The second quarter of 2018 has seen a significant number of economic activity and events in both the domestic and the global economy. Ghana's banking sector saw a number of corporate actions by banks in order to establish compliance of the minimum capital requirement. The bank of Ghana introduced the Ghana Reference Rate, and the MPC cut the policy rate, while inflation increased gradually, albeit marginally. The IMF conducted the fifth and sixth reviews of Ghana's performance under the ECF arrangement and extended the program to 2019. On the global front, geopolitical tensions were a major concern in the world economy. The united states engaged in tariff wars with China and Europe. Mounting tensions between Saudi and Iran, and production cuts by OPEC contributed to the rise in crude oil prices. Meanwhile, tensions between the U.S and North Korea cooled, as the leaders of the two countries reached a de-nuclearization agreement in Singapore. Download the document to explore in detail the macroeconomic trends during the second quarter and our forecasts for key economic indicators for the third quarter of 2018.

1. 2018 Second Quarter Global and Domestic
Economic Review
Enquiries should be addressed to:
Wilfred Agyei
wagyei@umbcapital.com
Address: No. 57 Dr. Isert Street, North Ridge
P. O. Box CT 1317 Cantonments- Accra-Ghana
Tel: 0302251137/8
Website: www.umbinvestmentholdings.com
Go

2. 2 | P a g e
We are pleased to present you the following Report (“Quarter Two 2018 Global and Domestic Economic
Review”) in connection with our periodic reviews of the domestic and global economy, and forecast for
key economic indicators.
The second quarter of 2018 has seen a significant number of economic activity and events in both the
domestic and the global economy. Ghana’s banking sector saw a number of corporate actions by banks
in order to establish compliance of the minimum capital requirement. The bank of Ghana introduced the
Ghana Reference Rate, and the MPC cut the Policy Rate, while inflation increased gradually, albeit
marginally. The international Monetary Fund (IMF) conducted the fourth and fifth reviews of Ghana’s
performance under the Extended Credit Facility arrangement and extended the program to 2019. The
government also raised the maiden 30-year Euro bond as part of its debt restructuring strategy.
On the global front, geopolitical tensions were a major concern in the world economy. The United States
engaged in tariff wars with China and Europe. Mounting tensions between Saudi and Iran, and production
cuts by OPEC contributed to the rise in crude oil price. Meanwhile, tensions between the U.S. and North
Korea cooled, as the leaders of the two countries reached a denuclearization agreement in Singapore.
This report does not constitute an evaluation of the domestic and global economy. It is an account of
major events and trends in macroeconomic indicators in the second quarter of the year, and provides
projections for key economic indicators for the third quarter.
The data contained in this report was acquired from sources set out under the “Sources of Information”
section of this report. The projections and forecasts are based on time series analysis and qualitative
consideration of anticipated events, which have upside and downside risks to our forecasts.
We hope you find this document useful.
Wilfred Agyei
Senior Analyst, Corporate Finance and Research
Table of
2018 Second Quarter Economic Review

3. 3 | P a g e
Table of Contents
C
Domestic Economy Currency Market Money Market Stock Market
Pages 4-10 Go Pages 11-13 Go Pages 14-15 Go Pages 16-21 Go
Commodities Market
Pages 22-24 Go
U.S. Economy
Pages 25-28 Go
Chinese Economy
Pages 29-31 Go
Eurozone
Pages 32-34 Go
Domestic Economy
Projections
Commodities Price
Outlook
Global Economic
Outlook
Sources of Data
 Expected Growth
Drivers
 Financial Sector
 Inflation Outlook
 MPC Rate Outlook
 Exchange Rate Outlook
 Money Market Outlook
 Stock Market
Outlook
Pages 35-39 Go Page 39 Go Pages 40-41 Go Page 42 Go

4. 4 | P a g e
Domestic Economy
In this Section
 Growth slows in quarter one of 2018
 Monetary Policy Committee reduces benchmark rate by 100 basis points
from 18% to 17%
 BoG Introduces the Ghana Reference Rate for base rate determination
 BoG sets rules for mergers and acquisitions
 Inflation edges up but at a slower pace
 Government raises US $2 billion sovereign bond
 IMF to disburse US$236 million to Ghana
 Aker Energy enters Ghana’s energy industry

5. 5 | P a g e
Domestic Economic Highlights
GDP MPC INFLATION ENERGY IMF BANKING
GDP growth
reduces from
8.1% in Q4 2017
to 6.4% in Q1
2018
MPC reduces
policy rate from
18% to 17%
Inflation edges
up consistently
but marginally;
closes the
quarter at 10%
Aker energy
enters Ghana’s
oil sector
IMF Extends
program by one
year
Banks strive to
meet minimum
capital; BoG
introduces
Reference Rate;
MPC cuts policy
rate

6. 6 | P a g e
Growth slows in quarter one of 2018
Data released by the Ghana Statistical Service in June shows
that, the economy expanded by 6.8% in the first quarter of
2018, declining from 8.1% in the last quarter of 2017. This is
the slowest growth since the second quarter of 2017. The
decline in quarter one GDP is mainly attributable to the
following:
a) Slowdown in agricultural sector, specifically the livestock,
crops and the fishing sub-sectors, which grew at a weaker
pace; and
b) A slowdown in the industry sector, with the
mining/quarrying, water/sewage and the construction sub-
sectors recording lower growths compared to quarter four of
2017.
Services- 60.5%
Industry-27.5%
Agriculture-11.9%
4.103.803.603.90
4.30
1.10
4.604.50
6.70
9.409.7
8.1
6.8
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32018
Q42017
Q12018
Ghana Annual GDP Growth Rate (Q1-2015
to Q1 2017)
39
43
0
10
20
30
40
50
60
1985 1990 1995 2000 2005 2010 2015 2020
Ghana GDP US$ Billion
Sectoral
Distribution
of GDP in Q1

7. 7 | P a g e
Monetary Policy Committee (MPC) of the Bank of Ghana
reduces benchmark rate by 100 basis points from 18% to 17%
In line with market expectations, the Central Bank
reduced its Monetary Policy Rate by 100 basis points
from 18% to 17%. According to the MPC, its decision was
mainly on account of the subdued risks to the inflation
outlook, due to the continuous decline in the weighted
inflation expectations across various sectors.
However, the MPC noted in its May 2018 Press Release
that, it stands ready to take the appropriate policy
measures to address any potential threats to the
disinflation path.
Bank of Ghana introduces the Ghana Reference Rate for base
rate determination three
Four
Upon consultations between the Bank of Ghana and the Ghana Association of bankers, the existing
model for base rate determination was reviewed and a new framework was introduced. This is the
Ghana Reference Rate which is the new benchmark interest rate by which commercial banks will
set their interests on loans granted to customers.
The maiden rate was set at 16.82% in April, and was subsequently reduced to 16.74% and 16.19% in
May and June respectively. According to the Bank of Ghana, this will help foster transparency in
setting of lending rates in the country.
25.50 25.50
21.00 20.00 20.00
18.0017.00
0.00
5.00
10.00
15.00
20.00
25.00
30.00
Policy Rate (Jan 2017- Jun 2018)

8. 8 | P a g e
Central Bank sets rules for mergers and acquisitions
Pursuant to the new minimum capital requirement of banks, the bank of Ghana released the mergers
and acquisitions directive ahead of the December 31, 2018 deadline. It discusses the following:
 Register of shares;
 Approval by Bank of Ghana;
 General criteria for
approval;
 Specific criteria for
approval;
 General procedures for
approval;
 Decision on application;
 Post-merger, acquisition or
control requirements
 Sale of business
mergers, amalgamations
and reconstructions;
 Disapproval of transfer
of shares;
 Transfer of shares
affecting significant
shareholdings
 Penalties for non-
compliance;
 Definition of regulatory
capital ;
 Management and
measurement of credit
risk;
 Management and
measurement of
operational risk;
 Management and
measurement of market
risk
Specific Requirements
Relevant Legal Requirements
Remedial Measures and
Sanctions

9. 9 | P a g e
Inflation edges up but at a slower pace
Inflation was relatively lower in the second quarter
compared to figures recorded in the first quarter, and
in the same period in 2017.
It eased from 12.8% in March to 9.6% in April, which is
the lowest rate since January 2013, on account of the
fall in the non-food group inflation rate from 11.8% in
March to 10.6% in April.
However, it increased to 9.8% in May and 10% in June
respectively. According to the Ghana Statistical
Service, June’s increase is attributable to rising prices
for clothing and footwear, recreations and culture,
furnishings, and household equipment. The least drivers
for inflation in the non-food group were housing, water,
electricity, gas and other fuels.
Government raises US $2 billion sovereign bond
In line with its debt restructuring agenda, the government issued the maiden 30-year Euro bond
valued at US$1billion at a rate of 8.627% on the international capital markets in May 2018. At the
same auction, it raised a 10-year US$1 billion at a rate of 7.627%, bringing the total amount raised
to US$2billion. According to government, US$750 million would be used to finance the 2018 budget
in the areas of road and rail infrastructure, irrigation, rehabilitation of warehouses and silos,
fisheries, aquaculture inputs, and education.
IMF to disburse US$236 million to Ghana
Following the completion of its fifth and sixth reviews of Ghana’s performance under the Extended
Credit Facility (ECF), the IMF extended the program by a year and approved the disbursement of
US236 million, bringing total funds disbursed to US$798 million. The remaining funds (US$120
million) are tied to subsequent reviews.
13.3
11.9 11.8
13.3
12.8
9.6
10
0
2
4
6
8
10
12
14
16
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2017 2018
Inflation Rate (Jan 17-Jun 18)

10. 10 | P a g e
Aker Energy enters Ghana’s energy industry
Ghana’s energy sector saw the entrance of Norwegian-based oil exploration and production firm
into its upstream petroleum subsector, through a USD100 million share purchase agreement with
Hess Ghana for its stake in the DWTCTP bloc.
As part of the transaction, Aker Energy paid USD25 million to Hess Ghana. Subject to the
requirements of the transaction, the remaining USD75 million will be paid after government
approves the plan of development. The approval would be followed by an ‘order to proceed’ in
2019, authorizing Aker Energy to commence development and exploratory works.

11. 11 | P a g e
.
Currency Market
In this Section
 Cedi appreciates against the Euro and South Africa Rand
 Dollar, Pound and Swiss Franc remain bullish against the Cedi

12. 12 | P a g e
Currency Market Highlights
Cedi comes under pressure but depreciation rate was
comparatively better than prior periods
The local currency strengthened against the Euro and the South African Rand. However, it closed
the quarter weaker against the Dollar, Pound and the Swiss Franc on account of the following
factors:
External economic events: increase in U.S Fed rate
and expected increases before the end of the year;
The decision by some international investors who
exited their local bonds to purchase U.S investments,
when the Fed raised its rate from 1.5% to 1.75% and
to 2% respectively; and
The continuous speculative dealings on the currency
market
The rate of Cedi’s depreciation in the second quarter of 2018 was relatively better, compared to its
performance during the same periods in 2017 and 2016 respectively. This is shown in the table
above.
The Cedi opened the year at GHS5.2964 per Euro and exchanged hands at GHS5.2808 at the end of the
second quarter, translating to a Year-To-Date appreciation of 0.30%. Against the Rand, it opened the
year at GHS0.3580 and closed at GHS0.3292, representing a Year-To- Date appreciation of 8.75%.Ten
On the flip side, the Cedi opened the year at GHS4.4157 per Dollar and closed the second quarter at
GHS4.5230, representing a Year-To-Date depreciation of 2.37%. Against the Pound, it opened the year at
Year-To-Date Depreciation of the Cedi
Currency 29-Jun-18 30-Jun-17 30-Jun-16
USD -2.37% -4.14% -3.28%
EURO 0.30% -12.11% -7.69%
GBP -0.02% -10.67% 6.06%
CHF -0.76% -10.41% -4.27%
ZAR
8.75% -8.66% -7.66%
Cedi Year-To-Date Depreciation Against Selected Trading Currencies
Exchange Rate (GHS)
Currency 29-Jun-18 30-Jun-17 30-Jun-16 30-Jun -15 30-Jun -14
USD 4.5230 4.3618 3.9230 4.3274 3.0034
EURO
5.2808 4.9847 4.4973 4.8424 4.0934
GBP 5.9681 5.6649 5.3052 6.8208 5.1080
CHF
4.5591 4.5591 4.0054 4.6697 3.3684
ZAR 0.3292 0.3355 0.2649 0.3526 0.2827

13. 13 | P a g e
GHS5.669 and closed at 5.9681, translating to a Year-To-Date depreciation of 0.02%. The Swiss Franc was
also bullish against the local currency, as the Cedi recorded a Year-To-Date depreciation of 0.76% to
trade at GHS4.5591 per Franc at the end of the quarter.

14. 14 | P a g e
Money Market
In this Section
 Money market rates remained relatively lower on account of Central
Bank’s policy stance of reducing rates.

15. 15 | P a g e
Money Market Highlights
Rates on the money market remained relatively low and
mostly normalized on account of bank of Ghana’s monetary
policy to lower interest rates. Dealers responded by
quoting lower bid rates. The lower rates regime was
further supported by the lower inflationary outlook.
The 91-Day Bill increased by 2 basis points from 13.31% at
the end of the first quarter to 13.33% at the end of the
second quarter, but the 182-Day bill lost 2 basis points
from 13.88% to 13.86%. The rates on the 91 and 182-Day
Bills were however higher than rates at the same period in
2017.
The 2-Year Note declined by 50 basis points from 16.5% to 16%, while the 1, 3, 5 and 15-Year Bonds
remained unchanged at 15%, 15.5%, 17.6% and 19.75% respectively.
The 7-Year Bond lost 353 basis points from 19.78% to 16.25% and the 10-Year Bonds also declined by
150 basis points from 19% to 17.5%.
Indicator Q2-18 Q2-17 Q2-16
BoG Policy Rate (%) 17.00 22.50 26.00
91-Day Bill (%) 13.33 11.93 22.79
182-Day Bill (%) 13.86 12.90 24.60
1-Year Note (%) 15.00 15.00 23.00
2-Year Note (%) 16.00 17.00 24.25
3-Year Note (%) 16.50 18.50 24.50
5-Year Bond (%) 17.60 18.75 24.50
7-Year Bond (%) 16.25 19.78 18.00
10-Year Bond (%) 17.50 19.00 -
15-Year Bond (%) 19.75 19.75 -
Amount Raised (GHS BN) 10.13 15.94 15.81
13.33 13.86
15
16.19 16.5
17.6
16.52
18.54
19.75
0
5
10
15
20
25
Average Treasury Rate for Quarter Two
2018

16. 16 | P a g e
Thirteen
Stock Market
In this Section
 Market indices maintained a bullish run from the beginning of the year
till the middle of May when they started to decline on profit taking

17. 17 | P a g e
Stock Market Highlights
Overview
The stock market extended its bullish run from the beginning of the year till the middle of May when
it started to decline.
Investors who bought shares at earlier dates took advantage of the continuous appreciation in the
values of their shares to cash in on their investments. The share offer of MTN Ghana also diverted
some attention from the bourse.
The outturn this quarter could not match that of the first quarter as profit taking led to a number
of stocks shedding off some of their earlier gains. Ten equities registered gains compared to
seventeen in the first quarter, while thirteen others came under pressure.
Year-To-Date Returns
On account of the decliners, the Year-To-Date return of the GSE Composite index eased from 30.51%
at the end of March to 11.62% at the end of June. However, the 11.62% recorded is the second
highest quarter two performance in five years (2014-2018) as shown the graphs below. In the same
direction, the return of the Financial Index tumbled from 32.10% to 11.78% within the period.
10.64%
4.03%
-10.40%
16.31%
11.62%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
15.00%
20.00%
Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018
Y-T-D Returns of GSE CI (June 2014- June 2018)
35.92%
6.73%
-13.41%
18.08%
11.78%
-20.00%
-10.00%
0.00%
10.00%
20.00%
30.00%
40.00%
Q2 2014 Q2 2015 Q2 2016 Q2 2017 Q2 2018
Y-T-D Returns of GSE FI (June 2014- June 2018)

18. 18 | P a g e
Advancers during the quarter
 Produce Buying Company gained 25% from GHS0.04 at the end of March to close the second
quarter at GHS0.05. PZ Cussons followed with a gain of 21.62%, appreciating from GHS 0.37
to GHS0.45.
 Ecobank Transnational Incorporated and Access Bank also gained 11.11% each to close
trading at GHS0.20 and GHS4 respectively.
 Mechanical Lloyd and Unilever also bagged 10% and 5.95% to 0.11 and 17.80 respectively.
The other gainers were SIC insurance, Republic Bank, Guinness Ghana and Benso Oil Palm.
Moreover, investors who purchased the equities in the table below at the beginning of the year can
boast of relatively better and higher returns at the end of the first half of the year.
Gainers for the second quarter (from 29th
Mar to 29 Jun ‘18)
29-Jun 29-Mar Price Change
Price
Change
GHS GHS GHS %
PBC 0.05 0.04 0.01 25.00%
PZC 0.45 0.37 0.08 21.62%
ETI 0.20 0.18 0.02 11.11%
ACCESS 4.00 3.60 0.40 11.11%
MLC 0.11 0.10 0.01 10.00%
UNIL 17.80 16.80 1.00 5.95%
SIC 0.39 0.38 0.01 2.63%
Republic 1.32 1.29 0.03 2.33%
GGBL 2.60 2.55 0.05 1.96%
BOPP 7.29 7.17 0.12 1.67%
Gainers for the Half Year (from 29th
Dec 17 to 29th June 18)
29-Jun’ 18 29-Dec’ 17 Price Change
Price
Change
GHS GHS GHS %
SIC 0.39 0.10 0.29 290%
0.45 0.45 0.20 0.25 125%
MLC 0.11 0.06 0.05 83.33%
SOGEGH 1.26 0.82 0.44 53.66%
GOIL 4.00 2.69 1.31 48.70%
UNIL 17.80 12.84 4.96 38.63%
CMLT 0.15 0.11 0.04 36.36%
GGBL 2.60 2.06 0.54 26.21%
ETI 0.20 0.16 0.04 25.00%
BOPP 7.29 6.12 1.17 19.12%
CAL 1.28 1.08 0.20 18.52%
TOTAL 4.05 3.53 0.52 14.73%
EGH 8.45 7.60 0.85 11.18%

19. 19 | P a g e
Decliners
Volume and Value impress,
while Market Capitalization
declines
During the quarter, total volume of shares traded
came up to 73.8 million, which is significantly
higher than the 36 million shares recorded in the
first quarter. The value of shares traded amounted
to GHS371 million, which is also higher than the
GHS290 million recorded during the first quarter.
However, market capitalization fell by 14% from
GHS64 billion at the end of March to GHS55 billion
SCB 27.00 25.25 1.75 6.93%
GCB 5.15 5.05 0.10 1.98%
ADB 5.95 5.84 0.11 1.88%
Decliners for the Quarter Ending June 2018
29-Jun 29-Mar
Price
Change
Price
Change
GHS GHS GHS %
CMLT 0.15 0.16 -0.01 -6.25%
GCB 5.15 6.07 -0.92 -15.16%
CAL 1.28 1.52 -0.24 -15.79%
ALW 0.09 0.11 -0.02 -18.18%
GOIL 4.00 4.99 -0.99 -19.84%
FML 13.70 17.46 -3.76 -21.53%
TOTAL 4.05 5.21 -1.16 -22.26%
SCB 27.00 35.10 -8.10 -23.08%
EGH 8.45 11.15 -2.70 -24.22%
TLW 12.38 17.14 -4.76 -27.77%
SPL 0.02 0.03 -0.01 -33.33%
EGL 3.02 4.82 -1.80 -37.34%
SOGEGH 1.26 2.31 -1.05 -45.45%
Decliners for the Half Year from 29-Dec- 17 to 29-Jun-18
29-Jun 29-Mar
Price
Change Price Change
ACCESS 4.00 4.05 -0.05 -1.23%
Republic 1.32 1.39 -0.07 -5.04%
TB (Gb) 0.30 0.35 -0.05 -14.29%
EGL 3.02 3.70 -0.68 -18.38%
FML 13.70 17.70 -4.00 -22.60%
TLW 12.38 17.15 -4.77 -27.81%
PBC 0.05 0.07 -0.02 -28.57%
SPL 0.02 0.03 -0.01 -33.33%
ALW 0.09 0.16 -0.07 -43.75%
Market Indicator
Jun-18 Jun-17 Jun-16
GSE Composite Index
(CI)
2,879.43 1,964.5 1,787.5
Points Gain (Loss)
(104.98) 99.54 (124.52)
Percentage Change Y-
T-D (%)
11.62% 16.31% -10.40%
GSE Financial Index
(FI)
2,582.66 1,824.88 1,671.30
FSI-Points Gain (Loss) (140.17) 59.56 (152.63)
FSI-Percent Change Y-
T-D (%)
11.78% 18.08 -13.41%
Volume of Trades (MN) 73.82 38.58 36.76
Value of Trades (GHS
MN)
371.28 73.12 50.38
Market Capitalization
(GHS BN)
55.28 59.46 54.79
No. of advancers 10 10 3
No. of decliners 13 8 19

20. 20 | P a g e
at the end of June as a result of price declines due to profit taking.
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2-Jan
9-Jan
16-Jan
23-Jan
30-Jan
6-Feb
13-Feb
20-Feb
27-Feb
6-Mar
13-Mar
20-Mar
27-Mar
3-Apr
10-Apr
17-Apr
24-Apr
1-May
8-May
15-May
22-May
29-May
5-Jun
12-Jun
19-Jun
26-Jun
Movement of the Market Indices (Jan- Jun 2018)
GSE CI GSE FI
RBGH
23,320,797
32%
CAL
19,756,850
27%
AGA
6,200,000
8%
ETI
5,861,759
8%
SOGEGH
3,256,999
4%
Others
15,427,155
21%
Top 5 most Traded By Volume
AGA,
233,120,000
63%
RBGH,
29,851,727 8%
CAL,
28,745,644 8%
FML,
17,495,359 5%
GOIL,
11,593,484 3%
Others,
50,472,512
13%
Top 5 most Traded by Value

21. 21 | P a g e
Banks embark on Corporate Actions
In lieu of Central Bank’s capital requirement, the Boards of Cal, Standard Chartered and GCB Banks
handled the recapitalization process through a capitalization issue in accordance with sections 66(1)
and 70(1) of the Companies Act 1963 (Act 179);
 Cal bank proposed a bonus issue in a ratio of one (1) new share for every seven (7) existing
shares and transferred an amount of GHS250 million to stated capital, raising it to GHS350
million;
 Shareholders of Standard Chartered bank authorized the Board to move GH¢302 million to
stated capital and subsequently executed a bonus Issue in a ratio of one (1) ordinary share
to each existing shareholder for every six (6) ordinary shares held;
 GCB Bank also resolved to transfer GHS400 million to increase stated capital to GHS500
million;
 Access bank executed a renounceable rights issue of 75,757,576 ordinary shares of no par
value at GHS 3.96 per share in a ratio of 1 new share for every 1.5588 existing shares;
 In the same way, Republic Bank executed a renounceable Rights Issue in an offer of
90,909,094 ordinary shares of no par value at GHS0.55 per share

22. 22 | P a g e
Commodities Market
In this Section
 Production cuts by OPEC and other non-OPEC oil producing countries,
geopolitical tensions between US and Venezuela, and mounting tensions
between Saudi and Iran contribute to the rise in crude oil price. Cocoa
price rises on account of supply deficit, while U.S. rate hikes and a
stronger dollar exert downside pressures on the price of gold.

23. 23 | P a g e
Commodities Market highlights eighteen
Cocoa
Cocoa price at the beginning of the year stood at US$1,899.06.
It rallied higher to close the second quarter at US2,476.76;
translating to an increase of 30%.
According to the ICCO April 2018 report, the following
contributed to the upbeat trend in the price of the bean:
 Supply deficit: Levels of cocoa arrivals at Ivorian ports
during the second quarter have been relatively lower
compared to last year’s levels. As at the middle of May
2018, cummulative cocoa arrivals since the start of the
2017/18 crop season were at 1.601 million tonnes, down by
4% from the level reached during the same period in the
previous season
Crude Oil
At the beginning of the year, crude oil traded at US$66.87 per
barrel. It rose by 11% to end the second quarter at US$74.15.
The following factors contributed to the continuous rise in crude
oil prices during the period
 Rising geopolitical tensions between the US and Venezuela:
rumors of U.S. likely to put sanctions on the Venezuelan oil
industry, which has the world’s largest oil reserves;
 The decline in Venezuelan oil output by about 540,000
barrels a day in the wake of the nation’s economic crises;
 Mounting tensions between Saudi Arabia and Iran, and increased instability in the Middle East; and
 On-going production cuts by OPEC and other Non-OPEC countries; output has been cut by about 1.8
million barrels per day
2013.7
2229.72
2540.41
2746.23
2463.66
2476.76
0
500
1000
1500
2000
2500
3000
JAN FEB MAR APR MAY JUN
Cocoa Prices (Jan-Jun' 18)
64.73
61.64
64.64
68.57 67.04
74.15
0
10
20
30
40
50
60
70
80
JAN FEB MAR APR MAY JUN
Crude Oil Prices (Jan-Jun' 18)

24. 24 | P a g e
Gold
Gold price declined by 7% from the beginning of the year
(US$1,343.1/ounce) to end the second quarter at
US$1,254.5/ounce, as the Fed’s rate hike saw investors trade
off their gold investments for the U.S. money market.
1,343.1
1,254.5
1200
1220
1240
1260
1280
1300
1320
1340
1360
JAN FEB MAR APR MAY JUN
Commex Gold Prices (Jan-Jun'18)

25. 25 | P a g e
US Economy
In this Section
 U.S. engages in tariff wars with China and Eurozone, and accuses China
of unfair trade practices. Long standing tensions between the U.S. and
North Korea cools, as the two countries reach a denuclearization
agreement.
 Fed raises benchmark rate from 1.75% to 2% and hints of two more hikes
before the end of 2018.

26. 26 | P a g e
US Economic highlights
Us-China trade dispute intensifies
The agreement reached between the U.S. and China for corporative initiatives to improve their trade
relations which saw the two countries commit to a 100-day action plan at their Mar-a-Largo meeting in
2017 took a turn, as U.S. accused China of unfair trade practices and theft of intellectual property. This
escalated trade tensions between the two countries with both sides engaging in tariff war on products
from electronics and aircraft, to wine and pork.
Possible Actions:
 The U.S. is considering $100 billion worth of additional tariffs on Chinese goods, in addition to
the US$50 billion proposed earlier in the year;
 China has responded by announcing tariffs on $3 billion worth of American products, including
wine, pork and ginseng. It also raised stakes on additional 25% tariff on more than 100 American
products, from cars to soybeans
US and North Korea reaches denuclearization agreement
Tensions between the U.S. and North Korea cooled as North Korean leader, Kim Jong-An agreed to
denuclearize the peninsula at his meeting with U.S. President Donald Trump in Singapore, in June 2018.
This indicates that, calls for a Korean peninsula free from nuclear weapons is gradually yielding result.
In a related development, South Korean’s leader, Moon also engaged in peace talks with his North Korean
counterpart.
Fed raises rates from 1.75% to 2%
The US Federal Reserve raised the benchmark federal funds rate by a quarter-percentage point from
1.75% to 2% and the interest rate on excess reserves by 20 basis points from 1.75% to 1.95%. The Fed
signaled two more hikes within the year on the back of solid footing of the economy. It also hinted that,
it will raise rates three times in 2019 and one time in 2020 to push its benchmark rate up to 3.4%.

27. 27 | P a g e
Inflation records an upward trend
Inflation rate increased consistently from the
start of the year at 2.1% through to subsequent
months, reaching 2.9% in June, after advancing by
2.8% in May. June’s figure is the highest since
February 2012 and is higher than the end-of year
target of 2.1%. The rise in inflation was mostly on
account of upward prices of oil, gasoline and shelter.
It averaged 2.7% during the quarter, compared to an
average of 1.9% and 1.0% in the second quarters of
2017 and 2016 respectively.
New jobs created totaled 632,000
A total of 632,000 new jobs were created in the
second quarter, which is comparatively better than
the 616,000 recorded during the first quarter, as well
as figures posted during the second quarters of 2017
and 2016 respectively. The industries that contributed
the most to the jobs market were services, education
and health.
2.1 2.2
2.4 2.5
2.8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
JAN FEB MAR APR MAY
Inflaion Rate (Jan-Jun 2018)
200,000
313,000
103,000
164,000
223,000
213,000
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
JAN FEB MAR APR MAY JUN
Jobscreated
US Non-Farm Payroll (Jan-Jun 2018)

28. 28 | P a g e
Manufacturing index eases in latter part of the quarter
twenty three
The Markit Manufacturing Purchasing Managers
Index recorded a downward trend during the
quarter, declining from 56.5 in April to 56.4 in May
and 55.4 in June respectively. June’s reading is
the weakest growth in factory activity since
March. This was largely on account of:
 The effects of tariffs which contributed to
sharp increases in prices of some inputs;
and
 The lengthening of suppliers’ delivery
times
Consumer Sentiments Index
declines
Consumer perceptions on current U.S. economic
conditions and expectations were weaker in the
second quarter compared to the first quarter. As a
result, the University of Michigan's consumer
sentiments index declined from 101.4 in March to
98.8 in April. It further dropped to 98 in May and rose
marginally to 98.2 in June, as consumers felt a bit
more optimistic following the decline in confidence in
April.
55.5
55.3
55.6
56.5
56.4
55.4
54.5
55
55.5
56
56.5
57
JAN FEB MAR APR MAY JUN
US Markit Manufacturing PMI (Jan-Jun, 2018)
95.7
99.7
101.4
98.8
98.0 98.2
92.0
93.0
94.0
95.0
96.0
97.0
98.0
99.0
100.0
101.0
102.0
Jan Feb Mar Apr May Jun
US Consumer Sentiments Index (Jan-Jun 18)

29. 29 | P a g e
Chinese Economy
In this Section
 Chinese economy maintains a steady growth of 6.8 percent in the first
quarter of the year, driven by solid consumption, property investments
and exports.
 Chinese leader threatens to file a complaint against the U.S. at the
World Trade Organization in the wake of the on-going tariff war
between the two countries

30. 30 | P a g e
China Economic Highlights
The looming tariff war between China and the United States took a center stage in China’s international
trade activities. After accusing China of unfair trade practices, the U.S. effected new tariffs on $ 34
billion in Chinese products. The U.S. subsequently released a list of US$200 billion worth of Chinese goods
and said it aims to subject them to 10% tariffs. China retaliated by slapping 25% duties on the same
amount on U.S. goods and is likely to file a complaint with the World Trade Organization.
Economy maintains a steady growth rate
The economy recorded a steady growth of 6.8 percent in
the first quarter of 2018. This was supported by solid
consumption, property investments and exports.
According to the China National Bureau of Statistics,
consumption was the highest contributor to growth
(77.8%), exceeding exports and investments. The service
sector’s outputs accounted for 56.6%, outperforming
industrial production and agriculture. Fixed-asset
investments growth rose 7.5% year-on-year in the first
quarter, while property investments reached its four-year
high growth of 10.4%.
Manufacturing Index improves
On the manufacturing front, the Caixin China
Manufacturing Purchasing Managers Index, which is a
private indicator of China’s economy eased from 51.1 in
May to 51.0 in June 2018, signaling a lower improvement
in operating conditions. According to Caixin, this was
mainly due to a moderate growth in production and total
new orders
6.90% 6.90%
6.80% 6.80% 6.80%
6.70%
6.75%
6.80%
6.85%
6.90%
6.95%
Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1-2018
China Year-On-Year GDP Growth (Q1 2017-
Q1 2018)
51.5
50.3
51
51.1 51.1
51
49.5
50
50.5
51
51.5
52
JAN FEB MAR APR MAY JUN
China Caixin Manufacturing Index (Jan-Jun
18)

31. 31 | P a g e
Inflation averages 1.8%
China’s consumer price inflation declined from 2.1% in
March to a steady rate of 1.8% in April and May
respectively. This was mainly as a result of the lower
prices of fresh fruits and vegetables on abundant
supply. However, inflation picked up marginally to 1.9%
in June 2018, on account of faster pace of increases in
the prices of food and the cost of non-food items.
June’s increment is still below the government’s target
of 3% for the year.
1.5
2.9
2.1
1.8 1.8 1.9
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
JAN FEB MAR APR MAY JUN
China Inflation Rate (Jan-Jun' 18)

32. 32 | P a g e
Eurozone Economy
In this Section
 France passes law opening the rail way sector to private competition.
Growth in Spain remains steady on the back of healthy employment
growth and low inflation, while political crises heightens in Italy.

33. 33 | P a g e
Eurozone Economic highlights twenty eight
One of the major concerns of the EU has been the political crises in its third largest economy, Italy. The
country has been without a government as the election held in March failed to produce an outright winner
in parliament.
Discussions between the Five Star Movement and the Far-Right Lega group on the formation of a new
coalition government failed to yield results after the resignation of Giuseppe Conte who had been
selected as the next prime minister. The fundamentals of the economy remain weak; it is one of the
highly indebted countries in the world, posing risks to key sectors especially the financial markets, as
well as growth in other member countries of the bloc.
In France, the senate voted into law a bill reforming the state-run train operator on 14 June, 2018. The
law opens the sector to private competition and cuts employee benefits, which is a significant victory
for Emmanuel Macron’s drive for economic liberalization. Following the passage of the law, the French
government is planning to sell stakes in public-private enterprises to increase revenue and also reduce
fiscal spending.
Growth remained steady in Spain on the back of healthy employment growth and low inflation, which
boosted consumer spending. Also, Greece grew for a fifth consecutive quarter which is a pointer to
gradual recovery of the economy.
First quarter growth slows in the bloc
According to Eurostat, the Eurozone economy expanded
by 0.4% in the first quarter of the year, following a 0.7%
growth in the previous quarter. The decline in growth is
attributed to a negative contribution from external
demand, which outweighed increases in household
consumption and fixed investment. 0.40%
0.30%
0.70%
0.40%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
0.90%
Q12015
Q22015
Q32015
Q42015
Q12016
Q22016
Q32016
Q42016
Q12017
Q22017
Q32017
Q42017
Q1-2018
GrowthRates
Eurozone GDP (Q1 2015-Q1 2018)

34. 34 | P a g e
Manufacturing Index twenty nine
The IHS Markit Eurozone Manufacturing PMI ended the
quarter at 54.9 from 55.5 in May, which indicates a
weakening in the pace of expansion in factory activities
since December 2016. This is attributed to the slowdown in
growth in production and new order volumes, outweighing
the pickup in export orders.
Inflation increases consistently in
the quarter
Inflation rate in the Euro Area increased from 1.3% in April
to 1.9% in May and 2% in June. The consistent increase is
largely on account of higher prices of energy and food.
Overall, it averaged 1.7% in the second quarter, higher than
the 1. 2% recorded in the first quarter.
Consumer confidence weakens
The consumer confidence indicator in the Euro Area ended
the quarter at -0.5, largely attributed to the negative
assessments of the future general economic situation,
future unemployment and consumers' savings expectations.
The indicator averaged 0.0 in the second quarter as against
0.5 in the first quarter.
1.8
1.3
2.0
0.0
0.5
1.0
1.5
2.0
2.5
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2017 2018
Eurozone Inflation (Jan17-Jun 18)
1.8
1.1
1.3
2.0
0.0
0.5
1.0
1.5
2.0
2.5
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2017 2018
Eurozone Inflation (Jan17-Jun 18)
-1.1
0.1
-0.5
-7.0
-6.0
-5.0
-4.0
-3.0
-2.0
-1.0
0.0
1.0
2.0
JAN
FEB
MAR
APR
MAY
JUN
JUL
AUG
SEP
OCT
NOV
DEC
JAN
FEB
MAR
APR
MAY
JUN
2017 2018
Eurozone Consumer Sentiments (Jan 17- Jun
18)

35. 35 | P a g e
Projections For Q-three
In this Section
 Growth in the domestic economy is expected to be driven by
expansionary economic policies, a boost in oil and gas production with
higher revenue levels, increased foreign direct investments, and
infrastructure investments with part of the proceeds of the US$2 billion
Eurobond.
 World Bank projects global growth to remain robust at 3.1% in 2018
before slowing gradually in 2019 and 2020.

36. 36 | P a g e
Domestic Economic Outlook for the third quarter
Expected Drivers of Growth
Ghana’s economy grew by 8.5% in 2017, which is the fastest rate in five years, mainly boosted by
improvements in oil and gas production, as well as significant improvements in foreign direct
investments. In 2018, expansionary economic policies, upward adjustment of commodity prices on the
international market, as well as further boost in oil and gas production, on account of new entrants in
the energy sector is expected to facilitate economic growth.
The proposed investments in infrastructure, covering roads, rails, irrigation, fisheries, education and
other agricultural inputs with US$750 million out of the US$2billion sovereign bond is expected to be a
key growth driver for the remainder of the year. Also, the disbursement of the US$236 million IMF facility
will support growth, as the government commits to terms of the agreement, including restoring debt
sustainability and macroeconomic stability.
The improved investor confidence as a result of gradual pickup in macroeconomic fundamentals is
expected to shore up foreign direct investments, the effects of which should gradually transmit to key
sectors of the economy. However, international financial conditions specifically possible rate hikes in
the United States pose downside risks to Ghana’s growth, as it could result in capital flights into U.S.
financial markets.
On the back of the foregoing, we forecast 2018 GDP growth rate to range between 9.3% and 9.5%.
The Financial Sector thirty two
The banking sector is expected to be well capitalized as banks embark on corporate actions to shore
up their capital. This will enhance the safety of depositors’ funds and increase the level of confidence
in the sector;
Prevailing lending rates of commercial banks are not expected to reduce significantly, despite the
introduction of the Ghana reference rate. This is due to the strive of banks to meet the core capital
requirement, coupled with other cost driving factors;
Possible mergers for banks that fail to meet the requirement;

37. 37 | P a g e
In the investment banking sub-sector, the move by SEC to institute new rules and guidelines for
investment and fund management practices would result in the development of new investment products
by investment firm
Inflation Outlook
Our inflation outlook in the third quarter remains relatively higher than figures recorded in the first and
second quarters. The possibility of further increases in the price of crude oil on the international
commodities market, coupled with depreciation pressures on the local currency pose upside risks to
inflation.
Our forecast for inflation in the third quarter of 2018 stands within the ranges of 10.3% to 10.7%.
MPC Rate Outlook
The Monetary Policy Committee is expected to consider the gradual and marginal increase in inflation
rates for the past three months, among other factors to make a determination on the MPC rate. Since
the beginning of the year, the MPC has cut the benchmark rate cumulatively by 300 basis points. Judging
from the recent inflationary trends, we expect the committee to maintain the current rate at 17% at its
83rd meeting scheduled to be held on July 20, 2018. Thirty three
Exchange Rate
Even though the rate of depreciation of the Cedi against major trading currencies in the second quarter
of 2018 has been relatively better than its performance during the same periods in 2017 and 2016, it
continues to shed grounds on the currency market with implications for international trade and prices of
goods and services.
Factors that may exert pressure on the performance of the Cedi in the third quarter include:
 Possible rate hikes in the United States whose effects could filter into Ghana’s financial channels;
and
 Repatriation of offer proceeds of MTN’s shares

38. 38 | P a g e
However, improving and stronger external reserves position is expected to support the liquidity position,
which could help moderate the rate of depreciation. We do not expect the Cedi’s performance in the
third quarter to be significantly different from the first and second quarters of the year.
Money Market Outlook
Money market rates will remain normalized and be within prevailing levels in the third quarter, as rates
are not expected to significantly change from yields recorded during the first and second quarters. We
project quarter three rates as follows:
 91-Day Treasury Bill- 13.33%-13.37%
 182- Day Treasury Bill- 13.87%-13.91%
 1 Year- 15%
 2 Year- 16%- 16.25% thirty four
 3 Year- 17%
 5 Year- 17.60%
Stock Market Outlook
Stock Market Outlook Remains Positive in the third quarter
The second quarter recorded appreciation in the values of ten equities. However, thirteen others
declined as investors took advantage of capital appreciations to cash in on their gains. In the third quarter
of 2018, we project a favorable outlook and expect the following to prevail on the market:
 The indices are expected to bounce back on account of renewed activities in a number of
equities, as the share offer of MTN comes to an end;
 Investors are likely to focus more attention on MTN’s share offer in the coming weeks, as the end
of the offer gradually approaches;
 Financial stocks are expected to be the key drivers of trading volumes, as they remain relatively
more attractive to investors;
 Possible corporate actions (Capitalization Issue) by banks who have not fully met the capital
requirement. This includes Cal Bank, Societe General and Republic Bank; this is expected to drive
activity in these equities;
 The relatively lower money market rate will partly contribute to investor interest in the market

39. 39 | P a g e
Commodities Market thirty five
Crude Oil
The price of crude oil could increase above quarter two levels on account of the following factors:
 Oil production cuts and moves by OPEC and some non-OPEC oil producers to extend production
cuts to 2019; currently production has been cut by 1.8 million barrels a day;
 Possible sanctions on Venezuelan oil industry by the United States which would deepen the supply
deficit;
 The geopolitical tensions between Saudi and Iran, and the intensifying conflicts in Libya; and
 The ongoing trade war between U.S. and China also poses upside risks
Gold
In the third quarter, the following factors are expected to exert downside pressures on the price of gold:
 A stronger dollar would make the metal expensive for investors to hold and thus, weigh on
demand;
 Expected rate hikes in the United States; and
 Geopolitical tensions between China and the United States
On the back of the foregoing, we expect the price of gold to decline below current levels in the third
quarter.

40. 40 | P a g e
World Economic Outlook thirty six
Global Economy
According to the World Bank June 2018 Global Economic Report, global economic growth will remain
robust at 3.1% in 2018, before slowing gradually in 2019 and 2020, as advanced-economies’ growth
declines and the recovery in major commodity-exporting and emerging market economies levels
off. The report also indicates that, activity in advanced economies is expected to grow 2.2% in 2018
before easing to a 2% rate of expansion in 2019, as central banks gradually remove monetary
stimulus.
The World Bank indicates that, downside risks to this forecasts include:
 The possibility of increased financial markets volatility;
 The vulnerability of some emerging market and developing economies to the volatility of
the financial markets;
 Mounting trade protectionist sentiments; and
 Policy uncertainty in advanced economies
Further, if not resolved amicably, the on-going tensions and trade war between the U.S. and China
could dampen global trade growth with a greater impact on both countries.
United States
Economic activity and growth in the United States have been supported by resilient business investments
and reductions in taxes, which has boosted consumer spending. However, tensions with China, Eurozone
and Canada could affect business confidence with key trading partners and derail growth in the United
States.
Thirty seven
Eurozone
In the Eurozone, the ongoing political unrest, specifically political crises in Italy and Spain could weigh
on growth. Also, the threat by U.S. President Donald Trump to slap a 20% tariff on all European Union
manufactured automobiles in the wake of retaliatory tariffs on U.S. goods could dampen manufacturing
activity in the EU automobile industry.

41. 41 | P a g e
China
Chinese Central Bank has cut the reserve requirement three times in the year for banks in order to free
up more cash for lending in various sectors of the economy. This is expected to contribute to China’s
growth. However, tariffs imposed on Chinese imports by the United States pose downside risks to China’s
growth in the third quarter as it could heavily impact on its international trade.

42. 42 | P a g e
The report was prepared with data from the following sources:
 Bank of Ghana
 Bureau of Labour Statistics (United States)
 Bloomberg
 China Bureau of Statistics
 Eurostat
 Focus Economics
 Ghana Statistical Service
 Ghana Stock Exchange
 International Cocoa Organization
 Trading Economics
 World Bank
Sources of Data
Disclaimer
This document is not intended to be an offer, or a solicitation of an offer for the sale or purchase of any security. The information and opinions contained in this document have been compiled
from or arrived at in good faith from sources believed to be reliable. Whilst care has been taken in preparing this document, no representation is given and no responsibility or liability is
accepted by UMB Investment Holdings Limited, any member of UMB Investment Holdings Limited or UMB Capital as to the accuracy of the information contained herein. All opinions and
estimates contained in this report may be changed after publication at any time without notice.
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AND ADVISORY
 PENSION AND PROVIDENT
FUND MANAGEMENT
 PURCHASE AND SALE OF
TREASURY BILLS
 PRIVATE WEALTH MANAGEMENT
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