In the midst of raging anger over the recent news of the Bank of Ghana making huge losses of over GH¢60 billion and also printing money to finance government’s mismanagement, investors decided to punish the government at the short end of the market as the government misses its Treasury bills auction target, signaling lack of investor confidence.
At the end of the auction, the Government of Ghana’s Treasury bills auction, with a significant value of GH¢2,261 million, encountered a demand setback as it fell short of its target by GHS 84 million, denting government’s hope of mobilizing more domestic debt to finance its mid-year budget.
During the auction, T-bills worth GH¢1,384 million, GH¢649 million, and GH¢144 million were accepted for the 91-Day, 182-Day, and 364-Day bills, respectively. The subdued demand for these short-term government securities reflects investor caution and hints at prevailing concerns over the economic outlook. Also, the lackluster response by investors highlighted uncertainties prevailing in the market.
Yield movement across the various maturities showed mixed trends, with different tenors attracting varied responses from the market. The 91-Day T-Bills settled at a yield of 25.5%, reflecting the risk appetite for short-term investments. In comparison, the 182-Day T-Bills commanded a slightly higher yield, settling at 27.2%. The longest maturity, the 364-Day T-Bills, registered the highest yield at 30.4%, signaling investors’ preference for higher returns amid uncertainties.
Looking forward, the Government aims to raise GH¢3,065 million in the next auction (Tender #1863) for the combined issuance of the 91-Day, 182-Day, and 364-Day T-Bills. Achieving this ambitious target will require close monitoring of market sentiment and economic indicators, considering the recent shortfall.
The setback in demand for the Treasury bills underscored the importance of prudently managing the government’s borrowing program amid the evolving economic landscape. Both domestic and international investors will closely evaluate macroeconomic factors, inflationary pressures, and fiscal policies while making investment decisions.
As the Government navigates these challenges, investors are expected to remain vigilant and assess the risk-return dynamics of government T-bills. Market participants will keep a watchful eye on developments, seeking signals of stability and recovery in the Ghanaian economy.
Investors Shift Focus to the Equities Market
Meanwhile as investors lower their involvement in the T-bills market, they shifted their focus to the stock market as the Ghana Stock Market experienced another robust performance last week.
The stock market GSE-Composite Index surged by an impressive 5.31% as investor sentiment remained bullish throughout last week, propelling the index to new heights and driving the year-to-date performance to a remarkable 27.97%.
However, despite broader market gains, the ongoing financial sector challenges persist, as the GSE-Financial Stocks Index managed only a modest increase of 0.50%, highlighting the ongoing challenges faced by the financial sector in the country. The year-to-date performance for financial stocks stands at -16.02%, signaling a tough road ahead for this segment of the market.
In a significant development, market capitalization witnessed a substantial leap, adding GH¢1.714 billion in value from the previous week, resulting in a new milestone of GH¢73.71 billion. This surge in market cap reflects growing investor confidence in the Ghana Stock Exchange and its prospects.
Trading activity remained vibrant, with a total of twenty-one (21) equities changing hands during the week. Notable gainers included Guinness Ghana Breweries Limited (GGBL), Scancom PLC. (MTNGH), and Societe Generale Ghana Limited (SOGEGH). GGBL posted an impressive gain of GH¢0.25, closing at GH¢2.80, while MTNGH and SOGEGH recorded gains of GH¢0.12 and GH¢0.07, respectively, closing at GH¢1.55 and GH¢0.80.
Scancom PLC (MTNGH) emerged as the standout player, accounting for a dominant 94.15% of the week’s total traded value. The company’s traded volume amounted to ¢8,609,720.64, highlighting its significant influence on overall market activity.
During the week, a total of 5,832,677 shares were traded, cumulating to a total value of GH¢9,145,160.18. This represented a notable increase in market activity, with both volume traded and value traded advancing by 19.08% and 8.61%, respectively, compared to the previous week.
Notwithstanding the current economic difficulties facing the country, the country’s equities market demonstrated resilience, attracting domestic and international investors alike. The last week’s gains underscored the potential opportunities and growth prospects present in the local bourse. It will also signal to the government that its action are being watched by investors who are always making informed decisions.
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