After months of heightened investor participation on the primary market, demand for Treasury bills weakened at the latest auction, with total bids falling short of the government’s target by about 4%.
Data from the Bank of Ghana show that investors tendered a total of GH¢3.96 billion across the 91-day, 182-day and 364-day Treasury bills, against a government target of GH¢4.12 billion.
This resulted in an undersubscription of approximately 4%, with investor bids falling short of the target by about GH¢164.94 million.
The government accepted a total of GH¢2.21 billion of the bids submitted, representing about 55.9% of total investor bids.
The 91-day Treasury bill attracted the largest volume of investor interest, with GH¢2.29 billion tendered. The government accepted GH¢1.88 billion of the bids.
The 182-day bill received GH¢452.79 million in bids, of which GH¢224.96 million was accepted.
Meanwhile, investors tendered GH¢1.21 billion for the 364-day bill, with the government accepting GH¢110.52 million.
The 91-day instrument accounted for nearly 58% of total bids submitted at the auction, making it the most sought-after of the three tenors.
Overall, the government accepted GH¢2.21 billion from the GH¢3.96 billion in bids received.
The results indicate weaker investor demand relative to the government’s funding requirement, as the total amount tendered was below the GH¢4.12 billion target.
The auction data also shows that yields declined further along the curve. The 91-day yield remained unchanged at 4.69%.
The 182-day yield declined by about 3 basis points to 6.48% from the previous week’s 6.51%, while the 364-day yield dropped by 12 basis points to 9.98% from the previous week’s 10.10%.
Analyst attribute the sharp reversal of the strong tender to diluted bank participation as they favor BoG bills which offer a more competitive effect rate of return and flexibility to the yields offered in the T-bill market
For the next auction, the government is targeting GH¢2.75 billion through the issuance of Treasury bills.
