Bond market activity reaches GH₵904m on offshore demand

Trading activity on Ghana’s secondary bond market recorded a notable increase last week, closing at GHS904 million compared to GHS794 million in the preceding week.

Market watchers attributed the uptick largely to renewed offshore demand, particularly concentrated at the shorter end of the yield curve.

According to market data, the February 2030 and February 2031 Government of Ghana papers were the most actively traded instruments, together accounting for 61 per cent of the week’s total turnover.

Analysts explained that these bonds continue to attract investor interest because of their liquidity profile and their suitability as collateral for repo transactions among large financial institutions.

In terms of maturity distribution, the 2027 to 2030 papers represented 54 per cent of trades, closing at a weighted average Yield-To-Maturity (YTM) of 16.70 per cent.

This reflected a climb from the previous week’s average of 16.03 per cent. Meanwhile, the 2031 and 2038 bonds made up the remaining 46 per cent of transactions, with a weighted YTM of 16.56 per cent.

The slight uptick in yields suggests cautious optimism among investors, even as macroeconomic fundamentals continue to stabilise.

Market analysts note that the rebound in activity comes at a time when Ghana’s fixed-income market has been adjusting to fiscal reforms under the IMF-supported programme.

The improved participation, particularly from offshore investors, is seen as a signal of gradually strengthening confidence in the economy’s medium-term prospects.

Databank Research, in its weekly commentary, highlighted that investor sentiments are expected to remain positive in the near term, supported by persistent disinflation trends and improving policy credibility.

The research firm further observed that the 2030 and 2031 papers will likely continue to dominate trading volumes, given their acceptance as preferred collateral instruments in repo transactions.

“The combination of declining inflation, a stabilising currency, and sustained fiscal discipline is helping to restore investor confidence in the market. These developments are likely to underpin continued activity in benchmark bonds,” the report stated.