T-Bills dominate secondary market as bond trades remain subdued
Last week, the secondary market activity on the Ghana Fixed Income Market (GFIM) was primarily driven by trading in Treasury bills (T-bills), while bond trades experienced a general lack of momentum. The aggregate volume of bonds traded saw a substantial increase of 130.57% week-on-week (w/w), reaching GH¢260 million. Conversely, T-bill volumes declined by 3.96% w/w, amounting to GH¢1.09 billion. Bond trading predominantly occurred close to par value, and the majority of activity focused on the front end of the yield curve.
One key factor influencing market dynamics is the significant yield differentials between nominal money market instruments, such as T-bills, and bonds. As nominal money market instruments offer higher returns, investor attention has been largely directed towards these instruments, resulting in subdued activity on the bond market.
Given the current environment, it is expected that activity in the secondary market could continue to remain subdued for some time. Market participants will closely monitor the situation, particularly in the bond market, for any potential shifts or catalysts that could spur increased trading activity.
