Treasury Bills oversubscription to continue amidst debt restructuring gains, says Courage Boti
Financial analyst, Courage Boti, anticipates that the government’s treasury bills will sustain their trend of being oversubscribed in the forthcoming weeks. This projection is underpinned by the government’s successful debt restructuring endeavors, which have bolstered investor confidence in the country’s financial instruments.
For two consecutive weeks, the government has witnessed an oversubscription of its treasury bills, with the previous week registering an impressive 15.10 percent oversubscription. The most recent data from the Bank of Ghana reveals that investors contributed slightly over GHS 3.52 billion, surpassing the government’s target of GHS 3.06 billion, indicating a robust 15.10% oversubscription.
Mr Boti attributes this positive trend to a series of strategic moves by the government. One key development is the government’s timely payment of coupons on the first DDEP (Domestic Debt Exchange Programme) bonds, a move that has significantly restored confidence in the market. Additionally, the government successfully channeled pension funds into the DDEP, initiating a process that has begun settling, potentially leading to increased activity in the secondary bonds market.
“What this may mean is that there could be more activities on the secondary bonds market, and if evaluations turn out to be favorable, we may witness some gradual return of activities to that segment of the market,” he noted.
The figures reported by the Bank of Ghana reveal that a substantial portion of the bids came in for the 91-day bill, with investors tendering a total of GHS 2,639.12 million for the 3-month financial instrument. Remarkably, the government accepted all the bids tendered, indicating strong investor appetite.
Similarly, the 182-day bill saw investors tendering GHS 650.63 million, and all bids were accepted. The 364-day bill garnered GHS 237.08 million in bids, with the government again accepting all offers.
Despite the optimistic trend in treasury bill subscriptions, interest rates in the money market have continued to rise. The 91-day T-bill, for instance, has increased from 26% to 27% over the past week, reflecting ongoing shifts in the financial landscape.
As the government’s debt restructuring efforts continue to bear fruit and investor sentiment remains positive, the oversubscription of treasury bills serves as a testament to Ghana’s improving economic outlook and its attractiveness as an investment destination in the region.
