Bond Market Declines to GH¢377.59M

Activity on Ghana’s secondary bond market weakened significantly over the past week, with total turnover declining by 59.88 percent week-on-week to GH¢377.59 million, reflecting heightened investor caution ahead of the government’s return to the primary market.

The slowdown follows the announcement by the Government of Ghana of plans to re-enter the domestic bond market to raise long-term funds, a move that has prompted many investors to temporarily step back and reassess their positions.

Market data indicates that trading activity remained concentrated within the short-to-medium end of the yield curve, particularly in the “front-to-belly” segment. Bonds maturing between 2027 and 2030 dominated market activity, accounting for 88.98 percent of total traded volumes at a weighted average yield of 10.73 percent.

The 2031 to 2034 maturity segment followed, contributing 11.02 percent of total turnover, with a higher weighted average yield of 12.22 percent. In contrast, the longer-dated segment of the curve, covering maturities between 2035 and 2038, recorded no trading activity during the period, underscoring the cautious stance adopted by investors toward longer-term instruments.

Analysts attribute the sharp decline in turnover to a combination of uncertainty surrounding the pricing of the government’s upcoming bond issuance and broader market repositioning. The anticipated issuance of a new 7-year bond, expected to mature in 2033, has particularly influenced investor sentiment, as market participants await clearer guidance on yields before committing fresh capital.

According to Databank Group Research, secondary market activity is likely to remain subdued in the near term. The firm noted that many investors are staying on the sidelines as they monitor developments in the primary market, especially the final pricing guidance for the new bond.

In the interim, trading is expected to remain selective, with only limited support from routine portfolio adjustments, including month-end rebalancing by institutional investors. This cautious approach reflects the importance of yield clarity in shaping investment decisions, particularly in a market that is gradually rebuilding confidence following recent debt restructuring efforts.

Market watchers say a meaningful rebound in secondary market activity will depend largely on the outcome of the upcoming bond issuance. Clear pricing signals and strong investor participation in the primary market could help restore momentum, improve liquidity, and re-anchor the yield curve.

Until then, the bond market is expected to operate at a measured pace, with investors prioritising risk management and strategic positioning over aggressive trading.