Bond market activity dips ahead of mid-year budget
Trading activity on Ghana’s secondary bond market dipped marginally last week, with total turnover declining by 2.63 percent week-on-week to GHS2.06 billion, as investors braced for fiscal policy signals ahead of the upcoming Mid-Year Budget Review scheduled for Thursday, July 24, 2025.
Market data indicates that trading volumes were once again heavily skewed towards the General Category bonds, with the February 2027 paper emerging as the most actively traded instrument.
According to market observers, investor focus remained centered on the 2027 to 2030 bond maturities, which together accounted for 56 percent of total market volumes. These securities cleared at a weighted average yield to maturity (YTM) of 17.81 percent, reflecting relatively stable investor sentiment in the short- to medium-term segment of the domestic bond curve.
Meanwhile, the longer-dated instruments, specifically bonds maturing between 2031 and 2038 contributed 44 percent of total volumes for the week. These cleared at an average YTM of 17.77 percent, slightly below the shorter maturities, suggesting a modest preference for medium-term risk among market participants.
Despite the relatively subdued activity, market analysts view the drop as part of a temporary cautionary trend rather than a structural slowdown.
The upcoming budget statement is expected to provide updated guidance on government financing plans, revenue performance, and progress on key IMF program benchmarks, particularly those related to debt sustainability and the Domestic Debt Exchange Program (DDEP) recovery trajectory.
Investors are also keenly watching for signals on new issuances, tax measures, and capital market reforms, all of which could influence demand and pricing across the yield curve.
“Trading activity is likely to remain moderate this week as market players await policy clarity. Post-budget, we could see repositioning depending on the tone and details of government fiscal projections,” a trader from a local bank noted. The Ghana Fixed Income Market (GFIM) has seen improved participation and liquidity in recent months following efforts to restore investor confidence after the DDEP. However, participants continue to monitor inflation trends, currency stability, and monetary policy direction as key inputs into their fixed income strategies.
