Market Review March 2017 Economic Review Market in Brief March 2017 was an eventful month with activities including the reading of the first budget statement of Ghana’s new government. The budget, Policy Rate which signals expansionary fiscal policy, seeks to grow gross domestic 23.5% product (GDP) to 6.3 percent and reduce overall fiscal deficit to 6.5 percent of GDP in 2017. Ghana’s GDP and overall fiscal deficit stood at 3.6 percent and 10.3 percent, respectively in 2016. Inflation The month also saw a monetary policy boost to growth. The Bank of 13.2% Ghana through its Monetary Policy Committee lowered the benchmark (February Y/Y) policy rate by 200 basis points to 23.5 percent. The bank’s decision was primarily influenced by improved inflation outlook and growth concerns. Consumer inflation has gradually trended downwards since March 2016, Interest Rate reaching a 39-month low 13.2% in February [2017]. 17.51% (91-day bill) Forex and Money Markets The foreign exchange market was highly volatile during the month with Cedi Performance the Ghana cedi reaching historic lows against major trading currencies. The currency weakened to a record interbank low of 4.6042 per US -2.7% (USDGHS YTD Return) dollar on March 8 before retreating to close the month at 4.3173. Year- to-date performance of the cedi against US dollar stands at -2.7 percent (depreciation). GSE Composite Index Interbank Exchange Rate +10.4% March 31 February 28 Month Chg. (%) YTD Chg. (%) (YTD Return) USD/GHS 4.3173 4.4786 3.7% (APN) -2.7% (DPN) GBP/GHS 5.3964 5.5745 3.3% (APN) -3.7% (DPN) EUR/GHS 4.6164 4.7530 3.0% (APN) -3.9% (DPN) APN - Appreciation | DPN - Depreciation In the money market, yield on 91-day treasury bill rose 157 basis points during the month to close at 17.51 percent whereas yield on 182-day bill www.pentassets.com 050-153-0246 rose to 17.19 percent from 16.99 percent in February. Yield on 1-year treasury note stayed flat at 19.00 percent. Ghana Government Treasury Securities March February Change (bps) News in Brief 91-Day T-Bill 17.51% 15.94% 157bps 182-Day T-Bill 17.19% 16.99% 20bps 1-Yr Note 19.00% 19.00% 0bps Bank of Ghana cuts 2-Yr Fixed Rate Note 21.33% 21.50% -17bps policy rate by 200 basis 3-Yr Fixed Rate Bond 21.50% - - points. The central bank reduced its Equity Market monetary policy rate by 200 basis points to 23.5 percent during the bank’s Monetary The stock market grew marginally in March. The benchmark GSE Policy Committee meeting on Composite Index gained 10.48 points (0.6 per cent) month-on-month to March 24. The decision was influenced by improved close [the month] at 1,865.01 points, extending year-to-date return to inflation outlook and growth 10.4 percent. Overall, the market recorded 6 gainers and 11 losers during concerns. the month. Benso Oil Palm Plantation Limited was the lead Bank of Ghana governor GSE Composite Index Statistics resigns. March February Change (%) The governor of the central Level 1,865.01 1,854.53 0.6% bank, Dr. Abdul-Nashiru Market Cap (GHC mil) 48,846.99 49,060.25 -0.4% Issahaku, resigned on Wednesday March 29 YTD Return 10.4% 9.8% (effective April 1) citing No. of Gainers 6 13 personal reasons. No. of Losers 11 4 Government appoints gainer with 17.9 percent month-on-month appreciation. Other major new central bank gainers were Standard Chartered Bank Ghana Limited, GCB Bank Limited governor and Ghana Oil Company Limited with 6.9 percent, 6.6 percent and 5.9 President Akufo-Addo has percent month-on-month appreciations, respectively. appointed senior monetary policy expert Dr. Ernest Addison as Bank of Ghana Top Gainers (March) governor. Price Gain Change (%) Benso Oil Palm Plantation Ltd. 2.90 0.44 17.9% Consumer inflation fell to Standard Chartered Bank Ltd 15.45 0.99 6.9% 13.2 per cent in February GCB Bank Ltd. 5.20 0.32 6.6% Annual consumer price inflation fell to 13.2 percent in February from 13.3 percent CAL Bank Limited was the worst performer of the month with a loss of the previous month, 34.7 percent. Other major losers were Cocoa Processing Company, SIC according to Ghana Insurance Company Limited and Trust Bank Limited (The Gambia) with Statistical Service. www.pentassets.com 050-153-0246 33.3 percent, 26.7 percent and 23.3 percent month-on-month losses, respectively. Top Losers (March) Price Loss Change (%) CAL Bank Ltd. 0.49 -0.26 -34.7% Capital gains tax Cocoa Processing Company 0.02 -0.01 -33.3% exempted from taxation SIC Insurance Company Ltd. 0.11 -0.04 -26.7% Ghana’s Parliament has approved the Income Tax (Amendment) Bill, 2017. The Year-to-date (YTD) market index performance stood at 10.4 percent at bill which amends the Income close of the month with 11 winners and 11 losers. Top winners were GCB Tax Act, 2015 (Act 896) Bank Limited, Benso Oil Palm Plantation Limited and UT Bank Limited exempts realizations of gains on investments in securities with 46.1 percent, 39.4 percent and 33.3 per cent YTD appreciations, listed on the Ghana Stock respectively. Top losers were CAL Bank Limited, Tullow Oil Plc (Ghana) Exchange from taxation till and Produce Buying Company with 34.7 percent, 22.1 percent and 16.7 end of 2021. percent losses, respectively. GSE Top Gainers (Year-to-date) Price Gain Change (%) GCB Bank Ltd. 5.20 1.64 46.1% Benso Oil Palm Plantation Ltd 2.9 0.82 39.4% UT Bank Ltd. 0.04 0.01 33.3% GSE Top Losers (Year-to-date) Price Loss Change (%) CAL Bank Ltd 0.49 -0.26 -34.7% Tullow Oil Plc (Ghana) 20.94 -5.94 -22.1% Produce Buying Company 0.05 -0.01 -16.7% Sources: Bank of Ghana, Ghana Stock Exchange and Ghana Statistical Service. 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. 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 any security. Any person considering an investment should consider the appropriateness of the investment having regard to their objectives, financial situation, or needs, and should seek independent advice on the suitability or otherwise of a particular investment. Contact: James Adjei Barimah Research Analyst Mobile: 050 145 3564 Email: [email protected] www.pentassets.com 050-153-0246 .