Subscription to government T-bills falls in third quarter of 2021
Government treasury bills according to Asset Management Company (AMC), Tesah Capital, were undersubscribed in the third quarter of 2021.
According to Tesah Capital, overall subscription rate to government T-bills was 89.5% (Ghs 15.06 billion) down from the targeted Ghs 16.83 billion in the review quarter.
The decline in subscription to government’s short-term debt instruments, Tesah Capital notes in its Q3 2021 Ghana Economic and Financial Market report, was as a result of the shift in the interest of investors from investing in government T-bills to investing in the bond market in search of higher yields.
Interest rates for the 364-day, 182-day and 91-day T-bills, the AMC states, declined by 19 bps, 17 bps and 13 bps from the second quarter of 2021, to 16.14%, 13.21% and 12.49% respectively in Q3 2021.
Government, for the third quarter of 2021 set a target of raising some Ghs 23.2 billion in debts through the issuance of the 91, 182 and 364 days treasury bills, 2-years and 10-years dated bonds but managed to rake in some Ghs 19.6 billion.
Of the gross amount of Ghs 23.2 billion to be borrowed, Ghs 19.8 million was to be used to roll over maturities with the remaining amount used to meet government’s short-term financing requirements.
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Meanwhile, activity on the secondary bond market according to Tesah Capital, increased with the turnover increasing by 92.4% year-on-year in Q3 2021 to Ghs 49.37 billion, from Ghs 25.66 billion in Q3 2020.
Government securities, it further notes, accounted for 85.5% of total volumes traded in Q3 2021 down from the 90.8% recorded in Q2 2021 due to an increase in corporate bond issuances by ESLA Plc, Daakye and Letshego during the period.
Fixed Income Market in Q2 2020
Total value of Government of Ghana Notes and Bonds listed on the Fixed Income Market as at the end of Q2 2021 stood at Ghs 144,092.42 million.
Comparatively, it was Ghs100,265.88 million in the corresponding period in 2020. The total value of corporate bonds stood at Ghs 10,380.76 million at the end of Q2 2021 compared with Ghs 9,849.16 million in the same period in 2020.
The cumulative volume of trades on the GFIM from the beginning of the year to the end of Q2 2021 stood at Ghs 6,107,607.34 million and the number of trades was 126,943,862.
