Investor sentiment appears to be gradually improving in Ghana's treasury bill market, as recent auction results revealed a slight rebound in confidence. For the first time in a month, the government recorded a marginal oversubscription in its treasury bills issuance, signalling a potential shift in market dynamics.
The government received a total of GH¢6.67 billion in bids during the latest auction, surpassing its GH¢6.68 billion target by accepting GH¢6.74 billion. This comes after three consecutive weeks of underperformance, where the government failed to meet its fundraising goals.
According to a market update from Databank Research, the high acceptance rate suggests a growing alignment between investor expectations and the Treasury’s yield offerings. This could point to increasing confidence in the prevailing interest rate levels, which have been trending downward.
Last week’s auction showed a positive outlook for government financing, as 98% of the GH¢6.87 billion tendered was accepted, exceeding both the target and covering upcoming maturities amounting to GH¢6.43 billion.
Yields also saw a modest decline across all maturities. The 91-day bill dropped by 20 basis points to 15.45%, the 182-day bill decreased by 29 basis points to 16.21%, and the 364-day bill slipped by 18 basis points to settle at 18.65%. This modest yield compression reflects the Treasury’s effort to sustain funding without escalating borrowing costs.
Market analysts predict that this trend of stable or decreasing yields could continue in the short term, especially if the Treasury maintains near-target issuance levels to meet weekly maturities, which currently average GH¢6.0 billion.
The rebound in investor interest and the government’s strategic acceptance of bids are key indicators of stabilisation in the short-term securities market. While the uptick in confidence is still modest, the consistency of results over the coming weeks will be crucial in determining whether the recovery trend is sustainable.
The treasury bill market plays a central role in the government’s domestic financing strategy, and recent developments suggest a possible shift towards improved liquidity and investor trust. With market confidence appearing to return, stakeholders will continue monitoring interest rate movements and future auction performance to assess the broader economic implications.
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