Investor appetite for short-term government securities remained robust for the second consecutive auction, with total bids exceeding the Treasury’s target by GH¢1.17 billion.
Data released by the Bank of Ghana showed that investors submitted bids worth GH¢5.80 billion against a target of GH¢4.30 billion, representing an oversubscription rate of 34.8 percent. Out of the total amount tendered, the Treasury accepted GH¢5.48 billion.
Although demand remained strong, the government rejected a portion of the bids, indicating efforts to maintain pricing discipline by avoiding relatively expensive borrowing costs.
The 91-day bill attracted the highest investor interest, recording GH¢3.83 billion in bids, with GH¢3.65 billion accepted. The 182-day bill received GH¢709.83 million in bids, of which GH¢671.72 million was accepted.
Meanwhile, the 364-day bill recorded GH¢1.26 billion in bids, with GH¢1.15 billion accepted.
Market analysts attributed the strong demand partly to a softer target at the auction, as well as renewed investor preference for safer assets amid recent weakness in the equity market. The attractiveness of short-term government securities also continued to support participation.
Despite the heavy demand, yields increased across all tenors, suggesting investors continue to price in inflation risks ahead of the upcoming Monetary Policy Committee meeting.
The yield on the 91-day bill rose by 3 basis points to 4.91 percent, while the 182-day bill edged up by 1 basis point to 7.04 percent from 7.03 percent previously. The 364-day bill recorded the sharpest increase, climbing by 25 basis points to 10.38 percent from 10.13 percent.
Looking ahead, the Treasury is targeting approximately GH¢4.49 billion in the next auction as market participants await the Monetary Policy Committee’s decision on interest rates.
Source: businesspostonline
