The Ghana Fixed Income Market (GFIM) recorded a GHS 1.79 billion turnover on Monday, May 11, from 193 trades. This figure represents a significant increase from the GHS 677.25 million recorded on Friday, May 8, showing strong investor interest at the week's start.
Treasury bills were the primary drivers of this activity, accounting for GHS 1.06 billion across 148 trades. This constitutes about 59.04% of the total turnover, reinforcing the market's continued preference for government's short-term debt instruments. Investors are currently focused on managing their cash flow and carefully choosing investment durations, meaning how long their money is tied up.
This rebound in GFIM activity aligns with a broader trend of increased interest in short-term government securities. The strong appetite for Treasury bills follows a successful primary auction last week, where the government accepted GHS 6.09 billion from bids totalling GHS 7.83 billion, against a target of GHS 4.35 billion. This indicates that investors are eager to lend money to the government for short periods.
The market's performance, as reported by Norvan Reports, shows that Treasury bills remained the main source of cash flow in the market. Sell/buy-back trades in Government of Ghana notes and bonds also contributed significantly, reaching GHS 624.67 million across 34 trades, or 34.81% of the total. Together, these two segments accounted for over 93% of all market activity on Monday.
The continued dominance of Treasury bills and sell/buy-back transactions means market liquidity is concentrated in these areas. While bonds from the Domestic Debt Exchange Programme (DDEP) saw GHS 107.47 million in trades, and new Government of Ghana notes and bonds recorded GHS 3.00 million, older government bonds and corporate bonds showed no trading activity. This suggests that certain parts of the market are not as active as others.
For investors, this market behaviour signals a clear preference for investments that offer quicker returns and more flexibility. The environment of lower inflation, decreasing yields, and better confidence in Ghana's government bonds further supports this trend. As the market progresses, observers will watch to see if investor confidence expands to longer-term government bonds and corporate securities, or if the focus remains on short-term instruments.
The largest Treasury bill transaction involved an instrument that traded GHS 494.07 million across two trades. This particular instrument closed with a yield, or return, of 4.99%. In the DDEP bond segment, the most active instrument saw GHS 75.97 million across six trades, closing with a yield of 11.06%. These figures provide specific examples of the yields investors are currently accepting.
The market's focus on short-term and structured deals points to ongoing efforts by investors to manage risks in the economy. The lack of trading in corporate bonds highlights a shallow market in this segment, meaning there are not many buyers and sellers. This narrow trading pattern suggests that despite a stronger opening, the overall market remains selective in its appeal to investors.