Trading activity on the Ghana Fixed Income Market more than doubled on Wednesday, October 7. The face value of securities traded rose to GHS 2.14 billion from GHS 807.97 million in the previous session. This represents a significant 165.3 per cent increase in turnover.
Investors channeled funds into Treasury bills and sell/buy-back transactions, also known as repos. Demand for government bonds also strengthened during the session. The number of transactions climbed 70.3 per cent, from 4,341 to 7,391, showing increased investor participation and larger individual trades.
This sharp increase reflects a market still heavily concentrated in government securities. Investors continue to favour instruments that offer liquidity, which means they can be easily bought or sold without affecting their price much. They also seek relatively predictable returns and the ability to support short-term funding operations for institutions.
Treasury bills remained the market’s dominant asset class, accounting for GHS 1.26 billion. This figure represents 58.8 per cent of the total turnover. This was a 117 per cent increase from the GHS 580.70 million traded in the previous session. The number of Treasury-bill transactions also rose from 4,298 to 7,299.
The August 9, 2027 bill was the most actively traded Treasury instrument, recording GHS 266.83 million across 17 transactions. Its closing yield, which is the return an investor gets, declined marginally to 9.0226 per cent. The December 7, 2026 bill followed with GHS 217.79 million traded across 5,264 transactions. Its yield moved higher to 5.4519 per cent.
The difference in transaction patterns is notable. The August 2027 bill attracted a small number of relatively large trades, suggesting activity from large institutions. The December 2026 instrument recorded thousands of smaller transactions, pointing to broader market participation from various investors in this shorter-term security.
Other significant Treasury-bill activity included GHS 200.92 million in the August 23, 2027 instrument. Another GHS 160.92 million was traded in the August 2, 2027 bill. Yields generally edged lower across many of the longer-dated Treasury bills traded, indicating modest price gains and steady investor demand.
The continuing preference for Treasury bills suggests investors remain cautious about extending duration significantly. Duration refers to how sensitive a bond's price is to changes in interest rates. Investors prefer flexibility even as inflation moderates and the Bank of Ghana maintains its policy rate at 14 per cent.
Treasury bills allow investors to retain flexibility while collecting nominal yields that remain positive against prevailing inflation. This combination makes them particularly attractive to banks, pension funds, companies, and individual investors. These entities seek to manage their cash flow without assuming substantial duration risk, which is the risk of losses due to interest rate changes.
Sell/buy-back transactions, also known as repurchase agreements or repos, involving government securities recorded the largest percentage increase. Volumes rose from GHS 14.93 million to GHS 486.01 million, an increase of more than 3,100 per cent. These transactions accounted for 22.7 per cent of total market activity.
A February 2027 Domestic Debt Exchange Programme (DDEP) bond with an 8.35 per cent coupon dominated the repo segment. It recorded GHS 357.97 million across only three transactions. A February 2029 DDEP bond accounted for another GHS 117.93 million. Together, these two securities represented almost 98 per cent of sell/buy-back volumes.
This concentration indicates that Wednesday’s repo surge was driven by a handful of large liquidity-management transactions. It was not a broad increase across the entire segment. Sell/buy-back trades allow institutions to raise short-term cash using government securities as collateral. The increase may therefore reflect temporary liquidity positioning among banks and other institutional investors.
Even after excluding these significant repo transactions, outright fixed-income turnover still rose to approximately GHS 1.66 billion. This was up from GHS 793.04 million, a gain of about 109 per cent. The session’s improvement was therefore not dependent solely on repo activity, showing broad market strength.
Trading in Domestic Debt Exchange Programme bonds increased to GHS 355.17 million from GHS 205.40 million. This represents growth of 72.9 per cent. DDEP securities accounted for 16.6 per cent of total market turnover. The February 2031 bond, carrying an 8.95 per cent coupon, was the most actively traded DDEP security, recording GHS 124.45 million. Its yield declined by 23 basis points during the session to 14.28 per cent.