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

30th October, 2014

STOCK MARKET STRONG THIRD QUARTER RESULTS BOOST MARKET’S PERFORMANCE

INDICATORS WEEK OPEN WEEK END CHANGE Activities on the (GSE) intensified last week, as impressive third quarter (Q3’2014) results by listed Market Capitalization (GH¢ companies’ fuelled demand for shares. In the light of the 'million) 64,284.41 64,701.81 0.65% Market Capitalization (US$' above, the yield on the benchmark equity index settled at million) 20,115.91 20,247.79 0.66% 28.82 points which was better than previous week’s level.

Volume traded (shares) 1,107,060.00 1,425,617.00 28.78% The rise in performance appeared to have been incited by Value Traded (GH¢) 3,308,430.81 6,168,237.49 86.44% the release of better-than-expected Q3’2014 earnings reported by listed companies over the week. Companies like Value Traded (US$) 1,035,275.78 1,930,288.68 86.45% GCB Bank limited (GCB), CAL Bank Limited, Societe General Table 1: Market Summary (Ghana) Limited (SOGEGH), Limited, INDEX ANALYSIS Ghana Limited (EBG), Ecobank Transnational Incorporated and Starwin Product Limited (SPL) showed some positive INDICATORS Closing Week YTD bottom-line performances per their Q3’14 results despite the Level Change CHANGE incomparable high cost of operations in that period. Investors, in view of the aforementioned increased their bids for shares, GSE Composite Index 2,249.27 1.30% 4.85% as prices of equities push up in that regard.

SIC-FSL Top 15 Index 4,169.43 2.63% 20.65% In effect, the yield on the GSE Composite index closed at GSE Financial Stocks Index 2,192.90 1.77% 22.74% 4.85% from 3.51% a fortnight ago. Similarly, the yield on Table 2: Key Stock Market Indices financial stocks (GSE-FSI) and liquid stocks (SIC-FSL T-15) also went up by 20.61% and 17.56% each, to close the week at LIQUIDITY 22.74% and 20.65% respectively.

Total shares traded were comparatively better than the previous week’s activities . The aggregate volume of shares traded jumped by 28.78% to settle at 1.43 million shares, corresponding value traded also increased by 86.44% to settle at 6.17 million.

Market activities were hugely centered within the financial stocks, as the sector contributed a total 1.30 million of total shares traded which represented 90.99% of the traded shares. GCB Bank Limited recorded the highest activity in the week, with a contribution of 1.0 million, which translates into 70.37% of the total shares trades.

In all, twenty four (24) out of the thirty seven (37) listed equities were active in the week.

Fig 1: Year-to-date returns

MARKET MOVERS

ETI’s returns to GH¢0.34 Ecobank Transnational Incorporated (ETI); the bank with the biggest STOCK Wk Open Wk End Change % TICKER change bank coverage across Africa, emerged the best performing stock market last week. ETI gained 6.25% in value to settle at GH¢0.34 per BOPP 3.84 3.96 0.12 3.13% share due to high demand for the company’s shares. CAL 0.97 0.99 0.02 2.06%

In spite of the 2-pesewas rise in the absolute value of the Bank, the EBG 7.12 7.13 0.01 0.14% stock remained heavily underpriced, as it continued to trade at a discount of 6% of its book value per share price of GH¢0.36 on the ETI 0.32 0.34 0.02 6.25% exchange. GCB 5.24 5.29 0.05 0.95% BOPP touches GH¢3.96 GGBL 3.12 3.13 0.01 0.32%

The agri-business firm, Benso Oil Palm Plantation (BOPP) touched a new PZC 0.39 0.40 0.01 2.56% record price of GH¢3.96 per share last week. The value of the oil palm company increased by 3.13% from GH¢3.84 a week earlier to SCB 18.48 18.83 0.35 1.89%

GH¢3.96 a share last Thursday. SOGEGH 0.83 0.85 0.02 2.41% According to analyst, the rise might have been caused by speculations UTB 0.25 0.26 0.01 4.00% on the world market that prices of palm oil will increase in the coming days. Appetite in the company’s stocks increased, as investors intensified Table 3: Gainers for the week bids for the company’s shares. UTB trims down losses

UT Bank (UTB) last Thursday, rose to GH¢0.26 per share, after it STOCK Wk Open Wk End Change % dropped to GH¢0.25 the week before. TICKER change EGL 1.64 1.63 -0.01 -0.61% The rise appeared to have been triggered by demand for the company’s shares following the huge prospects investors anticipates in FML 4.90 4.89 -0.01 -0.20% the company within a foreseeable future. HFC 1.30 1.29 -0.01 -0.77% Table 4: Laggards for the week

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

Stock Ticker Year Opening Closing Price @ YTD Gain/Loss (%) Price(GH¢) 30/10/2014 (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 0.17 0.00% Benso Oil Palm Plantation BOPP 3.21 3.96 23.36% Cal Bank Ltd CAL 0.97 0.99 2.06% Clydestone (Ghana) Ltd. CLYD 0.04 0.03 -25.00% Ltd. CMLT 0.16 0.12 -25.00% Cocoa Processing Co. Ltd. CPC 0.02 0.01 -50.00% Ecobank Ghana Ltd. EBG 5.61 7.13 27.09% Limited EGL 1.88 1.63 -13.30% Ecobank Transnational Inc. ETI 0.19 0.34 78.95% Fan Milk Ltd. FML 6.62 4.89 -26.13% Ghana Ltd. GCB 4.85 5.29 9.07% Ltd. GGBL 6.20 3.13 -49.52% Limited GOIL 0.89 0.99 11.24% Golden Star Resources Ltd. GSR 2.75 2.34 -14.91% Ltd. GWEB 0.04 0.03 -25.00% HFC Bank (Ghana) Ltd. HFC 0.96 1.29 34.38% Mega Africa Capital Ltd MAC 3.10 3.59 15.81% Co. Ltd. MLC 0.38 0.26 -31.58% Ltd. PKL 0.06 0.06 0.00% Ltd. PBC 0.17 0.14 -17.65% PZ Cussons Ghana Ltd. PZ 0.79 0.40 -49.37% Standard Chartered Bank (GH) Ltd.* SCB 14.94 18.83 26.04% SIC Company Ltd. SIC 0.39 0.43 10.26% Ltd. SPL 0.04 0.03 -25.00% Limited SOGEGH 0.75 0.85 13.33% Sam Woode Ltd. SWL 0.03 0.04 33.33% Trust Bank Ltd. (The Gambia) TBL 0.35 0.30 -14.29% Ltd. TOTAL 5.06 6.10 20.55% Transaction Solutions (Ghana) Ltd. TRANSOL 0.03 0.03 0.00% Tullow Oil Plc TLW 34.98 36.00 2.92% Unilever Ghana Ltd. UNIL 18.31 14.00 -23.54% UT Bank UTB 0.45 0.26 -42.22% AngloGold Ashanti Depository Shares AADS 0.52 0.52 0.00% Standard Chartered Bank Preference shares SCB PREF 0.52 0.58 11.54% NewGold Exchange Traded Fund GLD 26.13 22.40 -14.27%

Table 5: Performance of listed equities from year open

CEDI LOSES ON S&P’s REPORT CURRENCY MARKET Report on Ghana’s credit worthiness by the Standard and Poor’s (S&P) saw the local currency lose its traction against its trading EXCHANGE RATES BUYING SELLING YTD allies last week. The Cedi declined by 0.35% on the interbank CHANGE market. USDGHS 3.1942 3.1968 47.83%▼ The S&P has downgraded Ghana’s ability to pay its debt on time GBPGHS 5.1574 5.1625 44.43%▼ from “B“ to “B-”. This is six levels below investment grade. According to the agency, the downgrade reflects the risks inherent EURGHS 4.0763 4.0794 36.56%▼ in financing Ghana's wide fiscal and current account deficits. Also, Government’s fiscal position is structurally weak, partly due to the

Table 6: Inter-bank indicative rates sharp increase in public sector wages in recent years.

The Cedi therefore declined by 0.30% on the interbank market to ▲ year-to-date appreciation settle at a year-to-date loss of 40.64%. ▼ year-to-date depreciation

Dollar up by 0.08%

Demand for the greenback continues to lose stem on the currency market, bolstering the value of the Cedi.

USDGHS traded at GH¢3.20 last week indicating a depreciation in the value of the Dollar against the Cedi. With a year-to-date return of 47.83% the Dollar lost marginally to the Cedi by 0.01% before the close of trading.

Euro gains on positive data

Fig 3: YTD performance of Pound, Dollar & Euro versus the Cedi The Euro appreciated on the international market after data showed Eurozone prices rising in the month of October. According to Eurostat the region’s inflation rose 0.4% in October, in line with Pound versus Cedi market expectations.

The British Pound declined on the international market as investors The situation was not different on the local market as the Euro pushed back their assessment of when the Bank of England (BoE) regained dominance over the Cedi after appreciating by 0.76% will raise its interest rates. This follows reports of a decline in on the interbank market with a year-to-date rate of 36.56%. consumer confidence for the month of October, from -1 to -2 The Euro closed Thursday’s trading at an average of GH¢4.0779. points.

However, this did not stop the Pound from recording gains on the local currency market. Thus on the inter-bank market, the Pound was exchanged at GH¢5.16, representing an annual yield of 44.43%.

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)