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

21st August, 2014

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

STOCK MARKET GSE DIPS FURTHER Activities on the (GSE) declined

INDICATORS WEEK OPEN WEEK END CHANGE further last week, due to the increased selling pressure on the market. Equities like Aluworks Limited (ALW),

Market Capitalization (GH¢ 'million) 63,386.93 63,270.73 -0.18% Ghana Limited (UNIL), UT Bank Limited (UTB) and Ghana Commercial Bank Limited (GCB) were amongst some of the Market Capitalization (US$' million) 20,894.26 20,676.71 -1.04% hardest-hit stocks on the Bourse within the period. Volume traded (shares) 2,701,552.00 1,237,923.00 -54.18% Value Traded (GH¢) 3,273,362.54 7,143,335.63 118.23% Expectedly, the broader market, thus the GSE Composite Index (GSE-CI) which tracks the performance of the entire Value Traded (US$) 1,079,000.08 2,334,423.41 116.35% market, saw its level declined by 1.32% over the period. Table 1: Market Summary The GSE-CI closed at an annual yield of 3.08% compared to the 4.46% the week before. The Financial Stocks Index INDEX ANALYSIS (GSE-FSI) and the SIC-FSL top 15 Index (SIC-FSL T-15) which also measures the performance of financial stocks INDICATORS Closing Week YTD and liquid stocks respectively, declined by 1.05% each to Level Change CHANGE close at year-to-date returns of 18.47% and 16.23%

GSE Composite Index 2,211.26 -1.32% 3.08% appropriately.

SIC-FSL Top 15 Index 4,016.52 -1.05% 16.23% The cumulative value of the Ghanaian market also dropped to GH¢63.27 billion, representing an equivalent declined to GSE Financial Stocks Index 2,116.52 -1.05% 18.47% US$20.68 billion from GH¢63.39 billion and US$20.89 Table 2: Key Stock Market Indices billion a week earlier.

LIQUIDITY

Volumes of shares traded slipped from the previous week’s level 25.00% because of the absence of block trades on the market. In all, a total of 1.24 million shares exchanged hands; representing 54.18% lower 20.00%

than the previous week’s figure. However, corresponding value 15.00% traded saw a significant increase of 118.23% due to activities in higher priced equities like Standard Chartered Bank (SCB) and 10.00% Unilever Ghana Limited (UNIL) in the week. A total of GH¢7.14 5.00% million was recorded.

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Ecobank Transnational Incorporated (ETI) traded 212,516 shares; -

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representing 17.17% of total traded shares whereas Standard -

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12 24 22 Chartered Bank (SCB) emerged the most valuable stock after 12 contributing 53.78% of the week’s net sales. GSE YTD Change GSE-FSI YTD SIC-FSL 15 YTD Change

Fig 1: Year-to-date returns

MARKET MOVERS

STOCK Wk Open Wk End Change % Aluworks hits GH¢0.04 TICKER change Shareholders of the Aluworks Limited (ALW), took advantage of last BOPP 3.40 3.55 0.15 4.41% week’s offers on the exchange to reduce their positions in the aluminium EBG 7.06 7.10 0.04 0.57% company. Market participants saw the offers as an opportunity and hurriedly accepted the GH¢0.04 offered by prospective sellers on the EGL 1.68 1.69 0.01 0.60% bourse. GOIL 0.98 0.99 0.01 1.02% The stock closed as the biggest loser over the week after losing 20.00% of its market value last Thursday. The poor financial health of the SCB 18.00 18.20 0.20 1.11% company over the last few years appeared to be the reason behind the SIC 0.40 0.41 0.01 2.50% stock's poor performance. TLW 35.05 35.10 0.05 0.14% Unilever hit by poor working environment Table 3: Gainers for the week

Market participants showed their displeasure in the management of Unilever Ghana Limited (UNIL) last week, as they bid-down the company’s value by 3.41% to settle at GH¢17.00 per share. Investors appeared deeply worried by the company’s uninspiring half-year STOCK Wk Open Wk End Change % results. TICKER change

According to the management, the poor performance was due to the ALW 0.05 0.04 -0.01 -20.00% bad business environment that the company encountered within the FML 5.50 5.39 -0.11 -2.00% period. Revenue for the company saw a growth of 17.9% in the half year, from GH¢158.4 million to GH¢186.8 million. However, operating GCB 4.88 4.50 -0.38 -7.79% cost remained a challenge in the face of higher depreciation of the cedi GGBL 2.50 2.45 -0.05 -2.00% and inflation. The company posted an operating loss of GH¢6.5 million. MLC 0.30 0.29 -0.01 -3.33%

SOGEGH 1.00 0.99 -0.01 -1.00%

TOTAL 6.30 6.15 -0.15 -2.38%

CORPORATE NEWS UNIL 17.60 17.00 -0.60 -3.41% UTB 0.38 0.33 -0.05 -13.16% UNILEVER GHANA LIMITED APPOINTS NEW DIRECTOR: UNIL has Table 4: Laggards for the week appointed Mr. Miguel Angel Jimenez Marquez as the new company secretary, with effect from July 24th, 2014. Mr Marquez replaces Mrs. Victoria Kayaga Kiggundu as Finance Director of the company. UTB, 14.41% SCB, 17.05% ALW, 8.16%

ANGLOGOLD INTENDS TO DELIST AND CANCELS SECURITIES FROM GOIL, 6.02% THE LONDON STOCK EXCHANGE (LSE): AngloGold Ashanti Limited has hinted of a resolution by the Company’s Board of Directors to cancel the

listing of its ordinary shares and depository interests on the London Stock Exchange (LSE).

The main reason for the voluntary delisting according to the company is because of the lack of liquidity on the LSE and the minimum number of securities held in the UK. ETI, 17.17% Others, 37.20%

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

Stock Ticker Year Opening Closing Price @ YTD Gain/Loss (%) Price(GH¢) 21/08/2014 (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 0.18 5.88% Benso Oil Palm Plantation BOPP 3.21 3.55 10.59% Cal Bank Ltd CAL 0.97 0.88 -9.28% Clydestone (Ghana) Ltd. CLYD 0.04 0.03 -25.00% Ltd. CMLT 0.16 0.14 -12.50% Cocoa Processing Co. Ltd. CPC 0.02 0.01 -50.00% Ghana Ltd. EBG 5.61 7.10 26.56% Limited EGL 1.88 1.69 -10.11% Ecobank Transnational Inc. ETI 0.19 0.33 73.68% Ltd. FML 6.62 5.39 -18.58% Ghana Commercial Bank Ltd. GCB 4.85 4.50 -7.22% Ltd. GGBL 6.20 2.45 -60.48% Limited GOIL 0.89 0.99 11.24% Golden Star Resources Ltd. GSR 2.75 2.34 -14.91% Ltd. GWEB 0.04 0.04 0.00% 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 0.29 -23.68% Ltd. PKL 0.06 0.06 0.00% Ltd. PBC 0.17 0.12 -29.41% PZ Cussons Ghana Ltd. PZ 0.79 0.45 -43.04% Standard Chartered Bank (GH) Ltd.* SCB 14.94 18.20 21.82% SIC Company Ltd. SIC 0.39 0.41 5.13% Ltd. SPL 0.04 0.04 0.00% Limited SOGEGH 0.75 0.99 32.00% Sam Woode Ltd. SWL 0.03 0.04 33.33% Trust Bank Ltd. (The Gambia) TBL 0.35 0.24 -31.43% Ltd. TOTAL 5.06 6.15 21.54% Transaction Solutions (Ghana) Ltd. TRANSOL 0.03 0.03 0.00% Tullow Oil Plc TLW 34.98 35.10 0.34% Unilever Ghana Ltd. UNIL 18.31 17.00 -7.15% UT Bank UTB 0.45 0.33 -26.67% AngloGold Ashanti Depository Shares AADS 0.52 0.52 0.00% Standard Chartered Bank Preference shares SCB PREF 0.52 0.55 5.77% NewGold Exchange Traded Fund GLD 26.13 22.40 -14.27%

Table 5: Performance of listed equities from year open

CEDI FAILS TO CATCH-UP WITH PREVIOUS

CURRENCY MARKET PERFORMANCE The local currency lost its traction against its major trading partners EXCHANGE RATES BUYING SELLING YTD on the currency market as investors’ confidence in the currency CHANGE continues to wane. USDGHS 3.0587 3.0613 41.57%▼ The Cedi retreated from its four week rally on the interbank GBPGHS 5.0900 5.0958 42.55%▼ market after giving up 0.60% of its composite value last Thursday. This loss can be linked to the gains recorded by the Dollar as it EURGHS 4.0645 4.0685 36.15%▼ advanced most with the British Pound rallying behind it.

As a result, the Cedi settled at a year-to-date loss of 37.06% Table 6: Inter-bank indicative rates before close of trading.

▲ year-to-date appreciation ▼ year-to-date depreciation 50.00%

Dollar rises in value 40.00%

The U.S. Dollar retreated from its dormant state on Thursday as 30.00% investors began to reduce their betting in local currency to seek 20.00% comfort in the Dollar as a safe haven.

10.00% The greenback had maintained a stalemate position against the Cedi for a while after continuous appreciations on the interbank 0.00% market since the beginning of the year. 8 17 28 6 17 26 10 19 28 8 17 30 12 21 2 11 20 2 11 22 1 12 21 EURGHS USDGHS GBPGHS A Dollar was sold for GH¢3.06 on the interbank market last Feb Mar Apr May Jun Jul Aug Thursday and this reflected an appreciation in the value of the Fig 3: YTD performance of Pound, Dollar & Euro versus the Cedi Dollar against the Cedi. As a result, the Cedi slipped by 0.87% versus the greenback, resulting in a year-to-date change of 41.57%. Euro versus Cedi

Euro-area consumer confidence declined in August, as escalating Speculation rallies round Pound’s strength political tensions in Ukraine threatened the region’s already faltering economic recovery. The Pound pointed north on the international market, boosted by speculation that the Bank of England ((BoE) was moving toward According to the European Commission, consumer sentiment in the raising rates. region decreased from -8.4 in July to -10. This saw the shared currency shed off some values against a basket of currencies on This was after BoE has announced that two of its policy makers the international market. wanted an interest -rate increase this month. The two voted to raise the benchmark rate by 25 basis points from a record-low However, investors on the Ghanaian market were in favor of the 0.5%, marking the first split on rates in more than three years. Euro seeing it head for another weekly gain verses the Cedi as it rose by 0.17% in value.. This had an impact on the local market also, as the Pound regained dominance over the Cedi after appreciating by The bloc’s currency traded at an average of GH¢4.0665 and 0.57% on the wholesale market. The Sterling closed Thursday’s settled at an annual yield of 36.15%. trading at GH¢5.09 per Pound, with a year-to-date return of 42.55%.

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)