T-Bills: Treasury accepts 98.7% of bids; yields rise despite smaller auction size
In a recent T-bill auction, the Treasury managed to attract substantial demand totaling GH¢2.95 billion, even in the face of a reduced target size on offer, according to insights from GCB Capital Research. This demand figure, which represents a week-on-week decline of 16.51%, exceeded the auction target of GH¢2.60 billion. Furthermore, it notably surpassed the GH¢2.43 billion maturity obligation scheduled for September 11, 2023.
The Treasury, in its response to the robust demand, accepted 98.7% of the submitted bids, indicating an oversubscription of 12% above the auction target and 19% beyond the impending maturities.
Despite the smaller target size and the buoyant demand, the recent auction yielded higher rates across the spectrum of T-bill maturities. Specifically, the yields on the 91-day, 182-day, and 364-day bills increased by 43 basis points, 41 basis points, and 31 basis points week-on-week, respectively. These yields now stand at 27.79%, 28.71%, and 31.97%, respectively.
The resilience of T-bill yields in the face of reduced offerings underscores the continued demand for government debt instruments in the Ghanaian market. Investors appear to be seeking higher returns amid an evolving economic landscape, demonstrating their readiness to accept relatively higher yields, even as the Treasury moderates its issuance.
