The Ghanaian financial markets delivered a mixed performance during the latest trading week, with the Treasury bill market recording weaker investor demand, the cedi posting losses against major trading currencies and activity on the Ghana Fixed Income Market (GFIM) slowing.
However, the Ghana Stock Exchange (GSE) maintained its bullish momentum, with strong gains in selected equities pushing the benchmark index to another record performance.
Treasury Bill auction misses target
Investor appetite for government short-term securities weakened significantly during the latest Treasury bill auction, resulting in an undersubscription.
The government sought to raise GH¢5.27 billion through the issuance of 91-day, 182-day and 364-day Treasury bills but received total bids worth GH¢4.21 billion, representing an undersubscription of 20.24 percent.
Demand fell sharply from the previous week’s GH¢8.44 billion, reflecting a more cautious approach by investors despite prevailing macroeconomic stability.
At the auction, the government accepted all bids submitted across the three tenors.
Interest rates moved in different directions.
The yield on the 91-day Treasury bill rose by 26 basis points to 5.31%, while the 364-day bill increased by 39 basis points to 11.36.
However, the 182-day bill eased by five basis points to 7.13%.
The government is expected to return to the market next week seeking to raise GH¢4.60 billion.
Fixed income trading slows
Activity on the secondary fixed income market also moderated during the review period.
Trading volumes on the Ghana Fixed Income Market declined by 9.2% week-on-week to GH¢10.91 billion.
Debt Exchange Programme (DDEP) bonds remained the most actively traded instruments, accounting for 49.15% of total market activity.
Treasury bills followed closely with a market share of 42.69%, while Sell-Buy-Back transactions contributed 6.19%.
Corporate bonds represented 1.54% of traded volumes, while the new Government of Ghana notes accounted for 0.43%.
The figures indicate that investors continue to concentrate their portfolios in government-backed securities despite reduced overall market activity.
Cedi weakens against major currencies
The Ghana cedi came under renewed pressure during the week, recording losses against the US dollar, British pound and euro.
According to Bank of Ghana interbank mid-rates, the local currency depreciated by 1.47% against the US dollar to close at GH¢11.22 to the dollar, bringing its year-to-date depreciation to 6.82%.
Against the British pound, the cedi weakened marginally by 0.04% to GH¢14.83, resulting in a year-to-date depreciation of 5.19%.
The local currency also lost 0.55% against the euro to settle at GH¢12.86, with cumulative depreciation since the beginning of the year reaching 4.55%.
Open market rates painted a slightly weaker picture, with the cedi closing at indicative mid-rates of GH¢11.44 to the dollar, GH¢15.25 to the pound and GH¢13.28 to the euro.
Stock market extends bull run
Despite the weakness in the fixed income and foreign exchange markets, the Ghana Stock Exchange continued its impressive rally.
The GSE Composite Index closed the week at 14,769.27 points, delivering a remarkable year-to-date return of 68.40%.
The strong performance was driven primarily by gains in the shares of companies such as Kasapreko PLC (KASA), SIC Insurance, Access Bank Ghana, Mega African Capital Holdings (MMH), Ecobank Transnational Incorporated (ETI), CAL Bank, First Atlantic Bank (FAB) and Intravenous Infusions Limited (IIL).
Top gainers dominate market
Intravenous Infusions Limited emerged as the week’s biggest gainer, appreciating by 62.50% to close at GH¢0.13 and pushing its year-to-date return to 160%.
Kasapreko PLC followed with a 59.17% gain to close at GH¢1.91.
SIC Insurance advanced by 13.59%to GH¢5.60, bringing its year-to-date return to an impressive 366.67%.
Access Bank Ghana gained 10 percent to close at GH¢31.90, while Mega African Capital Holdings also rose 10%to GH¢0.11.
Decliners limited
Losses on the market were relatively modest.
The GLD exchange-traded fund fell marginally by 0.01% to GH¢462.00, while Benso Oil Palm Plantation (BOPP) and Standard Chartered Bank Ghana (SCB) each shed 0.01%.
Société Générale Ghana declined by 0.15% to GH¢6.79, while MTN Ghana slipped by 0.16%to GH¢6.41 despite maintaining a strong year-to-date return of 52.62%.
Trading activity falls
Market activity on the equities market slowed during the week, with trading volumes declining by 27.40 percent.
A total of 13.36 million shares changed hands compared to 18.40 million shares in the previous week.
Nevertheless, the value of shares traded remained robust at approximately GH¢108.95 million, reflecting continued investor interest in selected blue-chip and financial stocks.
Outlook
Market analysts expect financial stocks and companies within the information and communications technology (ICT) sector to remain key drivers of the stock market’s performance in the coming week.
While the Treasury bill market may continue to face softer demand amid shifting investor preferences, the strong momentum on the Ghana Stock Exchange is expected to provide support for overall investor sentiment as market participants continue to seek opportunities in high-performing equities.
