Africa Market Update - February 2015

MARKET UPDATE – AFRICA | February 2015
+3.6 %
GSE Composite Index
month-on-month
+0.1 %
GSE Composite Index
year-on-year
The 91 Day, 182 Day and 364 Day papers
closed January 2015 at 25.8%, 26.4% and
22.5%, respectively.
Appetite for T-Bill papers has been moderate
with the 91 Day bid-to-cover ratio averaging
1.0 in January 2015, unchanged from
November and December 2014. Rising liquidity
in the market is, however, likely to
rev up uptake by investors in the coming
months. We anticipate the Bank of Ghana to
be cautious about liquidity trends as it looks
to keep the Cedi resilient against major currencies.
Average Overnight Interbank Rate
GSE Month-on-Month
Source: Bloomberg, StratLink Africa
Source: Bloomberg, StratLink Africa
The interbank rate closed January 2015 at
23.5%, a marginal twenty bps below the December
2014 rate.
EQUITY MARKET UPDATE
GSE Composite Index
Economic environment subdues
market
Activity at the exchange started on a bearish
note as investors assumed circumspect
positions in view of the tumbling oil prices
that threatens the country’s fiscal position.
Further, it is likely that investors are awaiting
confirmation of a possible bailout package
from the International Monetary Fund
to make a sound assessment of the investment
climate going forward. Recent trends
in inflation and the Cedi’s exchange against
major currencies could, however, if sustained,
help to prop up investor outlook in
the coming months.
Financial Services to keep market
bearish
The market’s aggregate performance has
mimicked that of financial services counters
indicative that abysmal performance by the
sector is presenting a major drag to the exchange.
This is likely to be occasioned, to a
large extent, by the tightening of monetary
policy that results in deceleration of credit
flow into the economy.
Source: Bloomberg, StratLink Africa
28 | StratLink Africa Ltd.
www.stratlinkglobal.com