Investor appetite for government securities remained strong despite a decline in demand for Treasury bills during the latest auction on the Ghana Fixed Income Market (GFIM), as the government continued to record an oversubscription while the Ghana Stock Exchange (GSE) maintained its bullish momentum with strong year-to-date gains.
The latest market update also showed mixed performance for the Ghana cedi against the major trading currencies, with the local currency depreciating against the United States dollar but posting marginal gains against the British pound and the euro.
Data from the GFIM indicated that investor demand for Treasury bills dropped from GH₵7.83 billion in the previous week to GH₵5.80 billion in the latest auction. Despite the decline, the amount tendered by investors exceeded the government’s target of GH₵4.30 billion by 34.84%, reflecting sustained confidence in short-term government securities.
The Treasury accepted a substantial portion of bids across all tenors during Friday’s auction.
About 95.30% of bids for the 91-day Treasury bill were accepted, while the acceptance rates for the 182-day and 364-day bills stood at 94.63% and 91.64% respectively.
Interest rates on the short-term instruments recorded mixed movements.
The yield on the 91-day Treasury bill increased marginally by four basis points to 4.92%, while the 182-day Treasury bill rate remained unchanged at 7.04%.
The 364-day Treasury bill, however, recorded the sharpest rise, increasing by 26 basis points to 10.39%.
Analysts said the rise in yields on the 91-day and 364-day instruments reflected continued investor demand for higher returns amid inflation and currency pressures, while the stable 182-day rate suggested cautious market sentiment over medium-term liquidity conditions.
Government is expected to return to the market in the coming week to raise GH₵4.49 billion through another Treasury bill auction as authorities continue efforts to manage liquidity and refinance maturing obligations.
On the secondary market, trading activity on the GFIM strengthened significantly over the review period.
Trading volumes surged by 37.1% week-on-week to reach GH₵6.91 billion, underlining heightened investor activity in the fixed income market.
Treasury bills dominated trading activity, accounting for 52.46 per cent of total market turnover.
Sell Buy Back transactions followed with 41.46%, while Domestic Debt Exchange Programme (DDEP) bonds represented 5.76% of total trades.
Corporate bonds contributed 0.23%, while new Government of Ghana notes made up 0.09% of market activity.
The strong performance in the secondary market comes amid improving investor confidence following the implementation of Ghana’s domestic debt restructuring programme and ongoing macroeconomic stabilisation measures.
In the foreign exchange market, the Ghana cedi recorded mixed fortunes against the major international currencies.
According to the Bank of Ghana’s interbank midrates, the cedi depreciated by 1.20 per cent against the US dollar to close at GH₵11.41 to one dollar, bringing its year-to-date depreciation against the greenback to 8.43%.
Against the British pound, however, the cedi appreciated by 1.04% to close at GH₵15.21, although it still reflected a year-to-date depreciation of 7.55%.
The local currency also strengthened marginally against the euro by 0.06$ to settle at GH₵13.27, with a cumulative year-to-date depreciation of 7.51%.
Indicative rates from the open market showed the cedi trading at GH₵11.54 to the dollar, GH₵15.63 to the pound and GH₵13.54 to the euro.
Market observers attributed the cedi’s depreciation against the dollar to sustained demand for foreign exchange by importers and businesses, although gains against the pound and euro suggested relative stability in other currency pairs.
Meanwhile, the Ghana Stock Exchange continued its impressive rally, with the benchmark GSE Composite Index closing the week at 14,320.45 points, representing a remarkable year-to-date return of 63.28%.
The market’s strong performance was largely driven by gains in selected equities including Intravenous Infusions Limited (IIL), Clydestone Ghana Limited (CLYD), Hords Limited (HORDS), Atlantic Lithium Ghana Limited (ALLGH), Zenith Bank Ghana (ZEN), and Société Générale Ghana (SOGEG).
On the top gainers’ chart, IIL emerged as the best-performing stock for the week after rising by 40% to close at GH₵0.07, bringing its year-to-date gain to 40%.
Clydestone Ghana followed with a 20.12% increase to close at GH₵1.97, extending its year-to-date return to an impressive 328.26%.
Hords Limited gained 10% to close at GH₵0.11, while Atlantic Lithium Ghana appreciated by 8.46% to close at GH₵8.46. Zenith Bank Ghana also advanced by 2.58% to close at GH₵7.55.
Despite the broader market rally, some equities ended the week lower.
GOIL fell by 0.25% to close at GH₵7.94, although it still maintained a year-to-date return of 168.24%.
Republic Bank Ghana lost 0.54% to close at GH₵5.50, while MTN Ghana shed 0.61% to close at GH₵6.49.
SIC Insurance Company declined by 3.99% to GH₵5.77, although it remained one of the market’s strongest performers with a year-to-date return of 380.83 %.
Fan Milk Limited also dropped by 4.24% to close at GH₵13.34.
Trading activity on the stock market weakened during the week as volumes traded declined sharply by 55.09% from 11.76 million shares to 5.28 million shares.
The total value of shares traded during the period stood at approximately GH₵28.01 million.
Market analysts expect financial stocks and the information and communications technology sector to continue driving the performance of the GSE in the coming weeks, supported by improving investor sentiment and renewed confidence in the economy.
