Ghana’s latest Treasury bill auction fell short of target as investor demand weakened sharply, raising concerns over short-term government financing.
According to data from the Ghana Fixed Income Market (GFIM), the government sought to raise GH¢4.24 billion in the most recent auction but secured only GH¢3.01 billion, leaving a shortfall of about 29%.
This marked a significant drop from the previous week’s total bids of GH¢6.89 billion. Market watchers noted that appetite for the 91-day bill remained relatively strong, with 96.25% of bids accepted.
Acceptance rates for the 182-day and 364-day bills stood at 79.28% and 61.51% respectively.
Yields, however, continued on a downward trend.
The 91-day T-bill yield fell by six basis points to 10.14%, while the 182-day and 364-day instruments shed two basis points each, closing at 12.23% and 13.09% respectively.
Secondary market activity gains momentum
Despite the undersubscription on the primary market, activity in the secondary bond market picked up pace.
GFIM recorded a 12.4% increase in trading volumes, which reached GH¢4.5 billion during the week.
Bank of Ghana (BoG) bills led the market, accounting for 45.3% of total trades, followed by newly issued Government of Ghana notes and bonds at 32.26%.
Treasury bills made up just over five percent of the volume, while corporate bonds and sell-buy-back trades contributed 2.87% and 14.13% respectively.
Cedi loses ground against major currencies
The local currency weakened across the three major trading currencies during the week.
The cedi depreciated by 0.47% against the U.S. dollar to close at GH¢10.65 per dollar on the interbank market, though it maintained a strong year-to-date gain of 38.03%.
It also fell by 1.31% against the British pound, settling at GH¢14.45, and by 0.87% against the euro at GH¢12.47.
Open market indicative midrates showed the cedi trading slightly higher at GH¢10.90 to the dollar, GH¢14.82 to the pound, and GH¢12.82 to the euro.
Equity market records gain
Meanwhile, the Ghana Stock Exchange (GSE) extended its positive performance, buoyed by gains in several blue-chip stocks.
The GSE Composite Index rose by 0.35% to close at 7,412.59 points, pushing its year-to-date return to an impressive 51.63%.
Notable gainers included Trust Bank Gambia Ltd (up 10% to GH¢1.10), Ecobank Ghana Ltd (up 1.14% to GH¢8.91), SIC Insurance (up 0.96% to GH¢1.05), GCB Bank (up 0.73% to GH¢9.61), Enterprise Group Ltd (up 0.70% to GH¢2.87), MTN Ghana (up 0.51% to GH¢3.95) and Fan Milk Ltd (up 0.23% to GH¢4.41).
On the losing side, Unilever Ghana slipped 0.44% to GH¢20.40, CalBank declined 1.92% to GH¢0.51, while NewGold ETF shed 5.13% to close at GH¢387.04.
Market activity was brisk, with trading volumes surging by 71% from 10.9 million shares the previous week to 18.7 million shares.
The value of trades amounted to about GH¢71 million.
Tesah Capital analysts expect financial stocks and the ICT sector to continue shaping the direction of the market in the coming week.
