FirstBanC Financial Services
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Half Year Review 2016

Executive Summary
The economic recovery continued for the first half of 2016. Growth has picked up according to first quarter estimates, although inflation remains stubbornly high. The Central Bank maintained its tight monetary policy but production problems in the oil and gas sector led to an underperformance of government’s revenue targets, causing a slight budget overrun. We expect inflation to fall in the second half as the effects of the Cedi’s stability begins to take effect, at which point interest rates should decline in line with lower inflationary expectations.

The local bourse performed poorly in the first half of the year compared to the same period in 2015. The persistently high interest rate regime in the fixed income markets, the increase in non-performance loans of listed banks and low crude oil prices dampened investor confidence in the equity market. The GSE Composite index posted a negative return of 13.41% in the first half, as compared to 4.03% reported end of first half 2015. However, the stock market is expected to rally in the second half as company fundamentals are expected to improve going forward.

Economic Growth picks up
Ghana’s oil GDP grew by 4.9% in the first quarter of 2016, up from 4.5% in the first quarter of 2015, and amounting to a total of GH¢37.5bn (real GDP of GH¢8.1bn based on constant 2006 prices). The quarterly results show a decline in industry’s performance, as the sector’s output dropped by 1.1%. The agriculture sector grew by 2.8% and the services sector led with 8.8% growth.

The services sector also saw its biggest share of GDP on record, having contributed 60.1% of first quarter GDP (52.6% of real GDP), whilst Industry made up 27.7% (real GDP: 25.2%). Agriculture’s share dropped to 12.2% of GDP (22.2%). click here to download...

Half Year Report 2015

Ghana’s economy still faces significant challenges due to the persistent power crisis and high inflation. The depreciation of the local currency has been significant again this year, although it is improved from 2014. The expected inflows of forex from the COCOBOD syndicated loan and another Eurobond have provided some speculative support for the Ghana Cedi towards the end of the half year.

The stock market performed worse compared to the first half of 2014. The high interest rates on fixed income securities and poor financial results of listed companies have affected investor interest in equity securities. The Composite Index remained in negative yield for most of the period, and emerged to record a YTD of 4.03%. The situation is likely to persist in the second half due to ongoing economic challenges and their effects on listed companies. In addition, the expected US rate rise will contribute to a reversal of capital inflows which will further impact investor interest in equity securities. Click here to download full document...

2014 Half Year Review

Executive Summary

With twin double digit fiscal and current account deficits, the Ghanaian economy has seen some turbulent this first half of the year. Inflation has been rising month-on-month and the Cedi has seen rapid depreciation over the period. The Bank of Ghana introduced foreign exchange controls in February in an effort to stem speculative trading in the local currency and has increased the policy rate In order to check inflation. In the second half however, we expect that the $1bn Eurobond that will be issued, along with the CCOBOD Syndicated loan, will have a positive effect on the local currency. It will also help to curb the currently rising inflation as imports of food and non-food item become cheaper.

The equity market has seen poor returns relative to the same period in 2013, as investors have been driven off the market by economic risks and poor growth in listed companies. The Financial Stocks have done better, returning 19.69% as at end of June 2014, whereas the Composite Index stood at YTD of 10.34%. We forecast improvements in the equity market as the Cedi regains its strength and the energy crisis is brought under control. Click here to download full document

2012 Half Year Review

Ghana’s deficit stood at GH¢2.4 billion (4% of GDP) at the end of the first half of 2012 compared to 2.8% of GDP the same period in the previous year. Government revenue mobilization represented 7.4% of GDP, superior to 6.8% in the previous year. 

Monetary Policy Committee of Bank of Ghana raised the policy rate to 15% in the first half of 2012. 
 Fixed income interest rate trends higher to correlate positively with inflation expectation and currency depreciation. 

Stock market witnessed a lacklustre performance posting 7.89% yield compared with 18.89% in first half of 2011.

click here to download full document

2013 Half Year Review

Ghana’s Fiscal deficit stood at an estimated GH¢4.5 billion (4.5% of GDP) at the end of the first half of 2012 compared to GH¢2.4 billion (4% of GDP) the same period in the previous year..

Monetary Policy Committee of Bank of Ghana raised the policy rate to 16% in the first half of 2013. Interest rate on fixed income instruments trended higher to correlate positively with inflation expectation and currency depreciation. 

The Stock market, Ghana Stock Exchange Composite Index (GCSE), posted a scintillating performance, recording a half year to date yield of 53.2%., compared to 7.89% in same period of 2012. Click here to download full report

Half Year Review

Executive Summary
The economic recovery continued for the first half of 2016. Growth has picked up according to first quarter estimates, although inflation remains stubbornly high. The Central Bank maintained its tight monetary policy but production problems in the oil and gas sector led to an underperformance of government’s revenue targets, causing a slight budget overrun. We expect inflation to fall in the second half as the effects of the Cedi’s stability begins to take effect, at which point interest rates should decline in line with lower inflationary expectations.

The local bourse performed poorly in the first half of the year compared to the same period in 2015. The persistently high interest rate regime in the fixed income markets, the increase in non-performance loans of listed banks and low crude oil prices dampened investor confidence in the equity market. The GSE Composite index posted a negative return of 13.41% in the first half, as compared to 4.03% reported end of first half 2015. However, the stock market is expected to rally in the second half as company fundamentals are expected to improve going forward.

Economic Growth picks up
Ghana’s oil GDP grew by 4.9% in the first quarter of 2016, up from 4.5% in the first quarter of 2015, and amounting to a total of GH¢37.5bn (real GDP of GH¢8.1bn based on constant 2006 prices). The quarterly results show a decline in industry’s performance, as the sector’s output dropped by 1.1%. The agriculture sector grew by 2.8% and the services sector led with 8.8% growth.

The services sector also saw its biggest share of GDP on record, having contributed 60.1% of first quarter GDP (52.6% of real GDP), whilst Industry made up 27.7% (real GDP: 25.2%). Agriculture’s share dropped to 12.2% of GDP (22.2%). click here to download...

Ghana’s economy still faces significant challenges due to the persistent power crisis and high inflation. The depreciation of the local currency has been significant again this year, although it is improved from 2014. The expected inflows of forex from the COCOBOD syndicated loan and another Eurobond have provided some speculative support for the Ghana Cedi towards the end of the half year.

The stock market performed worse compared to the first half of 2014. The high interest rates on fixed income securities and poor financial results of listed companies have affected investor interest in equity securities. The Composite Index remained in negative yield for most of the period, and emerged to record a YTD of 4.03%. The situation is likely to persist in the second half due to ongoing economic challenges and their effects on listed companies. In addition, the expected US rate rise will contribute to a reversal of capital inflows which will further impact investor interest in equity securities. Click here to download full document...

Executive Summary

With twin double digit fiscal and current account deficits, the Ghanaian economy has seen some turbulent this first half of the year. Inflation has been rising month-on-month and the Cedi has seen rapid depreciation over the period. The Bank of Ghana introduced foreign exchange controls in February in an effort to stem speculative trading in the local currency and has increased the policy rate In order to check inflation. In the second half however, we expect that the $1bn Eurobond that will be issued, along with the CCOBOD Syndicated loan, will have a positive effect on the local currency. It will also help to curb the currently rising inflation as imports of food and non-food item become cheaper.

The equity market has seen poor returns relative to the same period in 2013, as investors have been driven off the market by economic risks and poor growth in listed companies. The Financial Stocks have done better, returning 19.69% as at end of June 2014, whereas the Composite Index stood at YTD of 10.34%. We forecast improvements in the equity market as the Cedi regains its strength and the energy crisis is brought under control. Click here to download full document

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Contact Us

FirstBanC Financial Services
12th floor, World Trade Center
19th Independent Avenue
RIdge Ambassadorial Enclave
P.O. Box 1464 Osu, Accra
Tel: 233-0302660709
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

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