- GFIM Turnover Falls 10% to GH¢2.36 billion as Investors Shift into Treasury Bills
Trading on the Ghana Fixed Income Market slowed on October 26, but the headline decline concealed a significant change in investor positioning: activity moved away from restructured government bonds and towards short-term Treasury bills, while transactions became fewer and considerably larger.
Total market turnover reached GH¢2.36 billion, materially down 10.39 percent from GH¢2.64 billion on October 23. The number of trades fell more sharply, declining 42.90 percent from 641 to 366. Consequently, the average transaction size rose from about GH¢4.11 million to GH¢6.46 million, suggesting that institutional block trades, rather than broad-based dealing, drove the session.
That distinction matters. A decline in aggregate turnover normally implies weaker liquidity, but the rise in average ticket size indicates that sizeable investors remained active. The market was not deserted; it was narrower. Capital was concentrated in a small number of instruments that offered either short-duration protection or sufficient yield to compensate investors for holding longer-dated government debt.
Treasury bills supplied the strongest evidence of that repositioning. Turnover in bills climbed 60.89 percent to GH¢970.94 million from GH¢603.48 million in the previous session, even though the number of trades dropped to 293 from 544. Their share of total market activity consequently surged to 41.08 percent from 22.88 percent.
The increase was heavily concentrated. A bill maturing on July 5, 2027 generated GH¢577.72 million, equivalent to 59.50 percent of Treasury-bill turnover and 24.45 percent of the entire market. Its closing yield was 8.0941 percent. Together, the four most actively traded bills accounted for roughly 89 percent of the segment, underlining that the apparent surge in demand was focused rather than evenly distributed across the curve.
The combination of higher bill turnover and fewer trades points to strong institutional preference for liquidity, capital preservation and shorter exposure. Investors appear willing to accept lower yields in exchange for instruments that mature sooner and carry less price sensitivity than long bonds. This may reflect expectations of stable or easing inflation, but it also signals caution: investors are committing substantial cash without extending duration aggressively.
DDEP bonds remained the market’s largest segment, recording GH¢1.39 billion in turnover. Yet activity fell 29.49 percent from GH¢1.97 billion, reducing the segment’s market share to 58.65 percent from 74.53 percent. The decline shows that restructured bonds still anchor secondary-market liquidity, although their dominance weakened markedly during the session.
The February 2032 DDEP bond was the standout instrument, attracting GH¢629.30 million in regular trades at a closing yield of 14.53 percent. Including sell-and-buyback activity, its turnover reached about GH¢631.70 million. It represented nearly 46 percent of DDEP activity and more than one-quarter of total market turnover.
Combined, the leading 2032 bond and July 2027 Treasury bill generated just over 51 percent of all turnover. Such concentration improves tradability in the favoured securities but exposes the underlying weakness of market breadth. A healthy fixed-income market requires liquidity across several maturities, enabling investors to price risk, rebalance portfolios and construct a reliable yield curve. When half of trading rests on two instruments, headline turnover can overstate depth.
Yield movements across DDEP bonds were mixed. The 2027 benchmark eased by 11 basis points to 10.95 percent, while the 2029 yield declined eight basis points to 14.04 percent. The 2031 yield, however, rose 17 basis points to 14.60 percent, while the heavily traded 2032 bond added three basis points. The 2028 yield increased 30 basis points to 12.55 percent.
This uneven pattern suggests investors were distinguishing between individual maturities rather than repricing Ghanaian sovereign risk uniformly. The yield curve continues to reward holders for moving beyond the shortest restructured bonds, but the premium is no longer rising smoothly with maturity. That creates opportunities for active managers, yet it also complicates valuation for institutions that must match long-term liabilities. Pension funds may view selected longer bonds as attractive income assets, while banks could favour bills because of their shorter maturity and easier liquidity management. The split between those strategies helps explain why both segments remained active even as their relative shares changed sharply during the day.
Larger movements at the long end should be interpreted carefully. The 2033 yield jumped 78 basis points to 15 percent, but turnover was only GH¢2.41 million in a single trade. Similarly, increases in the 2035, 2036 and 2038 yields occurred on limited activity. Thin trading can produce price changes that look economically significant without representing a broad reassessment by investors.
Activity outside government securities was negligible. Sell-and-buyback transactions fell 93.74 percent to GH¢4.14 million from GH¢66.20 million. Corporate-bond turnover disappeared after recording GH¢1.99 million previously. Commercial paper returned with one GH¢1.04 million transaction, while a new 2030 government bond generated GH¢1.18 million at a 12.50 percent yield. These trades added diversity, but their combined weight was too small to alter the market’s sovereign concentration.
Government securities accounted for virtually all activity, reinforcing the structural challenge facing Ghana’s capital market. Banks, pension funds and asset managers can transact in sovereign paper at scale, but companies still struggle to access comparable secondary-market liquidity. Until corporate issuance and trading deepen, the GFIM will remain principally a channel for government financing and institutional liquidity management rather than a broad capital-allocation platform.
The immediate outlook is therefore balanced. Strong Treasury-bill demand should support short-term government funding and may keep yields contained if liquidity remains ample. Demand for selected DDEP maturities also shows that investors will take duration when pricing is attractive. However, the fall in trade count, concentration in two securities and disappearance of corporate-bond activity caution against reading the session as an across-the-board strengthening.
The next sessions will show whether October 26 marked a durable rotation into bills or merely reflected a few large portfolio adjustments. A sustained increase in bill activity alongside stable DDEP yields would indicate defensive liquidity management. Broader trading across maturities, by contrast, would signal growing confidence. For now, the market’s message is clear: investors remain engaged, but liquidity, selectivity and execution size matter more than the headline turnover alone.
