Investor activity across Ghana’s financial markets delivered mixed performance during the latest trading week as Treasury bill demand weakened, the cedi depreciated further against major trading currencies, while the Ghana Stock Exchange (GSE) maintained its strong bullish momentum driven by banking and telecommunications stocks.
Data from the Ghana Fixed Income Market (GFIM) showed that investor appetite for short-term government securities slowed considerably during the latest Treasury bill auction, resulting in an undersubscription despite declining interest rates on some maturities.
At the same time, secondary market activity remained relatively strong, while the equities market continued its impressive rally with the benchmark GSE Composite Index recording a year-to-date return of more than 65%.
Treasury bill demand weakens
According to the latest GFIM auction results, investor demand for Treasury bills dropped sharply from GH₵5.79 billion recorded in the previous week to GH₵4.22 billion in the latest auction.
The government had targeted GH₵4.49 billion but received total bids amounting to GH₵4.22 billion, representing a 5.9% undersubscription.
Despite the undersubscription, the government accepted a significant proportion of bids across the various tenors.
About 99.41% of bids submitted for the 91-day Treasury bill were accepted, while 82.43% of bids for the 182-day bill and 85.62% of bids for the 364-day bill were also accepted.
Interest rates on the short-term instruments remained relatively stable, with slight declines recorded on some maturities.
The yield on the 91-day Treasury bill decreased marginally by one basis point to 4.91%, while the 182-day bill remained unchanged at 7.04%.
The 364-day Treasury bill also declined by two basis points to 10.37%.
Analysts say the easing yields may reflect improving liquidity conditions and investor confidence in macroeconomic stability, although the weaker demand suggests some investors may be diversifying into alternative investment instruments.
The government is expected to return to the market in the next auction seeking to raise GH₵5.89 billion.
Secondary market activity improves
Meanwhile, activity on the secondary fixed income market recorded marginal growth during the review period.
GFIM trading volumes increased by 0.2%week-on-week to reach GH₵6.93 billion.
Treasury bills remained the dominant instrument traded on the market, accounting for 49.60% of total market activity.
Sell-Buy Back transactions constituted 39.19% of total trades, while Domestic Debt Exchange Programme (DDEP) bonds accounted for 9.94%.
Corporate bonds contributed 1.26% of overall market activity, while new Government of Ghana notes represented only 0.01%.
Cedi records fresh depreciation
On the foreign exchange market, the Ghana cedi came under renewed pressure against the major international currencies.
According to Bank of Ghana interbank midrates, the cedi depreciated by 3.01% against the US dollar to close at GH₵11.63 to the dollar, bringing its year-to-date depreciation to 10.11%.
Against the British pound, the cedi weakened by 1.65% to close at GH₵15.62, representing a year-to-date depreciation of 10.01%.
The local currency also depreciated by 1.56% against the euro to settle at GH₵13.48, with year-to-date losses now standing at 9%.
Open market indicative rates showed the cedi closing at GH₵11.70 to the dollar, GH₵15.71 to the pound, and GH₵13.65 to the euro.
Market analysts at Tesah Capital continue to attribute the currency pressures to sustained demand for foreign exchange by importers and corporate institutions, although authorities remain optimistic that ongoing macroeconomic reforms and reserve accumulation measures will support stability in the medium term.
Stock market rally continues
Despite pressures on the currency market, the Ghana Stock Exchange maintained its strong upward trajectory during the review period.
The GSE Composite Index closed the week at 14,518.96 points, pushing the market’s year-to-date return to an impressive 65.55%.
The rally was largely driven by gains in the share prices of major financial and telecommunications stocks including ZEN, Intravenous Infusions Limited (IIL), MTN Ghana (MTNGH), Clydestone (CLYD), GCB Bank and Société Générale Ghana (SOGEGH).
Zen Petroleum emerged as the top gainer for the week after its share price surged by 28.21% to close at GH₵9.68, representing a year-to-date return of 93.60%.
IIL followed with a 14.29% gain to close at GH₵0.08, while MTN Ghana advanced by 3.70% to close at GH₵6.73.
Clydestone appreciated by 3.55% to GH₵2.04, while GCB Bank gained 2.75% to close at GH₵36.99.
On the losers’ chart, Fan Milk Limited (FML) dipped marginally by 0.07% to close at GH₵13.33, while GOIL declined by 0.13% to GH₵7.93.
TOTAL Energies shed 0.27% to close at GH₵32.91, while CAL Bank lost 1.30% to close at GH₵0.76.
Guinness Ghana Breweries Limited (GGBL) also fell by 1.40% to close at GH₵14.75.
Trading activity on the stock market recorded a significant jump during the period, with volumes traded increasing by 1001.10% from 5.28 million shares to 58.16 million shares.
Total market turnover also reached approximately GH₵40.73 million.
Tesah Capital Market analysts expect financial stocks and companies within the ICT sector to continue driving market performance in the coming weeks as investor confidence in listed equities remains strong.
