The secondary bond market began 2026 on a softer footing as liquidity conditions eased and trading activity slowed markedly.

Market data shows that turnover declined by 42.04 percent week on week to GH¢1.59 billion, reflecting a cautious start to the year for fixed income investors. The slowdown comes after relatively stronger activity toward the close of 2025, suggesting that market participants are reassessing positioning amid evolving macroeconomic and fiscal signals.

Despite the decline in overall turnover, price discovery remained active within selected maturities, indicating that investor interest has not disappeared but rather become more concentrated. Analysts note that the opening weeks of a new year often see measured trading volumes as portfolios are rebalanced and investors wait for clearer policy direction.

Trading concentrates on key benchmark bonds

Activity in the bond market was heavily focused on the February 2027 and February 2030 benchmark securities, which together dominated trading volumes during the period under review. The February 2027 bond recorded a trading volume of GH¢522.74 million, while the February 2030 benchmark followed closely with GH¢539.96 million. These two instruments played a central role in anchoring price discovery across the market.

The concentration of trades around these benchmarks reflects investor preference for mid tenor instruments that offer a balance between yield attractiveness and duration risk. Market participants appear more comfortable taking exposure in this segment, where pricing signals are clearer and liquidity conditions are relatively more reliable compared to the longer end of the curve.

Investor positioning remained strongly tilted toward the 2027 to 2030 maturity bucket, which accounted for 75.2 percent of total traded volumes. Bonds within this range traded at a weighted average yield of 14.96 percent, reinforcing their appeal to investors seeking stable returns without excessive exposure to long term uncertainties.

This preference underscores a broader risk management strategy in the current environment. While confidence has improved compared to earlier periods of heightened volatility, investors are still avoiding aggressive duration extension. The mid tenor segment continues to be viewed as the sweet spot for balancing income generation with capital preservation.

Measured activity in the intermediate segment

Beyond the core 2027 to 2030 range, trading activity was more subdued in the 2031 to 2034 segment. This portion of the curve accounted for 15.7 percent of total market turnover and cleared at a weighted average yield of 15.30 percent. Although yields were slightly higher than those in the mid tenor bucket, investor appetite remained cautious.

Market watchers attribute this measured activity to lingering uncertainty around long term fiscal dynamics and the timing of broader bond market reopening. Investors appear selective, engaging in this segment mainly for portfolio diversification rather than as a primary allocation focus.

The longest dated securities, covering maturities from 2035 to 2038, remained thinly traded. This segment accounted for just 9.1 percent of total volumes and traded at a weighted average yield of 15.35 percent. The relatively modest participation highlights persistent reluctance among investors to take long term exposure despite the higher yields on offer.

Thin liquidity at the long end continues to pose challenges for effective price discovery. With fewer trades occurring, yields in this segment may not fully reflect underlying market fundamentals, reinforcing investor caution and limiting broader participation.

Market outlook supported by improving conditions

Despite the early year liquidity erosion, analysts maintain a cautiously optimistic outlook for the bond market in the weeks ahead. Improved investor confidence following the US$709 million Eurobond coupon settlement has helped to stabilise sentiment, creating conditions for a potential rebound in trading activity.

Databank Research expects liquidity to improve as clarity emerges on bond market reopening and the government’s issuance plans. According to the firm, clearer guidance from the treasury is likely to support broader participation across the yield curve, which in turn would enhance liquidity and strengthen price discovery.

As macroeconomic conditions stabilise and policy signals become more defined, market participants anticipate a gradual pickup in secondary market activity. Investors are expected to re engage more actively once issuance calendars and reopening plans are confirmed, allowing for better alignment of risk and return expectations.

For now, the bond market remains in a consolidation phase, marked by selective trading and cautious positioning. While turnover has declined sharply at the start of 2026, underlying demand for well priced government securities persists, suggesting that liquidity conditions could improve as confidence continues to build.