Investor confidence in treasury bills grows
Investor interest in Ghana’s treasury bills surged during the latest auction, where the government raised an impressive GH₵4.61 billion, slightly surpassing its target of GH₵4.57 billion.
This notable 1.08% over-subscription highlights continued confidence in government securities, suggesting that investors are increasingly viewing treasury bills as a safe haven amid economic uncertainties.
In this auction, all bids for the 91-day and 182-day treasury bills were accepted, demonstrating strong demand for short-term instruments. Additionally, an impressive 99.76% of bids for the 364-day treasury bills were cleared, indicating a robust appetite for longer-term securities as well. Yields on treasury bills also showed slight increases, with the 91-day bill yielding 25.62%, the 182-day at 26.90%, and the 364-day bill reaching a yield of 28.58%. These rates reflect the government’s strategy to attract investors while managing public debt.
The Ghana Fixed Income Market experienced a boost, with trading volumes rising by 30.8% to GH₵4.76 billion. Treasury bills dominated the market, accounting for 90.61% of trading activity, while sell buyback trades comprised 6.14%, corporate bonds 1.98%, and new government notes and bonds 1.27%. This strong performance indicates that investors remain focused on treasury bills as a primary investment avenue, despite broader economic challenges.
However, the Ghanaian cedi continues to face pressures, depreciating against major foreign currencies. It fell by 0.69% against the US dollar, 0.41% against the British pound, and 0.58% against the euro, ending the week at GH₵15.90 per dollar, GH₵20.78 per pound, and GH₵17.40 per euro. In the open market, the cedi closed slightly stronger, at GH₵15.82 per dollar, GH₵20.69 per pound, and GH₵17.32 per euro. This depreciation presents ongoing concerns for the economy, as it impacts import costs and inflation rates.
In the equities market, the Ghana Stock Exchange (GSE) Composite Index experienced a slight decline of 0.42%, primarily due to drops in key stocks such as MTN Ghana, which fell by 0.92% to GH₵2.15 per share, and New Gold, declining by 1.62% to GH₵396 per share. The only notable gainer was GCB Bank, which rose by 2.50% to close at GH₵6.15 per share. Despite these fluctuations, the index closed at 4,346.70 points, reflecting a year-to-date growth of 38.86%. However, trading volumes in the equity market decreased significantly by 75.98%, with a turnover of GH₵14.33 million. Looking ahead, analysts predict that financial and ICT stocks are expected to drive market performance in the coming week. As investors navigate a volatile economic landscape, treasury bills remain a crucial investment tool, reflecting a cautious yet optimistic outlook for the financial markets in Ghana.
