits GH¢6.00 Cedi loses to Euro The British Pound experienced some downside pressure on the The Euro held firm its ground on the inter-bank market as it international market following the increased expectations that the appreciated by 6.04% to an average of GH¢4.3156 last week. Bank of England was not in a position to raise interest rates. The performance of the Euro which often mimics trading on the However, the Pound remained buoyant on the Ghana’s inter-bank, international market was no different last week as German’s trading between GH¢6.0317 and GH¢6.0397, last week. second quarter growth estimates added support for the Euro as As a result, the Cedi lost 4.51% of its value against the British the country’s annualised growth rate increased. German Q2 Gross Pound, increasing its deficit this year from the previous week’s Domestic Product (GDP) increased by 0.5% to 1.6% from 1.1% yield of 15.99% to 21.22% on Thursday. over the quarter.

This saw the annual yield of the common currency rally from 4.42% a fortnight ago to 10.73% on Ghana’s currency market in the period under review.

Alice Osei Okrah (Head) Email: [email protected] Isaac Kwasi Mensah (Analyst) Email: [email protected] Email: [email protected] NB: The data in this report is Thursday on Thursday (w-o-w)