- Fixed-Income Trading Turnover Surges To GH¢2.14bn As Treasury Bills and Repos Dominate Trading
Trading activity on the Ghana Fixed Income Market more than doubled on Wednesday, October 7, as investors channelled funds into Treasury bills and sell/buy-back transactions while demand for government bonds also strengthened.
The face value of securities traded rose to GH¢2.14bn from GH¢807.97m in the previous session, representing a 165.3 per cent increase.
The number of transactions climbed 70.3 per cent, from 4,341 to 7,391, indicating that the rise in turnover was supported by both increased investor participation and substantially larger transactions.
Average volume per transaction increased from about GH¢186,124 on Tuesday to approximately GH¢289,999 on Wednesday a rise of nearly 56 per cent.
The sharp increase reflects a market still heavily concentrated in government securities, with investors favouring instruments that offer liquidity, relatively predictable returns and the ability to support short-term funding operations.
Treasury bills remained the market’s dominant asset class, accounting for GH¢1.26bn, or 58.8 per cent of total turnover.
This represented a 117 per cent increase from the GH¢580.70m traded in the previous session. The number of Treasury-bill transactions rose from 4,298 to 7,299.
The August 9, 2027 bill was the most actively traded Treasury instrument, recording GH¢266.83m across 17 transactions. Its closing yield declined marginally to 9.0226 per cent from an opening level of 9.0343 per cent.
The December 7, 2026 bill followed with GH¢217.79m traded across 5,264 transactions. Its yield moved higher to 5.4519 per cent from 5.4259 per cent.
The difference in transaction patterns is notable. The August 2027 bill attracted a small number of relatively large trades, suggesting institutional activity. The December 2026 instrument recorded thousands of smaller transactions, pointing to broader market participation in the near-term security.
Other significant Treasury-bill activity included GH¢200.92m in the August 23, 2027 instrument and GH¢160.92m in the August 2, 2027 bill.
Yields generally edged lower across many of the longer-dated Treasury bills traded during the session, indicating modest price gains and steady investor demand.
The continuing preference for Treasury bills suggests that investors remain cautious about extending duration significantly, even as inflation moderates and the Bank of Ghana maintains its policy rate at 14 per cent.
Bills allow investors to retain flexibility while collecting nominal yields that remain positive against prevailing inflation. That combination makes them particularly attractive to banks, pension funds, companies and individual investors seeking to manage liquidity without assuming substantial duration risk.
Sell/buy-back transactions involving government securities recorded the largest percentage increase.
Volumes rose from GH¢14.93m to GH¢486.01m an increase of more than 3,100 per cent. These transactions accounted for 22.7 per cent of total market activity.
A February 2027 DDEP bond with an 8.35 per cent coupon dominated the repo segment, recording GH¢357.97m across only three transactions. A February 2029 DDEP bond accounted for another GH¢117.93m.
Together, the two securities represented almost 98 per cent of sell/buy-back volumes.
This concentration indicates that Wednesday’s repo surge was driven by a handful of large liquidity-management transactions rather than a broad increase across the segment.
Sell/buy-back trades allow institutions to raise short-term cash using government securities as collateral. The increase may therefore reflect temporary liquidity positioning among banks and other institutional investors rather than outright demand for long-term government debt.
Even after excluding these transactions, however, outright fixed-income turnover rose to approximately GH¢1.66bn from GH¢793.04m a gain of about 109 per cent. The session’s improvement was therefore not dependent solely on repo activity.
Trading in Domestic Debt Exchange Programme bonds increased to GH¢355.17m from GH¢205.40mn, representing growth of 72.9 per cent.
DDEP securities accounted for 16.6 per cent of total market turnover.
The February 2031 bond carrying an 8.95 per cent coupon was the most actively traded DDEP security, recording GH¢124.45m. Its yield declined by 23 basis points during the session to 14.28 per cent, while its closing price settled at GH¢83.09 per GH¢100 of face value.
The February 2030 bond recorded GH¢113.45m in trades and closed at a yield of 14.28 per cent, marginally below its 14.30 per cent opening level.
A February 2029 bond attracted GH¢36.63m and recorded one of the session’s more pronounced yield movements, falling from 13.93 per cent to 13.37 per cent. The corresponding price rose to GH¢90.67.
The decline in yields across several DDEP maturities suggests selective demand for duration, although large discounts to face value remain visible across the longer end of the curve.
The February 2032 bond, for instance, closed at GH¢81.21 with a yield of 14.22 per cent. The February 2037 instrument ended at GH¢73.59 and a yield of 14.93 per cent.
These prices show that investors continue to demand significant compensation for holding longer-dated restructured debt. Improved trading liquidity does not necessarily amount to a complete restoration of confidence.
Activity in newly issued government notes and bonds climbed from only GH¢150,000 to GH¢41.75m.
Almost the entire volume was concentrated in the September 2030 bond carrying a 12 per cent coupon. The security recorded GH¢40.74m across 38 trades and closed at a yield of 12.32 per cent, nine basis points above its opening yield.
The March 2033 bond, with a 12.5 per cent coupon, recorded GH¢1.01m in trades. Its yield declined from 12.60 per cent to 12.51 per cent.
The sizeable movement in the 2030 security suggests that the market is gradually developing price discovery around Ghana’s newer bonds. However, the concentration of almost 98 per cent of the segment’s turnover in a single instrument shows that liquidity remains uneven.
Corporate bond activity moved in the opposite direction, declining by 92.5 per cent from GH¢6.79m to GH¢510,000.
Only three corporate bond trades were recorded.
A COCOBOD bond maturing in August 2027 accounted for GH¢300,000, while another maturing in August 2028 recorded GH¢210,000.
The collapse in corporate turnover highlights the difficulty private issuers face in competing with government securities for investor funds. Government instruments offer superior secondary-market liquidity and are generally treated as carrying lower credit risk, making it harder for corporate bonds to attract consistent trading unless they provide sufficiently compelling yields.
The October 7 session points to stronger liquidity across Ghana’s fixed-income market, but the composition of activity remains defensive.
Treasury bills and repos together accounted for more than 81 per cent of turnover. Investors are participating more actively, but they continue to favour liquidity, short maturities and government-backed instruments.
DDEP bond activity is also improving, with selective yield compression indicating demand at particular points along the curve. Yet deeply discounted prices on longer-dated instruments show that concerns about duration, fiscal credibility and reinvestment risk have not disappeared.
In the near term, market direction will depend on inflation, the cedi, government borrowing requirements and signals from the Bank of Ghana.
If inflation remains contained and exchange-rate pressure does not intensify, investors may gradually extend into medium- and longer-term bonds to secure higher yields. Renewed currency weakness or fiscal uncertainty would instead reinforce the preference for Treasury bills and short-term liquidity instruments.
Wednesday’s figures show that liquidity has returned forcefully. The more consequential question is whether that liquidity will eventually move beyond short-term government paper into longer-dated bonds and private-sector financing.
