Investor interest in government securities surged in the latest treasury bill auction on the Ghana Fixed Income Market (GFIM), with total bids rising to GH₵5.47 billion from GH₵3.54 billion the previous week.
Despite the heightened demand, the auction fell short of the government’s target of GH₵6.67 billion, recording a 17.96% undersubscription.
Breakdowns from the auction reveal that the 91-day bill attracted the most interest, with 75.63% of submitted bids accepted.
The 182-day treasury bill auction followed closely with a 92.68% acceptance rate, while only 30.82% of the bids for the 364-day paper were taken up.
In tandem with market expectations, yields continued on a downward trend. The 182-day bill fell by 3 basis points to 15.46%, and the 364-day bill dropped 11 basis points to 15.80%. The 91-day yield remained steady at 14.79%.
Trading activity slows on the GFIM
In contrast to the upbeat performance on the primary market, trading volumes on the secondary market dipped significantly. Week-on-week, volumes contracted by 35.2%, settling at GH₵3.1 billion.
New Government of Ghana (GoG) Notes and Bonds dominated the market, accounting for 49.09% of total transactions.
Treasury bills made up 36.62% of the week’s turnover, while older GoG instruments contributed a meagre 0.42%.
Sell/Buy Back transactions made up 9.94% of the market, and corporate bonds accounted for 3.93% of trading activity.
Cedi slips against Euro and Pound
The Ghanaian Cedi continued to show resilience on the currency market, strengthening against the US dollar by 0.29% to close the week at GH₵10.2500 per dollar.
The year-to-date appreciation of the Cedi against the greenback now stands at an impressive 43.41%.
However, the local currency lost some ground against other major trading currencies.
It depreciated by 0.54% against the British Pound to close at GH₵13.9282 and by 0.56% against the Euro to end the week at GH₵11.7330.
These figures are based on the Bank of Ghana’s official interbank midrates.
Indicative open market midrates confirmed these movements, quoting the dollar at GH₵10.25, the pound at GH₵13.91, and the euro at GH₵11.73.
Market dips despite individual stock gains
The Ghana Stock Exchange (GSE) Composite Index posted a 2.37% decline over the review week, ending at 6,004.72 points. This drop trims the index’s year-to-date return to 22.83%, as losses in key stocks outweighed gains in others.
Declining share prices of Ecobank Transnational Inc. (ETI), Cal Bank Ltd (CAL), and MTN Ghana (MTNGH) were largely responsible for the market dip.
ETI lost 4.49% to close at GH₵0.85 (YTD: 174.19%), CAL dropped 5.17% to GH₵0.55 (YTD: 57.14%), and MTN declined by 5.70% to GH₵2.81 (YTD: 12.40%).
Despite the overall market pullback, several stocks posted impressive gains. Access Bank Ghana PLC (ACCESS) surged by 17.88% to close at GH₵13.12, taking its year-to-date return to 152.31%.
Ghana Oil Company Limited (GOIL) rose by 10.56% to GH₵1.99, while GCB Bank Ltd (GCB) advanced 10.21% to GH₵8.85.
Benso Oil Palm Plantation (BOPP) climbed 9.90% to GH₵34.20, and Total Petroleum Ghana Ltd (TOTAL) gained 0.40% to close at GH₵25.05.
Other notable movers included Fan Milk Ltd (FML), up 1.22% to GH₵4.15, SIC Insurance Company Ltd (SIC), up 2.97% to GH₵1.04, and NewGold (GLD), which rose 3.65% to GH₵363.67 despite a negative year-to-date return of -6.87%.
Analysts from Tesah Capital, however, expect GLD to lose value in the coming week due to the strengthening Cedi.
Market Activity Surges on GSE
Trading activity on the GSE saw a substantial increase, with volume jumping 520.32% to 11,195,035 shares, up by 1,804,728 shares from the previous week.
The total value of shares traded stood at approximately GH₵40 million, reflecting growing investor participation amid mixed signals from the broader economy.
Caution and opportunity in a shifting landscape
With Treasury yields gradually declining and the Cedi holding firm against the dollar, investor sentiment in Ghana’s financial markets appears cautiously optimistic.
However, continued monitoring of inflation, fiscal policy developments, and external shocks will be crucial in determining the sustainability of these trends.
As always, all opinions are subject to change without notice. Data and forecasts are sourced from both internal and external research by Tesah Capital.
