Ghana’s financial markets delivered mixed signals during the latest trading week, with strong performance on the stock market contrasting with softer investor participation in the Treasury bill market and a slight weakening of the cedi against major currencies.
While the government still achieved an oversubscription in its Treasury bill auction and equity prices continued their remarkable rally on the stock exchange, activity in the secondary fixed income market slowed and the local currency experienced modest depreciation against the US dollar and the British pound.
The developments reflect the evolving dynamics of Ghana’s financial markets, where investor appetite for equities remains robust even as liquidity conditions and currency pressures continue to shape activity in the fixed income and foreign exchange segments.
Ghana Fixed Income Market
In the Ghana Fixed Income Market (GFIM), investor demand for Treasury bills declined compared with the previous week, although the government still succeeded in exceeding its borrowing target.
Total bids submitted in the latest auction fell from GH₵10.76 billion the week before to GH₵8.74 billion.
The government had initially aimed to raise GH₵8.13 billion but ultimately received GH₵8.74 billion in bids, resulting in an oversubscription of about 7.45%.
Acceptance levels varied across the different tenors offered at the auction.
Approximately 95.63% of bids submitted for the 91-day Treasury bill were accepted, while 79.19% of bids for the 182-day instrument were taken up.
For the 364-day Treasury bill, the government accepted 90.75% of the bids received.
Interest rates showed mixed movements during the auction.
The yield on the 91-day Treasury bill under the Domestic Debt Exchange Programme declined by 12 basis points to 4.71%, while the rate on the 182-day bill fell by 2 basis points to 6.28 percent.
In contrast, the 364-day Treasury bill recorded a slight increase of 6 basis points, with its interest rate rising to 9.41%.
Looking ahead, the government is targeting to raise GH₵5.01 billion in the next Treasury bill auction, as it continues to rely on the domestic debt market to finance budgetary obligations and manage liquidity.
Ghana Fixed Income Market
Meanwhile, activity in the secondary segment of the Ghana Fixed Income Market weakened during the week.
According to market data, total trading volumes declined by 9.9% to reach approximately GH₵7 billion.
Sell-buy back transactions dominated trading activity, accounting for 37.62% of total market turnover.
Newly issued Government of Ghana (GoG) notes made up 34.52% of the transactions, while Treasury bills represented 27.33% of traded volumes. Corporate bonds contributed a relatively small share of 0.37%, while older Government of Ghana notes accounted for just 0.17% of activity in the market.
Analysts say the drop in trading volumes reflects adjustments in investor portfolios following earlier strong activity in the fixed income market, particularly as investors weigh interest rate movements and macroeconomic developments.
Foreign exchange market
In the foreign exchange market, the Ghana cedi recorded a modest depreciation against the US dollar during the review period.
The local currency weakened by 0.94% to close the week at GH₵10.87 per dollar on the interbank market.
This brought the cedi’s year-to-date depreciation against the dollar to about 3.89%.
Against the British pound, the cedi also slipped slightly, depreciating by 0.08% to end the week at GH₵14.39.
On a year-to-date basis, the local currency has depreciated by approximately 2.30% against the pound.
However, the cedi recorded a modest gain against the euro, appreciating by 0.52% to close the week at GH₵12.44.
Despite this improvement, the currency remains down by about 1.31% against the euro since the beginning of the year, based on interbank mid-rates published by the Bank of Ghana.
Indicative rates in the open market showed the cedi trading slightly weaker than the official interbank levels.
The currency closed the week at about GH₵11.10 to the US dollar, GH₵14.88 to the British pound and GH₵12.90 to the euro in the retail foreign exchange market.
While the fixed income and currency markets experienced mixed trends, the Ghana Stock Exchange (GSE) continued its impressive rally, extending one of the strongest equity market performances in recent years.
The benchmark GSE Composite Index closed the week at 15,611.32 points, translating into an extraordinary year-to-date return of about 78%.
Market analysts at Tesah Capital attribute the strong performance largely to sustained gains in financial, energy and consumer sector stocks.
Several listed companies recorded significant increases in their share prices during the week.
Among the top performers, Ecobank Transnational Incorporated led the gainers with a 48.19% rise in its share price to close at GH₵2.46, pushing its year-to-date return to an impressive 219.48%.
SIC Insurance followed closely with a 39.39% jump in its share price to GH₵6.90, giving the stock an extraordinary year-to-date return of about 475%.
Republic Bank Ghana also posted strong gains, with its share price rising by 38.97% to GH₵4.03, representing a year-to-date return of about 210%.
Standard Chartered Bank Ghana also recorded significant growth, with its share price increasing by 38.95% to close at GH₵79.41, while GOIL gained 25.99% to end the week at GH₵7.32.
These gains have contributed to year-to-date returns of about 171.77 percent for Standard Chartered Bank and 147.30% for GOIL.
Despite the broad rally, a few stocks recorded losses during the week.
TotalEnergies Marketing Ghana edged down marginally by 0.05% to close at GH₵40.13, leaving the stock slightly negative on a year-to-date basis at minus 0.42%.
Enterprise Group also slipped by 1.75% to close at GH₵56, although it remains up by 124% since the start of the year.
CAL Bank declined by 2.25% to GH₵0.87, while Société Générale Ghana dropped by 5.61% to GH₵10.40.
Fan Milk also recorded a decline of 5.81%, closing at GH₵15.40.
Market activity on the exchange improved during the week as trading volumes increased significantly.
The number of shares traded rose by about 21%, from 29.02 million shares in the previous week to approximately 35.12 million shares.
In value terms, the total turnover on the exchange reached about GH₵131.85 million, reflecting sustained investor interest in listed equities.
Market analysts at Tesah Capital expect the bullish momentum on the exchange to continue in the near term, particularly with financial sector stocks and companies in the information and communications technology (ICT) sector playing a leading role in driving market performance.
They note that strong corporate earnings expectations, improving macroeconomic stability and renewed investor confidence are likely to sustain the positive trend on the stock exchange, even as developments in the fixed income and foreign exchange markets continue to influence overall investor sentiment in Ghana’s financial system.
By ELVI DARKO, Accra
