Secondary bond market activity rises 14% on coupon payment boost

Trading activity on Ghana’s secondary bond market surged by 14.07 percent week-on-week, reaching a total volume of GHS1.74 billion.

The rebound was largely driven by a GHS9.7 billion coupon payment disbursed under the Domestic Debt Exchange Programme (DDEP), which injected liquidity and lifted market sentiment.

Market data show that activity was concentrated in the General Category bonds, with papers maturing between February 2028 and February 2031 dominating trades.

These accounted for 64 percent of total volumes transacted during the week.

Specifically, bonds maturing between 2027 and 2030 recorded the highest participation, representing 69 per cent of overall trades.

The weighted average yield to maturity (YTM) on these instruments eased by 0.13 percentage points to close the week at 16.43 per cent.

Longer-dated instruments maturing between 2031 and 2038 accounted for the remaining 31 per cent of market activity, with the weighted average YTM on these bonds settling at 16.79 per cent.

Analysts attribute the slight downward shift in yields to the impact of the large coupon payment, which boosted investor confidence and supported pricing across the local currency yield curve.

Market watchers note that the inflow of coupon payments provided investors with additional funds to reinvest, thereby enhancing trading momentum on the secondary market.

In line with expectations, the liquidity injection from coupons has been a key driver of trading volumes, lifting sentiment and easing yields marginally.

Looking ahead, analysts anticipate modest activity in the coming weeks.

While coupon-induced liquidity provided a temporary boost, market direction is expected to be shaped by banks’ continued reliance on bonds to support repurchase (repo) transactions.

This, they say, will sustain some level of demand but may not trigger a significant surge in trading volumes without fresh catalysts.

The secondary bond market has become a key avenue for investors seeking to rebalance portfolios and manage liquidity following the DDEP.

However, uncertainties surrounding fiscal consolidation efforts, inflation dynamics and interest rate expectations continue to weigh on the market outlook.

Despite these challenges, the week’s performance reflects improved investor confidence, suggesting that coupon flows remain critical in sustaining activity in Ghana’s fixed-income market.