Ghana’s fixed income market recorded a significant undersubscription in the latest Treasury bill auction, even as investor demand improved compared to the previous week.
Total bids rose from GH₵3,168.56 million to GH₵5,310.29 million, reflecting renewed interest in government short-term securities.
However, this still fell well below the government’s target of GH₵7,570 million, resulting in a 29.85% undersubscription.
The shortfall highlights persistent funding pressures in the domestic debt market, even as yields continue to adjust upward and secondary market activity strengthens.
While investor participation improved, the government was still unable to fully meet its borrowing target, underscoring cautious sentiment and liquidity constraints within the system.
91-Day Bill Dominates as Short-Term Demand Holds Firm
In the breakdown of the primary auction, the 91-day Treasury bill attracted the strongest investor confidence, with 99.76% of bids accepted.
This indicates sustained preference for short-term government paper amid uncertainty in longer-tenor instruments.
The 182-day Treasury bill saw full acceptance of all bids submitted, reflecting stable demand in the medium short-term segment.
In contrast, the 364-day Treasury bill recorded weaker interest, with only 46.60% of bids accepted, signalling investor caution toward longer maturities despite higher yields.
Interest rates continued their upward adjustment across all tenors.
The 91-day bill rose by 9 basis points to 4.91%, the 182-day increased by 7 basis points to 6.78%, and the 364-day climbed by 14 basis points to 9.98%.
The yield movements reflect ongoing pricing pressure in the domestic money market as the government seeks to attract sufficient funding.
The government is expected to raise GH₵4,890 million in the next auction as it continues to manage liquidity needs in a tight financing environment.
Secondary market activity surges 38%
Despite the undersubscription in the primary market, trading activity in the Ghana Fixed Income Market (GFIM) secondary market surged significantly.
Total trading volumes increased by 38.0% week-on-week to GH₵10.66 billion.
Treasury bills dominated secondary market transactions, accounting for 52.37% of total volumes.
Domestic debt exchange programme (DDEP) bonds followed with 32.31%, while sell-buy-back transactions contributed 14.23%.
New Government of Ghana notes accounted for 0.82%, and corporate bonds made up a marginal 0.28%.
The surge in secondary market activity suggests heightened repositioning by investors as they respond to changing yield conditions and liquidity dynamics in the fixed income space.
Cedi extends mild depreciation across major currencies
In the currency market, the Ghana cedi recorded modest losses against major international currencies over the review period. Against the US dollar, the cedi depreciated by 0.27% to GH₵11.03, bringing the year-to-date depreciation to 5.26%.
Against the British pound, the local currency weakened by 1.91% to GH₵14.84, while recording a year-to-date depreciation of 5.30%.
The cedi also fell 1.80% against the euro, closing at GH₵12.93, with a year-to-date depreciation of 5.09%.
Indicative interbank market rates showed slightly weaker levels, with the cedi closing at GH₵11.27 to the dollar, GH₵15.10 to the pound, and GH₵13.15 to the euro, reflecting continued pressure in the foreign exchange market despite relative stability in recent months.
Stock Market Extends Strong Year-to-Date Rally
The Ghana Stock Exchange (GSE) maintained its strong performance trajectory, with the GSE Composite Index closing the week at 13,149.10 points, representing a robust year-to-date return of 49.93%.
Market gains were largely driven by strong performances in selected financial, energy, and telecommunications stocks, including SIC, ETI, TOTAL, CPC, CAL, GCB, MTN Ghana, CLYD, FAB, and GOIL.
Among the top gainers, SIC rose by 15.58% to close at GH₵3.56, reflecting a remarkable year-to-date gain of 196.67%.
ETI advanced by 12.84% to GH₵1.67, with a year-to-date return of 116.88%.
TOTAL gained 9.96% to close at GH₵38.09, although it remains down 5.48% year-to-date.
CPC rose by 9.09% to GH₵0.12, while CAL gained 7.14% to close at GH₵0.75, with a year-to-date return of 17.19%.
On the losing side, EGH dipped marginally by 0.10% to GH₵49.45, EGL fell 0.93% to GH₵11.66, GGBL declined by 2.76% to GH₵15.50, FML dropped 3.00% to GH₵12.59, and RBGH recorded the steepest fall of 4.25% to close at GH₵4.51.
Despite the mixed performance in individual equities, overall market sentiment remained broadly positive, supported by strong institutional interest and sustained gains in key blue-chip stocks.
Trading activity contracts despite strong value
Market activity on the exchange declined sharply during the week, with trading volumes falling by 50.13% from 17.36 million shares to 8.66 million shares.
However, the total value of shares traded stood at a strong GH₵54.71 million, indicating continued participation in high-value stocks despite lower volumes.
Market analysts expect financial stocks and the ICT sector, particularly MTN Ghana and major banking equities, to continue playing a central role in shaping the direction of the index in the coming week, as investors position themselves amid improving macroeconomic stability.
