MONTHLY MARKET REPORT www.pentassets.com [email protected] JULY 2018 +233 50 145 3564

Review of events in 's financial market during the month of July 2018

MONTH'S HIGHLIGHTS FAST FACTS Ghana cedi weakens considerably against the US dollar in July; losses 3.65 percent month-on-month on the Interbank Market, extending the currency's depreciation against the US dollar in 9.6% 2018 to 5.94 percent at close of the month. CONSUMER INFLATION GSE Composite Index losses 1.8 percent in July, yielding a year- (JULY 2018) to-date return of 13.6 percent at close of July. Bank of Ghana keeps monetary policy rate unchanged at 17 percent over concerns of short term inflationary pressures. 17% Consumer inflation falls to 9.6 percent in July from 10 percent MONETARY POLICY RATE the previous month.

TREASURY SECURITIES 16.11% Yield on Government of Ghana's one-year note fell for the first GHANA REFERENCE RATE (JULY 2018) time in 2018 during the month, declining by 50 basis points to 14.50 percent per annum. Yields on 91-day T-bill and 182-day T- bill were largely flat. See the table below. 13.31% Closing Yield Month's Chg. YTD Chg. 91-DAY T-BILL RATE 91-Day T-Bill 13.31% -1 bps -3 bps 182-Day T-Bill 13.83% -2 bps -6 bps 1-Year Note 14.50% -50 bps -50 bps -5.94%

Overall, the government raised 3.33 billion cedis during the month, USD/GHS YTD CHANGE about 94 percent of its 3.56 billion cedis target for month. The 91- day treasury bill constituted the highest share of all issue with YTD Change 50%, followed by the 3-year bond with 21 percent and and the I82- +13.6% day treasury bill with 19 percent. See the chart below; GSE COMPOSITE INDEX YTD RETURN (JULY 31) 3 Year Note 21%

DISCLAIMER 1 Year Note 91 Day Bill This report is for general 9% 50% information purposes only.

SOURCES: 182 Day Bill Bank of Ghana, Ghana 19% Statistical Service, Ghana Yield on the 3-year bond rose 50 basis points to 18 percent per Stock Exchange. annum during the month.

www.pentassets.com +233 50 145 3564 MARKET REVIEW (JULY 2018)

INTERBANK FOREIGN EXCHANGE NEWS WRAP The Ghana cedi weakened considerably against the US dollar Bank of Ghana annuls during the month. The currency closed the month at 4.6943, down by 3.65 percent and yielding a year-to-date performance of 5.94 Belstar Capital percent depreciation. Further, the currency depreciated against purchase of control of the British Pound and Euro during the month. On the other hand, ADB the cedi appreciated against the Chinese Yuan. Bank of Ghana has Closing Rate Month's Chg. YTD Chg. canceled the acquisition USD/GHS 4.6943 -3.65% -5.94% of 51 percent of GBP/GHS 6.1569 -3.07% -3.09% Agriculture Development EUR/GHS 5.4945 -3.89% -3.61% Bank by a consortium led CNY/GHS 0.6911 +2.52% -0.58% by U.S. investor Belstar Capital because the stakes had been acquired STOCK MARKET inappropriately. The GSE Composite Index rose 1.8 percent in July, closing the month at 2,931.19 points and yielding a year-to-date return of The Bank of Ghana also 13.6 percent. Market capitalization rose 0.4 percent to approx banned all directors 55.51 billion cedis. Overall, the market recorded 18 gainers and 9 appointed to ADB’s board laggards during the month. by the consortium, it said in a statement. Overview of the stock market during July

Closing Price (GHC) M/M Gain/Loss The central bank said GSE-CI 2,931.19 +1.8% shares acquired by GSE-FSI 2,658.68 +2.9% Belstar and an affiliate, MAJOR WINNERS Starmount, were Republic Bank GhanaC urrent Exchange Rate 1.48 YTD+ C1h2a.1ng%e obtained “under PZ Cussons Ghana Ltd. 0.50 +11.1% questionable Ecobank Transnational Inc. 0.21 +5.0% circumstances” with MAJOR LOSERS funds it had earlier Ltd. 0.01 -50.0% advanced to distressed Produce Buying Co. Ltd. 0.03 -40.0% local lender Unibank. SIC Insurance Company Ltd. 0.30 -23.1%

Bank of Ghana keeps Overview of the stock market in 2018, as at July 31 policy rate at 17 Price (GHC) YTD Gain/Loss percent GSE-CI 2,931.19 +13.6% Bank of Ghana kept its GSE-FSI 2,658.68 +15.1% benchmark interest rate unchanged at 17 percent MAJOR WINNERS Current Exchange Rate YTD Change in July, mindful of the SIC Insurance Co. Ltd. 0.30 +200.0% possible impact on PZ Cussons Ghana Ltd. 0.50 +150.0% inflation of pressure on Co. Ltd. 0.10 +66.7% emerging economies. Ltd. 1.24 +51.2% Ltd. 3.95 +46.8%

www.pentassets.com +233 50 145 3564 MARKET REVIEW (JULY 2018)

Pent Assets introduces Overview of the stock market in 2018, as at July 31 two new collective Price (GHC) YTD Gain/Loss investment schemes. MAJOR LOSERS Pent Assets, a leading Starwin Products Ltd. 0.01 -66.7% indigenous investment Produce Buying Co. Ltd. 0.03 -50.0% firm, has introduced two Aluworks Ltd. 0.09 -43.8% new investment products. Tullow Oil Plc 12.00 -30.0% The products, namely Ltd. 13.76 -22.3% Pent Educational Fund (Pent Edufund) and Pent Ahotor Fund, are open ended collective investment schemes and will invest in money DISCLAIMER market instruments.

This report is for general information purposes only and is not intended as a recommendation Pent Edufund aims to or an offer or solicitation for the purchase or help clients plan for the sale of any security. Any person considering an educational needs of investment should consider the their children and appropriateness of the investment having dependents whereas Pent regard to their objectives, financial situation, Ahotor aims to help or needs, and should seek independent advice on the suitability or otherwise of a particular clients care for their next investment. financial need.

SOURCES Bank of Ghana, Ghana Statistical Service, , World Bank, Bloomberg, Reuters.

ABOUT PENT ASSET We are an indigenous investment firm licensed by the Securities and Exchange Commission (SEC) and the National Pensions Regulatory Authority (NPRA) to provide investment advisory and fund management services.

CONTACT James Adjei Barimah +233 50 145 3564 / +233 20 671 47456 [email protected] / [email protected]

www.pentassets.com +233 50 145 3564