Half-Year Market Review [H1-2017]

July 2017

Economic Overview

GDP Growth: Aided by increased crude oil production, the economy expanded by 6.6 percent on year-on-year basis in the first quarter of 2017 compared to 4.4 percent in the same period in 2016. The non-oil sector GDP growth stood at 3.9 percent relative to 6.3 percent recorded for the same period in 2016.

Economic growth has been weak since 2014, with GDP staying around 4 percent, due to lower prices for Monetary Policy Easing: The of reduced commodity exports and a fiscal crisis. The government its policy rate by 300 basis points during the first half has projected a GDP growth of 6.3 percent in 2017. of the year citing positive inflation outlook and a Fiscal Deficit: Central government operations for the relatively stable Ghana cedi. The benchmark interest first half of the year was largely in line with targets in rate was lowered 200 basis points in March to 23.50 the 2017 budget. Fiscal operations for the first half percent and further lowered by 100 basis points in May resulted in a cash deficit of 2.7 percent of GDP, against to 22.50 percent. a set target of 3.5 percent, mainly due to expenditure controls even as revenue fell below target. Total Fixed Income Market expenditure stood at 23.0 billion cedis against a target of 27.6 billion cedis whereas total revenue and grants Yields on GoG domestic securities trended downwards stood at 17.5 billion cedis against a target of 20.5 during the first half of the year, signaling a drive billion cedis. towards low interest rate regime. The 91-day and 182- day bills lost 450 and 475 basis points to close the first The government plans to cut its fiscal deficit to 6.3 half of the year at 11.93 and 12.90 percentage points, percent of GDP in 2017 from 9.3 percent in 2016. respectively. The 1-year note lost 600 basis points to 15

percent. Falling Inflation: Consumer price inflation steadily trended downwards in the first half of the year partly Treasury Securities due to policy tightness and relative stability in the June 2017 December 2016 Change (bps) exchange rate. Headline inflation stood at 12.1 percent 91-Day Bill 11.93% 16.43% -450% in June, the lowest since September 2013. 182-Day Bill 12.90% 17.64% -474%

The government of Ghana aims to reduce inflation to 1-Year Note 15.00% 21.00% -600% 11.2 percent by end of the year. 2-Year Bond 17.00% 22.50% -550% 3-Year Bond 18.50% 24.00% -550%

www.pentassets.com 050-153-0246 Currency Market The worst losers during the first half of the year were Company, PBC Limited and Starwin The Ghana cedi was relatively stable during the first Products Limited with 33.3 percent loss each. half of the year. The currency depreciated on cumulative basis by 3.7 percent, 8.3 percent and 10.8 Top Losers (H1 2017) Price Loss % Chg. percent against the US dollar, the British pound and Mechanical Lloyd Co. Ltd. 0.10 -0.05 -33.3% the euro respectively in the interbank market. PBC Ltd. 0.04 -0.02 -33.3%

Interbank Foreign Exchange Ltd. 0.10 -0.01 -33.3% HFC Bank (Ghana) Ltd. 0.55 -0.2 -26.7% June 2017 December 2016 Change (%) Tullow Oil Plc 20.94 -5.94 -22.1% USD/GHS 4.3629 4.2002 -3.7% GBP/GHS 5.6651 5.1965 -8.3% EUR/GHS 4.9750 4.4367 -10.8% Sources: , , Ghana Statistical Service and Reuters. Equity Market Disclaimer: This report is for general information purposes only and is not intended The Ghana stock market was optimistic in the first half as a recommendation or an offer or solicitation for the purchase or sale of of the year. The benchmark Ghana Stock Exchange any security. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, Composite Index closed at 1964.55 points in June 2017 financial situation, or needs, and should seek independent advice on the from 1689.09 points in December 2016, gaining 16.3 suitability or otherwise of a particular investment. percent on year-to-date basis. Total market capitalization rose 12.84 percent to 59.46 billion cedis. About Us: Pent Asset and Wealth Management Limited is an investment management and advisory firm. We are licensed and regulated as an investment advisor and fund manager by the Securities and Exchange Commission of Ghana. Our services broadly include asset management, corporate finance & advisory, and Research & due diligence.

Contact: James Adjei Barimah Research Analyst Mobile: 050 145 3564 Email: [email protected]

Overall, the market recorded 14 gainers and 15 losers during the first half of the year. UT Bank Limited, Benso Oil Palm Plantation Limited and GOIL were the lead gainers with 133.3 percent, 111.5 percent and 70 percent gains respectively.

Top Winners (H1 2017) Price Gains % Chg. UT Bank Ltd. 0.07 0.04 133.3% Benso Oil Palm Plantation 4.4 2.32 111.5% Ltd. 1.87 0.77 70.0% GCB Bank Ltd. 5.2 1.64 46.1% Bank Gh. Ltd. 17.04 4.86 39.9% www.pentassets.com 050-153-0246 Performance of Equities during First Half (H1) of 2017 Closing Price H1 2017 H1 2017 Market Cap. Dividend Yield Equities Share Code (June 2017) Change Return (%) (GHC million) (%) AngloGold Ashanti Depository Shares AADS 0.48 -0.04 -7.69% 46.99 0.0% ACCESS 3.8 -0.3 -7.32% 448.75 African Champion Ltd ACI 0.01 0 0.00% 0.37 0.0% Agricultural Development Bank ADB 3.83 0 0.00% 884.44 AngloGold Ashanti Ltd. AGA 37 0 0.00% 15,068.06 0.0% Aluworks Ltd. ALW 0.16 0.02 14.29% 37.87 0.0% Ayrton Drug Manufacturing Ltd. AYRTN 0.1 -0.02 -16.67% 21.50 0.0% Benso Oil Palm Plantation BOPP 4.4 2.32 111.54% 153.12 1.9% Cal Bank Ltd CAL 0.85 0.1 13.33% 466.02 9.7% Clydestone (Ghana) Ltd. CLYD 0.03 0 0.00% 1.02 0.0% Ltd. CMLT 0.12 0 0.00% 0.82 6.3% Cocoa Processing Co. Ltd. CPC 0.02 0 0.00% 40.76 0.0% Ltd. EGH 7 0.6 9.38% 2,052.60 12.0% Ltd. EGL 2.39 -0.01 -0.42% 318.11 2.1% Ecobank Transnational Inc. ETI 0.13 0.03 30.00% 3,128.81 2.8% Ltd. FML 11.82 0.68 6.10% 1,373.57 1.4% GCB Bank Ltd. GCB 5.2 1.64 46.07% 1,378.00 8.7% Ltd. GGBL 1.49 -0.14 -8.59% 458.32 0.0% NewGold GLD 38.8 0 0.00% 15.52 Ghana Oil Company Ltd. GOIL 1.87 0.77 70.00% 732.78 1.8% Golden Star Resources Ltd. GSR 1.95 0 0.00% 506.42 0.0% Ltd GWEB 0.01 0 0.00% 0.35 0.0% HFC Bank (Ghana) Ltd. HFC 0.55 -0.2 -26.67% 163.58 7.1% Hords Ltd HORDS 0.1 0 0.00% 11.49 Intravenous Infusions Ltd. IIL 0.08 -0.01 -11.11% 18.13 Mega African Capital Ltd MAC 6 0 0.00% 59.69 1.0% Mechanical Lloyd Co. Ltd. MLC 0.1 -0.05 -33.33% 5.01 5.3% Meridian Marshalls MMH 0.11 0 0.00% 10.57 PBC Ltd. PBC 0.04 -0.02 -33.33% 19.20 12.6% Ltd. PKL 0.05 0 0.00% 1.67 0.0% PZ Cussons Ghana Ltd. PZC 0.2 -0.02 -9.09% 33.60 0.3% Samba Foods Ltd. SAMBA 0.65 -0.07 -9.72% 3.88 Standard Chartered Bank Gh. Ltd. SCB 17.04 4.86 39.90% 1,968.24 2.3% Standard Chartered Bank Pref. Shares SCB PREF 0.85 0.1 13.33% 14.86 10.0% SIC Company Ltd. SIC 0.11 -0.01 -8.33% 21.52 0.0% Ltd. SOGEGH 0.75 0.13 20.97% 321.80 9.5% Starwin Products Ltd. SPL 0.02 -0.01 -33.33% 5.20 0.0% Sam Woode Ltd. SWL 0.04 0 0.00% 0.87 30.0% Trust Bank Gambia Ltd TBL 0.25 -0.01 -3.85% 50.00 9.6% Tullow Oil Plc TLW 20.94 -5.94 -22.10% 28,769.25 0.5% Ltd. TOTAL 2.22 0.24 12.12% 248.36 2.3% Transaction Solutions (Ghana) Ltd. TRANSOL 0.03 0 0.00% 2.40 0.0% Unilever Ghana Ltd. UNIL 9 0.49 5.76% 562.50 4.7% UT Bank Ltd. UTB 0.07 0.04 133.33% 31.94 0.0% www.pentassets.com 050-153-0246