Demand for Ghana government securities has strengthened significantly ahead of the presentation of the 2027 Budget Statement and Economic Policy, although investors are increasingly favouring shorter-term Treasury instruments as they await clarity on the Government’s borrowing plans and fiscal outlook.
Investors submitted bids totalling GH¢5.01 billion at the latest Treasury bill auction for the week ended November 6, almost double the GH¢2.55 billion recorded at the preceding auction and 41.5 per cent above the Government’s GH¢3.54 billion target.
The Government accepted GH¢4.11 billion, exceeding its target by approximately GH¢564 million, in what represents a strong show of demand for domestic government securities ahead of Finance Minister Dr Cassiel Ato Forson’s November 12 budget presentation.
However, the maturity distribution of the bids suggests that investors are adopting a cautious approach to interest-rate and fiscal risks, with a pronounced preference for short-term instruments.
The 91-day Treasury bill attracted approximately GH¢3 billion, representing about 60 per cent of total subscriptions. The 182-day instrument received GH¢1.62 billion, while the 364-day bill attracted just GH¢388.45 million.
The concentration of subscriptions in the shortest maturity indicates that investors are keen to preserve liquidity and retain flexibility rather than commit funds for extended periods before assessing the Government’s 2027 financing programme.
Yields remained relatively subdued, with the 91-day rate settling at 4.56 per cent, the 182-day at 6.20 per cent and the 364-day at 9.48 per cent.
While the 91-day yield edged upwards by two basis points, the 182-day and 364-day rates declined by six and 12 basis points respectively.
The combination of strong subscriptions and relatively low yields suggests that investors remain comfortable with the Government’s immediate debt-servicing capacity. Nevertheless, the preference for shorter maturities points to some reluctance to assume longer-term exposure until the fiscal direction becomes clearer.
The secondary fixed-income market has also shown signs of reduced trading activity, reinforcing indications that investors are becoming more selective in their positioning.
Data from the Ghana Fixed Income Market (GFIM) show transactions of GH¢1.44 billion on November 4, GH¢958.30 million on November 5 and approximately GH¢1.20 billion on November 6.
The November 6 transactions comprised GH¢682.01 million in Domestic Debt Exchange Programme bonds and GH¢503.25 million in Treasury bills. Corporate bonds accounted for GH¢5.78 million, while commercial paper contributed GH¢2.02 million.
The average daily turnover across the three sessions was approximately GH¢1.20 billion, significantly below October’s average of about GH¢2.1 billion, based on total monthly trading of GH¢48.13 billion over approximately 23 sessions.
A separate Tesah Capital Research assessment also identified a 43.7 per cent contraction in secondary fixed-income trading over the latest comparison week.
The reduced turnover suggests that investors may be holding existing securities rather than actively trading them while awaiting clarity on the Government’s financing requirements, refinancing strategy and the potential implications for bond valuations.
The interbank market remains relatively liquid, with the Bank of Ghana’s monetary policy rate at 14 per cent and the interbank weighted-average rate reported at approximately 10 per cent in the central bank’s October investor bulletin.
Meanwhile, the interbank exchange rate stood at GH¢11.64 to the US dollar on November 6, marginally stronger than GH¢11.66 the previous day.
Investors will be looking to the Budget for assurances that domestic financing requirements will not generate renewed liquidity pressures, destabilise interest rates or undermine exchange-rate stability.
The key indicators will include the projected fiscal deficit, domestic borrowing programme, revenue mobilisation targets and debt-service commitments.
For investors, the challenge is determining whether the Government can sustain macroeconomic stability while financing its ambitions for productive-sector investment and employment creation.
The November 12 statement will therefore be critical in determining whether current demand for short-term government securities translates into renewed appetite for longer-dated domestic debt.
By: Toma Imirhe / businesspostonline
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