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

17th April, 2014

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

STOCK MARKET UPSIDE RISKS DRIVE DOWN MARKET PERFORMANCE

INDICATORS WEEK OPEN WEEK END CHANGE

The remained highly volatile last Market Capitalization (GH¢ 'million) 58,284.06 57,797.71 -0.83% week, as investors took advantage of the huge offer on the market to beat down their bids. This accounted for the Market Capitalization (US$' million) 21,483.25 20,954.11 -2.46% large presence of price-cuts we saw last week compared Volume traded (shares) 2,769,464.00 5,861,882.00 111.66% to gainers. Value Traded (GH¢) 3,802,180.37 4,990,830.77 31.26% In fact, the numerous offers on the market have become Value Traded (US$) 1,401,467.15 1,809,386.50 29.11% necessary due to “upside risk factors” like the weakening Table 1: Market Summary Cedi, increase profit-taking, unattractive interest rates and inflationary pressure in the economy. These considerations INDEX ANALYSIS made shareholders to sell-off some of their holdings in listed companies, in search of “safer investments” to INDICATORS Closing Week YTD possibly neutralise the dollar-effect. Level Change CHANGE In effect, the broader market (GSE-Composite Index) GSE Composite Index 2,272.40 -2.76% 5.93% declined 2.76%, bringing the annual yield of listed SIC-FSL Top 15 Index 3,749.98 -3.12% 8.52% companies to 5.93% from 8.94% a week earlier.

GSE Financial Stocks Index 1,934.75 -4.04% 8.29% Similarly, the financial stocks (GSE-Financial Stocks Index) Table 2: Key Stock Market Indices and SIC-FSL Top 15 Index; which measures the fifteen (15) most liquid stocks on the GSE also dropped 4.04% and 3.12% of their previous levels to close at 1,934.75 points and 3,749.98 points respectively, representing a year-to- date return of 8.29% and 8.52% accordingly. LIQUIDITY

Total shares traded were comparatively better than the previous 25.00% week’s figure, following a 3.5 million block trade in Sam 20.00% Woode’s shares last Tuesday. Effectively, 5.86 million shares 15.00% exchanged hands, representing 111.7% increase in performance. This was valued at GH¢4.99 million which was also 10.00% 31.26% bigger than the previous value. 5.00%

0.00%

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Undoubtedly, Sam Woode Limited (SWL) made the biggest 14

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Jan Jan Jan Jan Jan

contribution to shares traded over the week in one single trade, Jan

Feb Feb Feb Feb Feb Apr Apr Apr

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Mar Mar Mar Mar

Mar

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2 8

5 3 9

5

14 20 24 30

17 21 27 15

representing 60.49%. 11

12 18 24 28

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 % SG-Ghana returns to GH¢0.75 TICKER change

A 16.67% loss in Limited returned the SPL 0.03 0.04 0.01 33.33% stock’s value to its year-opening price of GH¢0.75 per share on the Table 3: Gainers for the week Ghana Stock Exchange after rising as high as GH¢1.18 per share in late February.

At the current price, investors are at par with the company’s market STOCK Wk Open Wk End Change % value from the beginning of the year. TICKER change AYRTN 0.18 0.17 -0.01 -5.56% BOPP loses further steam BOPP 3.10 2.90 -0.20 -6.45% The palm oil producer; Benso Oil Palm Plantation (BOPP) saw its share price slip to GH¢2.90 on the GSE last week from its week CAL 0.88 0.87 -0.01 -1.14% open value of GH¢3.10 per share. The stock started the year at a EBG 6.50 6.20 -0.30 -4.62% quoted price of GH¢3.21 a share, which means the stock has lost 9.66% of its market value so far. EGL 2.39 2.29 -0.10 -4.18%

The fall has been as a result of a combination of profit-taking and a ETI 0.23 0.22 -0.01 -4.35% gloomy economic outlook, according to most analysts. GCB 4.05 4.00 -0.05 -1.23%

GGBL 5.87 5.78 -0.09 -1.53% CORPORATE NEWS SCB 19.70 18.92 -0.78 -3.96% SIC 0.50 0.43 -0.07 -14.00% LIMITED (FML) TO HOLD ANNUAL GENERAL MEETING (AGM): Directors of FML has slated Wednesday, 7th May, 2014 as the SOGEGH 0.90 0.75 -0.15 -16.67% date to hold this year’s AGM. The venue will be the National Theatre,

Accra at 11:00 am prompt. TOTAL 6.56 6.53 -0.03 -0.46%

ENTERPRISE GROUP LIMITED (EGL) ANNOUNCES ANNUAL UNIL 18.09 18.08 -0.01 -0.06% GENERAL MEETING (AGM): EGL has scheduled Thursday, 22nd May, 2014 for its 4th Annual General Meeting (AGM) to be held at the UTB 0.45 0.43 -0.02 -4.44% Table 4: Laggards for the week Ghana College of Physicians and Surgeons at 10:30 am prompt. The agenda of the business will include the following:

1. Accept 2013 Financial Statements and the auditor’s report thereon. 2. Declare Dividend for the year ended 2013 SWL, 60.49% 3. Authorize Directors to fix remuneration of the Auditors. 4. Approval of Directors remuneration GCB, 12.62% MAC ANNONUCES A SUCCESSFUL SHARE OFFER: Mega African Capital (MAC) has been listed on the Ghana Stock Exchange (GSE) following a successfully offer for subscription which was opened between 10 to 28 March, 2014. The company by the offer has allotted

1,333,334 ordinary shares of GH¢3.00 each prospective investors. Successful applicants will be allotted on the 22nd April, 2014 and can GOIL, 11.00% begin trading on the 23rd April, 2014. Others, 8.06%

REPUBLIC BANK TO MAKE MANDATORY OFFER TO ALW, 2.53% ETI, 5.31% SHAREHOLDERS: The Republic Bank of Caribbean has announced its decision to make an offer to shareholders of HFC Bank. This will enable Fig 2: Top 5 most liquid equities with respect to volume traded the Bank to become the majority shareholder of HFC Bank and possibly take over the institution.

According to the Executive Director in charge of Risk Management at Republic Bank, they have received approval from Bank of Ghana move ahead with the offer.

Stock Ticker Year Opening Closing Price @ YTD Gain/Loss (%) Price(GH¢) 17/04/2014 (GH¢) African Champion Industries Ltd. ACI 0.06 0.06 0.00% AngloGold Ashanti Ltd. AGA 37.00 37.00 0.00% Aluworks Limited ALW 0.05 0.06 20.00% Ayrton Drug Manufacturing Ltd. AYRTN 0.17 0.17 0.00% Benso Oil Palm Plantation BOPP 3.21 2.90 -9.66% Cal Bank Ltd CAL 0.97 0.87 -10.31% Clydestone (Ghana) Ltd. CLYD 0.04 0.04 0.00% Ltd. CMLT 0.16 0.16 0.00% Cocoa Processing Co. Ltd. CPC 0.02 0.02 0.00% Ghana Ltd. EBG 5.61 6.20 10.52% Limited EGL 1.88 2.29 21.81% Ecobank Transnational Inc. ETI 0.19 0.22 15.79% Fan Milk Ltd. FML 6.62 7.52 13.60% Ghana Commercial Bank Ltd. GCB 4.85 4.00 -17.53% Ltd. GGBL 6.20 5.78 -6.77% Limited GOIL 0.89 0.88 -1.12% Golden Star Resources Ltd. GSR 2.75 2.75 0.00% Ltd. GWEB 0.04 0.04 0.00% HFC Bank (Ghana) Ltd. HFC 0.96 1.25 30.21% Co. Ltd. MLC 0.38 0.35 -7.89% Ltd. PKL 0.06 0.06 0.00% Ltd. PBC 0.17 0.17 0.00% PZ Cussons Ghana Ltd. PZ 0.79 0.63 -20.25% Standard Chartered Bank (GH) Ltd.* SCB 14.94 18.92 26.64% SIC Company Ltd. SIC 0.39 0.43 10.26% Ltd. SPL 0.04 0.04 0.00% Societe Generale Ghana Limited SOGEGH 0.75 0.75 0.00% Sam Woode Ltd. SWL 0.03 0.03 0.00% Trust Bank Ltd. (The Gambia) TBL 0.35 0.25 -28.57% Ltd. TOTAL 5.06 6.53 29.05% Transaction Solutions (Ghana) Ltd. TRANSOL 0.03 0.03 0.00% Tullow Oil Plc TLW 34.98 30.09 -13.98% Ghana Ltd. UNIL 18.31 18.08 -1.26% UT Bank UTB 0.45 0.43 -4.44% AngloGold Ashanti Depository Shares AADS 0.52 0.52 0.00% Standard Chartered Bank Preference shares SCB PREF 0.52 0.52 0.00% NewGold Exchange Traded Fund GLD 26.13 23.00 -11.98%

CEDI UNDER PRESSURE CURRENCY MARKET

The local currency was again marginalized against its major trading partners on the inter-bank market last week as it lost EXCHANGE RATES BUYING SELLING YTD 1.72% of its holistic value. The fall was as a result of the spill- CHANGE over effect from investors seeking safe haven currencies as a USDGHS 2.7570 2.7596 27.61%▼ hedge against Ghana’s current economic condition.

The holistic loss in the value of the Cedi translated into a year- GBPGHS 4.6309 4.6364 29.70%▼ to-date depreciation rate of 25.20% on the interbank market. EURGHS 3.8071 3.8106 27.55%▼ All recent economic reports released have shown the weakening state of Ghana’s economy and this has waned investors’ confidence in the economy, hence their chase for foreign Table 6: Inter-bank indicative rates currencies.

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

Euro rallies locally despite weakness on global market 35.00% 30.00% The Euro cemented its ground on the interbank market as it appreciated by 2.68% to an average of GH¢3.8089 last week. 25.00% 20.00% The performance of the Euro which often mimics trading on the 15.00% international market, failed to translate on the local scene. On the international market, the Euro was under pressure as the Euro 10.00% area’s core inflation rate declined to 0.7% from 1% in February. 5.00% This, some analysts have said could prompt further easing from the European Central Bank. 0.00% 8 14 20 24 30 5 11 17 21 27 5 12 18 24 28 3 9 15 The annual yield of the common currency rallied from 25.48% a EURGHS USDGHS GBPGHS fortnight ago to 27.55% in the period under review. Feb Mar Apr Fig 3: YTD performance of Pound, Dollar & Euro versus the Cedi

Pound gains on UK jobless data Dollar maintains positive trend The Dollar concluded last week’s trading on a better note after The Pound remained buoyant on the currency market as it pegging between GH¢2.7570 and GH¢2.7596 on Thursday, maintained its stand as the best performing currency for yet further weakening the value of the Cedi. another week.

This represented a 1.67% rise in the value of the Dollar and a This performance can be traced from the positive data released return of 27.61% since the beginning of the year. by U.K.’s Office for National Statistics on the country’s jobless rate. The unemployment rate dropped from 7.1% to 6.9% between December 2013 and February this year, this is below the Bank of England’s target of 7%.

Consequently, the Cedi lost as much as 1.97% against the British Pound, increasing its deficit this year from the previous week’s

yield of 27.20% to 29.70% as at the close of last Thursday’s trading.

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)