T-bills auction rake in GH¢ 2.13bn exceeding offer target by 20%
Last week’s T-bill auctions garnered remarkable results, surpassing expectations and signaling robust investor participation. The auctions successfully raised a total of GH¢2.13 billion, surpassing the initial offer target by an impressive 20%, according to the research department of GCB Capital, a prominent investment bank in the country.
GCB Capital Research revealed that the Treasury accepted all bids tendered at the auctions, exceeding not only the auction target but also the refinancing obligation due on July 17, 2023, by a significant 27%. This outcome underscores the strong market demand for T-bills, showcasing investor confidence in the country’s debt instruments.
However, the auctions witnessed an increase in clearing yields, which determine the interest rates on the T-bills. The average yield for the 91-day T-bill climbed by 39 basis points (bps) to settle at 24.69%, while the 182-day T-bill cleared at 26.41%, representing a 38 bps rise.
This upward movement in yields indicates a higher cost of borrowing for the Government through T-bill issuance. Investors demanded greater returns to offset perceived risks, possibly driven by concerns surrounding inflationary pressures or the overall macroeconomic stability in the country.
While the auctions’ strong results highlight robust investor interest and confidence, the concurrent rise in clearing yields suggests a cautious sentiment among investors. Monitoring yield fluctuations and investor demand will be crucial in understanding market dynamics and gauging investor sentiment in Ghana’s fixed-income market.
As the government moves forward, effectively managing investor expectations, monitoring inflation, and maintaining macroeconomic stability will be critical factors in sustaining investor confidence and ensuring the continued success of T-bill auctions.
