Treasury bill auction remains heavily oversubscribed despite weaker demand, secondary bond trading slows, the cedi weakens against major currencies, while the Ghana Stock Exchange extended its impressive rally with strong gains in both share prices and trading activity.
Investor appetite for government securities remained robust during the latest trading week, even though demand for Treasury bills eased compared to the previous auction.
At the same time, activity on the secondary fixed-income market slowed, the Ghana cedi recorded losses against the United States dollar, British pound and euro, while equities continued their bullish run as the Ghana Stock Exchange (GSE) posted another week of strong gains.
On the primary Ghana Fixed Income Market (GFIM), investor demand for Treasury bills declined to GH¢10.51 billion, down from GH¢12.37 billion recorded in the previous auction.
Despite the decline in bids, investor subscriptions remained significantly above the government’s target of GH¢5.87 billion, with total bids representing an oversubscription of 79.08%.
The government accepted 42.80% of bids for the 91-day Treasury bill, 66.15% of bids for the 182-day bill, and 96.03% of bids submitted for the 364-day bill.
Yields were mixed across the maturity spectrum. The interest rate on the 91-day Treasury bill fell by three basis points to 5.76%, while the 182-day bill declined by five basis points to 7.64%.
However, the yield on the 364-day Treasury bill edged up by one basis point to 12.98%.
The government is targeting GH¢6.22 billion in the next Treasury bill auction.
On the secondary fixed-income market, trading activity weakened during the week, with total volumes falling by 19.6% to GH¢6.80 billion.
Treasury bills remained the dominant instrument, accounting for 62.65 per cent of total market turnover. Securities issued under the Domestic Debt Exchange Programme (DDEP) contributed 33.52%, while sell-buy-back transactions represented 3.17%. Corporate bonds made up the remaining 0.66 per cent of market activity.
On the foreign exchange market, the Ghana cedi recorded losses against all three major trading currencies.
Against the US dollar, the cedi depreciated by 0.47% to close at GH¢11.69 per dollar, bringing its year-to-date depreciation to 10.61%.
The local currency also weakened by 1.36% against the British pound, ending the week at GH¢15.74, with year-to-date losses of 10.69%.
Similarly, the cedi declined by 1.58% against the euro to close at GH¢13.46, taking its year-to-date depreciation against the European currency to 8.83%, based on the Bank of Ghana’s interbank mid-rates.
Open market indicative rates showed the cedi closing at GH¢11.82 to the US dollar, GH¢15.89 to the British pound and GH¢13.48 to the euro.
Meanwhile, the Ghana Stock Exchange maintained its remarkable upward momentum as the benchmark GSE Composite Index closed the week at 15,434.87 points, delivering a year-to-date return of 75.99%.
The rally was largely driven by gains recorded by HORDS, IIL, SCB PREF, CPC, CLYD, MTNGH and EGH.
Among the top-performing stocks, HORDS led the gainers after surging 50% to GH¢0.39, pushing its year-to-date return to 290%.
IIL advanced 27.27% to GH¢0.84, extending its year-to-date gain to an impressive 1,580%.
SCB PREF appreciated 10 per cent to close at GH¢0.99, while CPC gained 6.25%to GH¢0.17, lifting its year-to-date return to 240%.
CLYD also rose 5.56% to GH¢4.75, bringing its cumulative gain for the year to 932.61%.
On the losing side, TOTAL slipped 0.15% to GH¢39.94, while GGBL shed 0.33% to close at GH¢11.91.
KASA fell 0.50% to GH¢2.00, CAL declined 1.25% to GH¢0.79, and ETI recorded the week’s biggest loss, dropping 2.03% to GH¢1.93, although it still maintained a strong year-to-date gain of 150.65%.
Market participation strengthened considerably during the week, with trading volumes soaring by 158.20%, rising from 11.51 million shares to 29.73 million shares.
The value of shares traded also remained strong, reaching approximately GH¢168.92 million.
Market analysts expect the positive momentum on the stock market to continue in the coming week, with financial stocks and companies in the information and communications technology (ICT) sector expected to remain the key drivers of market performance.
