M S R ARKET

MARKET SUMMARY REPORT
4th November 2014
TABLE OF CONTENT
Economy Highlight
 Banks record profits despite harsh economic conditions
 Finance Minister likely to present 2015 Budget in November
Top Business
 Bank of Ghana cautions NBFIs
 Professional service export earnings outstrips oil revenue
Foreign Bids
 Oil Extends Slide on Saudi Price Cut as U.S. Supply Seen Rising
 Gold Trades near Lowest Level Since 2010 on Dollar’s Strength
Market Information
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Treasury Bill Rate
Bank of Ghana Indicative rate
GSE Summary
Commodity News
Investment Funds
Quote OF THE DAY
A man has to learn that he cannot command things………….
Economy Highlights
Banks record profits despite harsh economic conditions
Source: Ghana Web
Banks in Ghana are on course to achieving another record for the 2014 fiscal year following
impressive third quarter results. This is not very surprising because of the high interest regime in
Ghana though good for banks but unfavorable to the Ghanaian economy. With only two
months more to end the year, Ghana’s biggest indigenous bank and second biggest bank, GCB
recorded a sterling 53.78 percent profit to GHc205.38 million at the end of September 2014.
According to its unaudited financial results, the bank’s interest income from both loans and
investments grew from GHc396.4 million a year before to GHc497.7 million at the end of
September 2014. Its balance sheet also remained strong as deposits hit GHc2.7 billion during the
first nine months of this year compared to GHc2.3 billion Cedis in September 2013. At the same
time, loans and advances also grew from GHc942.84 million to GHc.27 billion Cedis at the end of
the third quarter. Another indigenous bank, CAL also saw its income going up by 59.2 percent to
GHc103.27 million Cedis during the first nine months of this year. It achieved GHc37 million from
fees and commission at the end of September 2014, compared with GHc22million a year
before. Customer deposits also shot up from GHc742 million a year before to GHc926 million in
the first nine months of 2014.
Finance Minister likely to present 2015 Budget in November
Source: Myjoyonline
Finance Minister Seth Terkper is likely to present the 2015 Budget to parliament by November 20.
This is however subject to the approval of parliament. Joy Business gathered from its sources
close to the Finance Committee of Parliament that despite the current negotiations with the IMF,
government can still go ahead with the presentation. There were fears, initially, that because of
the current negotiations with the IMF, government might not be able to meet the constitutional
requirement, which enjoins it to present the budget at least a month before the beginning of the
implementation of that the new budget.
But according to persons close to the preparation of the Budget, government can still go
ahead, because it can reach some agreement with the IMF even in the middle of
the negotiations. This means government can go ahead with its economic policy and financial
statement for 2015. But for some economists, the government’s biggest challenge for next year
would be how to check its rising expenditure, in the face of labour agitations for higher wages as
well as calls for complete infrastructure projects. However, for those working on the budget, the
challenge facing government now is whether it should go ahead with some expenditure
cuts to address the budget deficit and raise more revenue to match its rising expenses.
According to the finance ministry's guidelines for preparation of the budget, government is
hoping to mobilize 43 billion Ghana cedis in revenue for next year, up from the 26 billion Ghana
cedis it hoped to get this year.
Top Business
Bank of Ghana cautions NBFIs
Source: Ghana Web
The current rate at which some Non-Bank Financial Institutions (NBFIs) are clamoring for
expensive wholesale funds instead of mobilizing cheaper deposits from ordinary savers is
worrying, Millison Narh, Deputy Governor of the Bank of Ghana (BoG) has disclosed. He stated
this yesterday in Accra during the inauguration of a new branch of Best Point Savings & Loans
Limited at Makola. According to him, the mobilization of wholesale funds at interest rates higher
than Treasury bills raises the cost of funds of NBFIs and results in high lending rates. “Thus the high
intermediation costs ultimately lead to non-performing loans which can result in financial distress.
NBFIs, especially the savings and loans companies, must therefore be mindful of these
tendencies and adhere to their intended role of mobilizing cheaper deposits from ordinary
savers.” Mr. Narh was unhappy with shareholders of NBFIs who use their institutions to finance
other businesses through the mobilization of deposits from the public and on-lending same to
businesses connected to owners and directors of the financial institutions. “Let me sound a word
of caution that shareholders of NBFIs should desist from such activities and respect the limits set in
the banking Act with respect to lending to connected entities to avoid an abuse of their
licences,” the Deputy Governor mentioned.
Professional service export earnings outstrips oil revenue
Source: Business & Financial Times
The annual foreign exchange earnings from professional services export trade such as
education, medical tourism and consultancy services is about five hundred percent higher than
the revenue accrued from the Oil and Gas industry. The World Trade Organisation (WTO)
estimates that in 2013 Ghana’s total professional services trade accounted for about
US$2.5billion; though a marginal fraction of the world total services of US$4.64trillion, it was much
higher than the net revenue of the Oil and Gas industry that’s hovering around US$500million.
Realising the growing importance of services trade in foreign exchange earnings, job-creation
and GDP growth, the Ghana Export Promotion Authority (GEPA) under the Ministry of Trade and
Industry and with support of the Commonwealth Secretariat has developed a National Services
Export Strategy, Banda Zakari Abdallah, Head of Services, GEPA, has said.
The goal of the strategy is to enhance the competitiveness of Ghana through improving the
export of professional services. The strategic plan covers a period of five years and identifies four
strategic sectors of focus for development and promotion. These are medical tourism,
education, Business Processing Outsourcing (BPO) and Consultancy Services. He was speaking
at an awareness-creation workshop in Sunyani under theme “A Major Contributor to Economic
Growth”. The workshop was one of the three non-mutually exclusive programmes (awarenessraising, identification and removal of constraints) to achieve services export agenda.
Foreign Bids
Oil Extends Slide on Saudi Price Cut as U.S. Supply Seen Rising
Source: Bloomberg News
West Texas Intermediate extended losses from the lowest closing price since June 2012 as Saudi
Arabia cut prices for crude exports to U.S. customers amid speculation that stockpiles increased.
Brent fell in London. Futures dropped as much as 1 percent in New York for a fourth day of
declines. Saudi Arabian Oil Co. reduced December differentials for all grades it ships to the U.S.,
while supplies to Asia and Europe were priced higher, an e-mailed statement showed yesterday.
U.S. crude inventories climbed by 1.9 million barrels last week to a four-month high, according to
a Bloomberg News survey before government data tomorrow.
Oil slid in October by the most since May 2012 as leading members of the Organization of
Petroleum Exporting Countries resisted calls to cut output. Global supplies are rising, with the U.S.
pumping at the fastest pace in more than three decades. “It’s now a game of chicken between
OPEC members and the U.S. to fight for market share” in the world’s biggest oil-consuming
nation, Will Yun, a commodities analyst at Hyundai Futures Co. in Seoul, said by phone today.
“Expanding crude stockpiles in the U.S. won’t be enough to make OPEC cut its output unless
prices significantly drop to below $75.” WTI for December delivery decreased as much as 76
cents to $78.02 a barrel in electronic trading on the New York Mercantile Exchange and was at
$78.24 at 3:18 p.m. Seoul time.
Gold Trades near Lowest Level Since 2010 on Dollar’s Strength
Source: Bloomberg News
Gold held near the lowest since 2010 on expectations the Federal Reserve is preparing to raise
interest rates while other central banks add stimulus, boosting the dollar and hurting bullion
demand. Silver headed for the longest slump this year and platinum sank to a one-month low.
Bullion for immediate delivery traded at $1,168.17 an ounce at 2:58 p.m. in Singapore from
$1,165.63 yesterday, according to Bloomberg generic pricing. The metal dropped on Oct. 31 to
$1,161.35, the lowest price since July 2010, and a fifth day of losses today would be the longest
run of declines since August. Gold is heading for the first back-to-back annual retreat since 2000
as the Bloomberg Dollar Spot Index holds near a five-year high.
The European Central Bank sets policy on Oct. 6 after the Bank of Japan unexpectedly added
to stimulus last week. The Fed is moving closer to its first rate increase in eight years after ending
a bond-buying program on schedule last month. “Gold is expected to remain weak as there is
potential for further easing in Europe, which will continue to lend strength to the dollar,” said Zhu
Runyu, an analyst at CITIC Futures Co., a unit of China’s biggest listed brokerage. “There is little
buying interest as people are hoping prices will fall further before entering.” The Fed highlighted
“solid” job gains and a falling unemployment rate in its statement on Oct. 29, while pledging to
maintain borrowing costs at a record low for a “considerable time.”
Market Information
Treasury Bill Rate
Monday 3rd November, 2014 to Friday 7th November, 2014
Previous Rates
Period
Discount Rates
Interest Rates
Weekly
Rate
Change
91 - Day
25.7544%
24.2377%
25.8011%
0.0467%
182 - Day
26.4079%
23.3145%
26.3910%
0.0169%
1 – Yr. Note
22.5000%
-%
22.5000%
-%
2 – Yr. Fixed Rate Note
23.0000%
-%
23.0000%
-%
Source: Bank of Ghana
Bank of Ghana Indicative Rate
Tuesday 4th November, 2014
Currency
Pairs Code
Buying
Selling
U.S Dollar
USDGHS
3.1947
3.1973
Pound Sterling
GBPGHS
5.1032
5.1086
Swiss Franc
CHFGHS
3.3086
3.3111
Australian Dollar
AUDGHS
2.7792
2.7832
Canadian Dollar
CADGHS
2.8254
2.8264
Danish Kroner
DKKGHS
0.5358
0.5361
Japanese Yen
JPYGHS
0.0280
0.0281
New Zealand Dollar
NZDGHS
2.4659
2.4695
Norwegian Kroner
NOKGHS
0.4705
0.4706
Swedish Kroner
SEKGHS
0.4320
0.4323
S/African Rand
ZARGHS
0.2872
0.2873
Euro
EURGHS
3.9881
3.9914
Chinese Reminbi
CNYGHS
0.5221
0.5225
BCEAO
GHSXOF
164.34
164.48
Dalasi
GHSGMD
13.47
13.49
Ouguiya
GHSMRO
91.60
91.68
Naira
GHSNGN
51.80
51.85
Leone
GHSSLL
1372.48
1373.59
WAUA
WAUGHS
0.1459
0.1459
Source: Bank of Ghana
in
GSE Summary
GSE STOCK INDICES
GSE-CI
GSE-FSI
Previous 31/10/2014
2,249.27
2,192.90
Current 3/11/2014
2,235.23
2,175.60
14.1
24.68
4.20%
21.77%
CYTD
01/01/14 -3/11/2014
Source: Ghana Stock Exchange
The GSE-Composite Index (GSE –CI), the benchmark measure of performance of the Ghana
Stock Exchange gained 14.1 points from 2,249.27 to close at 2,235.23, representing a year-todate gain of 4.20%.
The GSE-Financial Stocks (GSE-FSI), which tracks the performance of listed financial stocks, also
gained 24.68 points from 2,192.90 to close at 2,175.60 representing a year-to-date gain of
21.77%.
COMMODITY FUTURES
Commodity
Price
% Change
$83.59
-1.40%
$1,165.02
-0.05%
CORN /BU
$371.75
-0.47%
SUGAR /MT
$429.10
+6.00%
COCOA /MT
$2,856.00
-1.28%
CRUDE OIL (BRENT)
GOLD T/OZ
Source: Bloomberg
Investment Funds
Unit Trust and Mutual Funds
Liberty Freedom Fund
as at 16/10/14
Offer
GHC 0.2096
Bid
GHC 0.2075
Year to Date
15.67%
SAS Fortune Fund
as at 31/10/14
Price
GHC 0.4848
Price Change
GHC 0.0003
Year To Date
11.32%
HFC Equity Fund
as at 31/10/14
Price
GHC 0.4135
Price Change
GHC 0.0019
Year To Date
3.79%
HFC Unit Trust
as at 31/10/14
Offer
GHC 0.2580
Bid
GHC 0.2606
Year To Date
17.81%
HFC REIT
as at 31/10/14
Offer
GHC 1.8143
Bid
GHC 1.8326
Year To Date
16.79%
SDC Campus Mutual Fund
as at 12/02/14
Bid Price
GHC 0.4229
Offer Price
GHC 0.0108
Year To Date
4.43%
BFund
as at 31/10/14
Bid Price
GHC 0.3359
Offer Price
GHC 0.3393
Year To Date
12.23%
Source: Business Ghana
Inspirational quote
A man has to learn that he cannot command things, but that he can
command himself; that he cannot coerce the wills of others, but that he can
mold and master his own will: and things serve him who serves Truth;
people seek guidance of him who is master of himself.
James Allen
Thank you.
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