Market Review 1St Quarter, 2017 Pent Assets

Market Review 1st Quarter, 2017 Pent Assets

Economy The first quarter (Q1) of 2017 was an eventful one with The currency also lost 3.7 percent and 3.9 percent to activities including the swearing-in ceremony of the British Pound and Euro, respectively. Ghana’s new government as well as reading of the Interbank Foreign Exchange government’s first budget statement. The budget, Q1 Change (%) YTD Chg. (%) which primarily signals expansionary fiscal policy, seeks USD/GHS 4.3173 -2.7% (DPN) -2.7% (DPN) to grow gross domestic product (GDP) to 6.3 percent GBP/GHS 5.3964 -3.7% (DPN) -3.7% (DPN) and reduce overall fiscal deficit to 6.5 percent of GDP EUR/GHS 4.6164 -3.9% (DPN) -3.9% (DPN) in 2017 through tax cuts. Ghana’s GDP and overall fiscal deficit stood at 3.6 percent and 10.3 percent respectively in 2016, according to provisional figures. Treasury Securities Market

Development of yields on government of Ghana The quarter also saw a monetary policy boost to treasury securities was generally mixed. The yield on growth. The Bank of Ghana through its Monetary 91-day treasury bill rose 108 basis points during the Policy Committee lowered the benchmark policy rate quarter to close at 17.51 percent, yield on 182-day bill by 200 basis points to 23.5 percent. The bank’s fell by to 45 basis points to 17.19 percent and yield on decision was primarily influenced by improved inflation 1-year treasury note fell by 200 basis points to 19.00 outlook and growth concerns. Consumer inflation has percent. gradually trended downwards since March 2016, reaching a 42-month low of 12.8% in March 2017. Treasury Securities Q1 Change (bps) YTD Chg. (%) 91-Day Bill 17.51% 108bps 108bps 182-Day Bill 17.19% -45bps -45bps 1-Year Note 19.00% -200bps -200bps

Overall, the government raised a total of 22.24 billion cedis in Q1. The 91-day bill constituted the highest share with 10.36 billion cedis raised followed by the 15- year bond and 182-day bill with 3.42 billion and 2.61 billion cedis, respectively. Foreign Exchange Market The foreign exchange market was highly volatile during the quarter with the Ghana cedi reaching historic lows against major trading currencies. The currency weakened to a record interbank low of 4.6042 per US dollar in March before retreating to close the quarter at 4.3173. Overall, the currency depreciated by 2.7 percent against the US dollar during the quarter. www.pentassets.com 050-153-0246 Equity Market

The stock market was optimistic in the first quarter of 2017. The benchmark GSE Composite Index gained

175.92 points (10.4 percent) to close the quarter at 1,865.01 points. Overall, the market recorded 11 gainers and 11 losers during the month. Q1 News Wrap:

Capital gains tax exempted from taxation Ghana’s Parliament has approved the Income Tax (Amendment) Bill, 2017. The bill which amends the Income Tax Act, 2015 (Act 896) exempts realizations of gains on investments in securities listed on the Ghana Stock Exchange from taxation till end of 2021.

Govt. appoints new central bank governor Ghana’s president has appointed senior monetary policy expert Dr. Ernest Addison as Bank of Ghana governor. The appointment follows the resignation of GCB Bank Limited was the lead winner in Q1 with 46.1 Dr Abdul-Nashiru Issahaku as governer on Wednesday percent gain followed by Benso Oil Palm Plantation March 29 (effective April 1). Limited, UT Bank Limited and Standard Chartered Bank Ghana with 39.4 percent, 33.3 percent and 26.9 percent Bank of Ghana cuts policy rate by 200 bps. appreciations, respectively. The central bank reduced its monetary policy rate by 200 basis points to 23.5 percent during the bank’s Q1 Top Gainers Monetary Policy Committee meeting on March 24. The Price Gain Chg. (%) decision was influenced by improved inflation outlook GCB Bank Ltd. 5.20 1.64 46.1% and growth concerns. Benso Oil Palm Plantation 2.9 0.82 39.4% Sources: UT Bank Ltd. 0.04 0.01 33.3% Bank of Ghana, Ghana Stock Exchange, Ghana Statistical Service and Reuters.

About Us: CAL Bank Limited was the worst loser with 34.7 percent Pent Asset and Wealth Management Limited is an investment loss followed by Tullow Oil Plc (Ghana), Produce management and advisory firm. We are licensed and regulated as an investment advisor and fund manager by the Securities and Exchange Buying Company and Ayrton Drugs Manufacturing Commission of Ghana. Our services broadly include asset management, with 22.1 percent, 16.7 percent and 16.7 percent losses, corporate finance & advisory, and Research & due diligence. respectively. Disclaimer: This report is for general information purposes only and is not intended as a recommendation or an offer or solicitation for the purchase or sale of Q1 Top Losers any security. Any person considering an investment should consider the Price Loss Chg. (%) appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the CAL Bank Ltd 0.49 -0.26 -34.7% suitability or otherwise of a particular investment.

Tullow Oil Plc (Ghana) 20.94 -5.94 -22.1% Contact: Produce Buying Company 0.05 -0.01 -16.7% James Adjei Barimah Research Analyst Mobile: 050 145 3564 Email: [email protected]