Ghana’s secondary bond market recorded a slight slowdown in trading activity over the past week, even as investor interest in certain segments of the yield curve remained strong.
Data from the market showed that aggregate turnover declined by 2.58 percent week on week to GH¢2.91 billion, reflecting softer participation compared with the previous trading period.
Despite the dip in overall turnover, market participants continued to show a preference for mid-term government securities, particularly bonds maturing between 2027 and 2030. Analysts say this pattern suggests that investors are still active in the market but are becoming increasingly selective in their trading strategies.
The latest developments highlight a bond market that remains cautious but gradually repositioning itself ahead of expected policy and market adjustments.
Weekly turnover declines slightly
Secondary market activity eased marginally during the review period, with aggregate turnover dropping to GH¢2.91 billion. The 2.58 percent week on week decline indicates a mild cooling in trading volumes, although the market still maintained a relatively healthy level of activity.
Analysts attribute the modest slowdown to a combination of investor caution and limited supply dynamics in the market. Many institutional investors continue to reassess their positions following the Domestic Debt Exchange Programme and the evolving outlook for government bond issuance.
Market watchers note that while turnover dipped slightly, the continued participation of institutional investors such as banks, pension funds and asset managers indicates that confidence in the bond market remains intact.
Mid-term bonds dominate trading
A closer look at trading patterns shows that activity was heavily concentrated within the mid-section of the yield curve. Bonds maturing between 2027 and 2030 accounted for the largest share of market activity during the period.
This segment captured 52.6 percent of total traded volumes, with a weighted average yield of 11.02 percent. The strong participation in these maturities reflects investor preference for instruments that provide a balance between yield and duration risk.
Market analysts say mid-term bonds are currently attractive to investors seeking predictable returns while limiting exposure to long-dated interest rate uncertainties. The consistent demand for these securities has helped maintain liquidity in that part of the market.
Activity remains strong in 2031–2034 maturities
The next most active segment in the market comprised bonds maturing between 2031 and 2034. This group of securities accounted for 42.5 percent of total trading volumes during the week.
The weighted average yield for these maturities stood at 12.74 percent, making them slightly more attractive from a yield perspective compared with the 2027 to 2030 bonds.
Analysts say the relatively high level of activity in this segment reflects a growing willingness among investors to extend duration moderately in search of better returns. However, this interest has not yet translated into stronger demand for the longest tenors in the market.
Long-end participation remains subdued
While mid and upper mid maturities attracted the bulk of investor attention, long-term bonds saw limited participation. Securities maturing between 2035 and 2038 contributed only 4.9 percent of total turnover during the period.
These longer-dated bonds recorded a weighted average yield of 12.71 percent, but the yield premium was not sufficient to draw substantial trading volumes.
Analysts believe investors remain cautious about long-term instruments due to lingering macroeconomic uncertainties and expectations about future interest rate movements. As a result, many market participants are choosing to stay within shorter and mid-term maturities where risk levels are perceived to be more manageable.
Market eyes potential bond issuance resumption
Meanwhile, market analysts believe the outlook for the secondary bond market could improve in the coming weeks. According to Databank Research, the expiration of the three year restriction associated with the Domestic Debt Exchange Programme may pave the way for a return to regular bond issuances.
The firm expects that authorities could soon announce the resumption of bond issuance in the domestic market. Such a development would introduce fresh supply into the market and could significantly influence trading activity.
An increase in primary market issuance typically stimulates secondary market transactions as investors reposition their portfolios in response to new opportunities and pricing benchmarks.
Yields expected to gradually adjust
Market observers also anticipate that renewed bond issuance could trigger a gradual adjustment in yields across the curve. Increased activity in both the primary and secondary markets often leads to more dynamic pricing and improved liquidity conditions.
If new issuances occur in the coming weeks, analysts believe the secondary market could experience a steady pickup in trading volumes as investors rebalance their holdings.
For now, however, the market remains in a wait and see phase, with investors closely monitoring signals from policymakers and economic indicators that could shape future interest rate trends.
Cautious optimism in the bond market
Although the latest data shows a slight decline in turnover, the structure of trading activity suggests that investor engagement remains strong within preferred segments of the market. The concentration of trades in mid-term bonds indicates that investors are still actively managing portfolios while maintaining a cautious stance.
With expectations building around the possible resumption of bond issuances, the secondary market could soon see renewed momentum. Analysts believe that once fresh supply enters the market, trading activity is likely to strengthen and yield movements may become more pronounced.
In the interim, Ghana’s bond market appears to be navigating a transitional phase as it adjusts to evolving policy conditions and investor sentiment.
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