- Fixed-Income Trading Drops To GH¢545.83m As Demand Concentrates In 2032 Bond
Trading activity on the Ghana Fixed Income Market fell sharply at the start of October, with total turnover declining by nearly 79 per cent as investor demand shifted away from Treasury bills and concentrated in a small number of restructured government bonds.
Total securities traded on October 1 amounted to GH¢545.83m, down from GH¢2.58bn in the preceding session. The number of transactions also fell to 252 from 806, representing a 68.7 per cent decline.
The scale of the contraction suggests that the exceptionally high turnover recorded on September 30 was driven partly by month-end portfolio adjustments rather than a sustained increase in secondary-market liquidity.
Treasury bills remained the largest individual asset class by volume, accounting for GH¢306.35m, or 56.1 per cent of total market activity. But this was substantially below the GH¢1.75bn traded a day earlier, an 82.5 per cent decline.
DDEP bonds followed with GH¢228.74m, equivalent to 41.9 per cent of turnover. Their volume was down 72.3 per cent from GH¢825.90mn in the previous session, although their share of the market rose from 32 per cent.
The numbers reveal an important distinction between absolute demand and market composition. Investors traded fewer DDEP bonds, but the category became relatively more important because Treasury-bill activity contracted even faster.
Trading in the DDEP segment was heavily concentrated in the February 2032 bond carrying a 9.10 per cent coupon.
The security recorded turnover of GH¢131.94m through two transactions, accounting for 57.7 per cent of all DDEP bond activity and about one-quarter of total market turnover.
Its closing yield fell by 33 basis points to 14.31 per cent from an opening level of 14.64 per cent, while the closing price rose to GH¢80.88.
The combination of high turnover, a lower yield and a higher price points to strong demand for the instrument during the session. But the fact that GH¢131.94mn was executed in only two transactions also indicates that the movement was probably driven by large institutional trades rather than broad-based participation.
Demand was more restrained across the rest of the DDEP curve.
The February 2028 bond recorded GH¢40.23m in eight trades, with its yield edging five basis points higher to 12.44 per cent. The February 2031 security traded GH¢30.59m as its yield declined seven basis points to 14.40 per cent.
The February 2030 bond attracted GH¢13.55m, closing at a yield of 14.23 per cent, 27 basis points below its opening level. By contrast, the February 2029 security recorded GH¢11.19m in turnover and closed 27 basis points higher at 13.79 per cent.
These movements produced an uneven yield curve. Some medium- and longer-dated securities benefited from buying interest, while others faced modest price pressure.
Such divergence indicates that investors are not making a uniform call on Ghana’s interest-rate outlook. Demand is being shaped by the liquidity, maturity and pricing of individual securities rather than a broad rush into government bonds.
Activity in the newly admitted four-year Government of Ghana bond remained limited.
The September 2030 instrument recorded turnover of only GH¢78,178 in one transaction, compared with GH¢600,000 in the previous session. Its closing yield increased by 23 basis points to 11.50 per cent, while the price fell from GH¢102.25 to GH¢101.53.
The volume was too small to treat the yield change as a definitive market repricing. However, the move suggests that investors were demanding slightly higher compensation for holding the security.
The limited secondary-market activity also highlights the challenge facing newly listed government instruments. Formal admission to trading creates market access, but sustained liquidity depends on regular two-way quotes, a broader investor base and sufficient willingness among holders to sell.
No trades were recorded in old government notes and bonds, compared with GH¢123,047 in the previous session.
The decline in Treasury-bill activity was the main reason total market turnover weakened.
The most actively traded bill was the instrument maturing on June 21, 2027, which recorded GH¢52.83mn across three transactions and closed at a yield of 8.48 per cent.
That was considerably below the previous session’s largest Treasury-bill trade, when the December 7, 2026 bill recorded GH¢312.91m in turnover.
Other significant October 1 trades included GH¢42.26m in the May 31, 2027 bill, GH¢34m in the May 24, 2027 instrument and GH¢29.95m in the March 15, 2027 bill.
Unlike the previous session, when activity was concentrated in a small number of exceptionally large positions, Treasury-bill demand on October 1 was spread across several maturities.
This broader distribution may indicate investors are matching securities more closely to their individual liquidity requirements. It may also reflect reduced appetite for making large directional bets immediately after month-end.
Corporate-bond activity moved against the wider market decline.
Turnover increased more than fourfold to GH¢2.38m from GH¢519,374. Trading was entirely concentrated in two Ghana Cocoa Board securities.
The August 2028 cocoa bond accounted for GH¢1.70m across four transactions, while the August 2027 instrument recorded GH¢677,200.
Even after the increase, corporate securities represented only 0.4 per cent of total turnover. The segment therefore remains too small to provide meaningful diversification from government debt.
Sell-and-buy-back transactions rose sharply to GH¢8.28m from GH¢852,094. The increase was led by GH¢4.29m in the February 2029 DDEP bond, GH¢2.98mn in the February 2027 security and GH¢1.01mn in the February 2028 instrument.
This rise suggests greater use of government securities for short-term liquidity management, even as outright secondary-market trading slowed.
The October 1 session points to a market that remains liquid in headline terms but is still highly dependent on large institutional transactions.
A single DDEP security accounted for almost 58 per cent of restructured-bond turnover, while the largest Treasury-bill instrument represented 17.2 per cent of bill activity. This concentration means daily market totals can change sharply when one or two institutional trades disappear.
The immediate outlook will depend on whether Treasury-bill turnover recovers after the month-end adjustment and whether the demand that lifted the 2032 DDEP bond extends to other parts of the yield curve.
Investors will also watch the cedi, inflation expectations, government refinancing requirements and the Bank of Ghana’s policy stance. Renewed exchange-rate pressure or higher fuel costs could limit the scope for further declines in longer-term yields, even if domestic inflation remains contained.
The opening session of October therefore offered a more cautious signal than the turnover figure alone suggests. Activity remained substantial, but liquidity narrowed, transaction numbers fell and price movements differed sharply across maturities.
For Ghana’s fixed-income market, the next test is whether demand broadens beyond selected Treasury bills and DDEP instruments or remains dependent on occasional large trades that make liquidity appear deeper than it is.
