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Discount deals put pressure on equities




Trading activity on the bourse in the week ending January 9 was characterised by investors seeking to take positions at bargain prices.

Although activity levels were impressive with a higher number of transactions taking place during the week, the search for discount deals put the shares of eight equities under pressure.

The market indices, as a result, failed to cling to gains registered during the previous week.

At the close of the week, the benchmark Composite Index (CI) was down by 26.23 points to 2,261.09 points. The return on the CI was flat with the index slipping to the year opening’s level.

The Financial Stocks Index (FSI) also backtracked, shedding 34.37 points to 2,245.65 points. That brought its year-to-date return to 0.09 per cent.

Societe Generale was the sole gainer, adding 6Gp to GH¢1.06. The prices of eight equities, however, slipped.

Standard Chartered shaved 21Gp to GH¢20.14; GCB Bank dropped 12Gp to GH¢5.70, while PZ Cussons trimmed 6Gp to end trading at 24Gp.

Ecobank Ghana and Enterprise Group shaved 3Gp each to settle at GH¢7.57 and GH¢1.72 respectively, while ETI and UT Bank gave up 2Gp each to end trading at 26Gp and 23Gp respectively.

Volume and turnover were impressive with a total of 663,861 shares changing hands in 23 equities.

This compared to the 796,111 shares that were exchanged the previous two weeks.

Turnover for the week came up to GH¢2.57 million, compared to the previous two weeks’ GH¢995,806.

In this week, we expect Societe Generale to extend its climb as buyers are likely to up to match offers.

CAL Bank is also expected to be under investors’ radar as bids outstripped offers at the closing bell on January 9.

Bidding trends by buyers is likely to see GCB and UT Bank edging lower in the week.

On the money market, the 91-day bill firmed-up at the auction held January 2. The 182-day bill and the long term treasury notes, however, remained unchanged.

With investors’ anticipating higher government needs in the near term, the 91-day bill extended its northward drive by three basis points to close at 25.84 per cent.

The 182-Day bill was, however, unchanged at the previous rate of 26.41 per cent.

The One-year and two-year notes were also stable at 22.5 per cent and 23 per cent respectively.

A total of GH¢729 million was raised by the Bank of Ghana.

The Cedi lost grounds to the dollar but strengthened against the Pound, Euro, Swiss Franc and Rand on the forex market this week.

It trimmed 0.33 per cent against the Dollar, which gained support from impressive job numbers and lower jobless claims for December 2014. Traders on the interbank market quoted an average rate of GH¢3.21 for the greenback at the week’s close.

The local currency, however, strengthened against the Euro, which was weighed by indications that the European Central Bank is likely to adopt quantitative easing to prevent deflation in the region.

The Cedi, as a result, gained 1.79 per cent against the shared currency to change hands at GH¢3.81.

It also firmed up against the Pound Sterling and the Swiss Franc, climbing by 2.68 per cent and 1.65 per cent with rates on the interbank board averaging GH¢4.86 and GH¢3.17 for the Pound Sterling and the Swiss Franc on Friday respectively.

Against the South African Rand, the local currency edged up by 0.62 per cent to change hands at GH¢0.27.

Credit: UMB Stockbrokers/GB

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