Fixed income trading sees sterling growth
By Isaac AIDOO, Accra
GHANA’S Fixed Income Market (GFIM) has witnessed a surge in liquidity and investor interest, as the country continues to recover from a challenging economic period. In September 2024, the GFIM recorded a traded volume of 15.52 billion, a remarkable 108.01% increase compared to the same period last year.
This strong performance reflects both growing confidence in the country’s debt market and efforts by the government to stabilize the economy.
The market’s robust activity has been driven by Treasury Bills, which accounted for 76.30% of the total volume traded, demonstrating their appeal as a safe investment option in an uncertain environment. Government Bonds contributed 22.62%, while Corporate Bonds, though a smaller portion, represented 1.08% of the total volume.
The surge in fixed income trading comes at a time when Ghana’s economy is steadily improving, following a period of economic decline exacerbated by high inflation and public debt challenges.
The government’s focus on managing liquidity and raising funds through debt instruments, alongside structural reforms, has fostered greater market participation.
These efforts have been supported by the International Monetary Fund (IMF) program, which has helped Ghana navigate its fiscal challenges and implement necessary policy adjustments.
Strong Gains in Fixed Income Trading
Beyond the overall market trends, the GFIM posted strong gains in both volume and value. In September, 280.42 million shares were traded, valued at GHS566.98 million, marking significant year-on-year increases of 386.31% and 557.51%, respectively.
This reflects the growing depth and liquidity of the fixed income market, which has become a crucial component of the country’s financial system amid ongoing economic recovery efforts.
The cumulative trading volume for the year has also shown impressive growth. So far in 2024, a total volume of 933.22 million shares, valued at GHS1.85 billion, has been traded, representing a 126.17% increase in volume and a 230.38% rise in value compared to the same period in 2023. MTN Ghana dominated trading activity, accounting for 98.98% of the total value traded in September.
Equities Market Gains
While the fixed income market has been a focal point, the equities market has also seen positive movement. The Ghana Stock Exchange (GSE) Composite Index edged up by 0.22% in September, closing at 4,369.44 points, which brought the year-to-date gain to 39.59%. Similarly, the GSE Financial Stock Index increased by 3.41%, raising its year-to-date gain to 15.19%.
Several stocks recorded notable gains during the month. Enterprise Group Limited (EGL) saw the highest increase at 20.61%, followed by Ecobank Transnational Incorporated (ETI) at 13.33%, Standard Chartered Bank (SCB) with 9.95%, and Republic Bank Ghana (RBGH) at 9.09%. Other gainers included GLD (6.09%), UNIL (3.13%), TOTAL (1.69%), GCB Bank (1.52%), and BOPP (0.84%).
On the losing side, MTN Ghana saw a marginal decline of 0.91%, while Société Générale Ghana (SOGEGH) fell by 3.23%. Guinness Ghana Breweries (GGBL) declined by 8.91%, CAL Bank by 9.68%, and Access Bank recorded the steepest drop of 10.00%.
Outlook
As Ghana continues to implement its economic recovery measures, the strong performance of the fixed income market, along with the positive movements in the equities market, points to a more stable financial environment.
The government’s efforts to manage debt, boost investor confidence, and maintain fiscal discipline, supported by structural reforms under the IMF program, are expected to drive further improvements in both markets. This growing investor interest and liquidity provide a solid foundation for continued economic stability and recovery in the months ahead.
