Ghana’s financial markets recorded mixed but broadly positive movements during the week under review, with strong demand for government securities, a sharp appreciation of the cedi and continued gains on the Ghana Stock Exchange (GSE), despite a decline in equity trading volumes.
Demand for Treasury Bills remained robust, although investor interest in the primary market eased from the previous week.
The cedi also posted significant weekly gains against the major international currencies, while the GSE Composite Index extended its strong year-to-date performance.
Treasury bills
Investor demand at the primary Treasury Bill auction fell from GH¢11.64 billion in the previous week to GH¢11.28 billion in the latest auction.
Despite the decline, demand remained significantly above government’s target of GH¢5.99 billion, resulting in an 88.22% oversubscription.
Government accepted 80.24% of bids for the 91-day Treasury Bill, 41.08% for the 182-day instrument and 5.87% for the 364-day bill.
Yields declined across all three maturities, indicating easing short-term funding costs.
The interest rate on the 91-day Treasury Bill fell by 16 basis points to 5.47%, while the 182-day bill declined by 26 basis points to 7.27%.
The 364-day bill recorded the largest decline of 49 basis points to 12.50%.
For the next auction, government is seeking to raise GH¢5.43 billion.
The continued oversubscription, despite lower yields, points to sustained investor appetite for government securities and suggests that Treasury Bills remain an important investment option in the domestic market.
Secondary fixed-income market
Activity in the secondary fixed-income market strengthened significantly during the week.
Trading volumes on the Ghana Fixed Income Market (GFIM) increased by 42.3% to GH¢12.82 billion, reflecting heightened activity in government securities and related instruments.
Domestic Debt Exchange Programme (DDEP) bonds dominated trading, accounting for 67.42% of total market activity.
Treasury Bills followed with 25.78%, while sell-buy-back transactions accounted for 6.22%.
Corporate bonds represented 0.56%, with new Government of Ghana notes contributing a marginal 0.01 per cent.
The figures point to continued strong activity in restructured government debt, with DDEP bonds remaining the main driver of secondary-market trading.
Cedi records strong weekly gains
The domestic currency recorded significant gains against the major international currencies during the week, although it remained weaker on a year-to-date basis.
The cedi appreciated by 7.41% against the US dollar, closing at GH¢10.95 per dollar based on Bank of Ghana interbank mid-rates.
Despite the weekly appreciation, the currency remained 4.57% weaker year-to-date.
Against the British pound, the cedi gained 6.97%, closing at GH¢14.84, while its year-to-date depreciation stood at 5.29%.
The cedi also strengthened by 7.26% against the euro, ending the week at GH¢12.68, although it remained 3.22% down year-to-date.
Indicative open-market mid-rates were higher, with the cedi trading at approximately GH¢11.50 to the US dollar, GH¢15.60 to the pound and GH¢13.35 to the euro.
GSE extends strong performance
The Ghana Stock Exchange maintained its strong upward trajectory, with the GSE Composite Index closing at 15,307.71 points.
The index recorded a remarkable 74.54% year-to-date return, supported by gains across several counters.
The strongest weekly gain came from DASPHARMA, which rose 55.77% to GH¢0.81, taking its year-to-date gain to 113.16%.
DIGICUT advanced 44.44% to GH¢0.13, while CLYD surged 32.92% to GH¢6.50. CLYD’s year-to-date gain stood at an exceptional 1,313.04%.
HORDS gained 18.18% to GH¢0.65, taking its year-to-date return to 550%, while SIC rose 16.70% to GH¢5.59.
Mixed performance among decliners
The market also recorded modest declines among some counters.
ACCESS posted the largest weekly decline among the listed laggards, falling 1.25% to GH¢31.49, although it remained up 94.38% year-to-date.
FML declined 0.75% to GH¢13.20, while ALLGH fell 0.55% to GH¢5.40.
GCB slipped 0.35% to GH¢42.95, while EGL edged down 0.10% to GH¢10.02.
Despite these declines, most of the affected stocks maintained strong year-to-date gains, underscoring the overall bullish performance of the equities market.
Trading activity falls
The strong index performance was, however, accompanied by a sharp decline in trading activity.
Equity trading volumes fell by 66.16%, from 29.73 million shares to 10.06 million shares during the week.
The total value of shares traded was approximately GH¢31.35 million.
The divergence between rising share prices and lower trading volumes suggests that the market’s strong performance was not accompanied by broad-based increases in transaction activity.
Financial stocks and the ICT sector are expected to remain important drivers of the GSE’s performance in the coming week.
Overall, the week’s performance reflected strong demand for fixed-income securities, significant cedi appreciation and continued gains in equities, although lower Treasury Bill demand and sharply reduced stock-market volumes point to areas requiring close monitoring.
