The Ghanaian secondary bond market experienced a modest slowdown in activity, registering a 2.67% decline in weekly trading volumes.
From the previous week’s GH¢1.26 billion, total market activity dropped to GH¢1.23 billion. While the dip reflects a momentary easing in transactions, analysts remain optimistic about future prospects, especially in light of improved credit ratings and investor sentiment.
Despite the marginal decline, trading remained heavily concentrated in the General Category bonds. Investors showed continued interest in medium- and long-term instruments, with notable performance in the February 2027 bonds. These bonds firmed into the low-80 price range, yielding an average return of 20%, signaling stable investor appetite and sustained demand within this category.
The consistent focus on General Category bonds suggests a level of predictability and reduced risk perception among investors. Market players, especially institutional investors, tend to anchor their positions on such bonds due to their relatively stable returns and lower volatility.
Breakdown by Maturity Buckets: Long-Term Bonds Dominate
Market data revealed that the 2027–2030 maturity bucket accounted for 39% of total volumes. These bonds cleared at an average yield of 20%, reinforcing their appeal to investors looking for mid-term exposure with relatively favorable returns. However, it was the longer-dated maturities—bonds maturing between 2031 and 2038—that dominated trading activity, capturing a significant 61% share of the total volume.
These long-dated instruments cleared at an average yield of 21%, slightly higher than their shorter-term counterparts. This suggests that investors are seeking higher returns and are willing to take on longer duration risk, possibly encouraged by recent macroeconomic policy improvements and stabilizing debt dynamics.
Investor confidence in the bond market appears to be receiving a boost from recent international credit rating developments. Notably, S&P Global Ratings recently upgraded Ghana’s Long-Term Foreign Currency Debt Rating from ‘Selective Default’ (SD) to ‘CCC+’. This upgrade signals improved confidence in the country’s debt servicing capabilities and may help drive renewed activity in the secondary market.
Market analysts believe the improved rating could serve as a catalyst for stronger secondary market performance in the coming weeks. A higher credit rating often encourages broader investor participation, including from foreign institutions that previously held back due to perceived credit risks.
Investor Outlook
While the current week reflects a slight dip in overall activity, the market outlook remains cautiously optimistic. The decline is not considered alarming by market watchers, particularly because key fundamentals—such as bond yields and maturity demand—remain steady. The fact that yields on the 2027–2038 bonds have held firm around 20%–21% reflects resilience in investor expectations.
Additionally, Ghana’s ongoing engagement with international creditors and development partners could contribute positively to overall macroeconomic stability. Should fiscal consolidation efforts and debt restructuring plans continue on track, the secondary bond market may benefit from improved liquidity and deeper participation.
To maintain momentum and enhance secondary market depth, policy measures that promote transparency, liquidity, and investor participation remain essential. The Bank of Ghana and Ministry of Finance have key roles to play in ensuring that regulatory clarity and macroeconomic policy continue to support a robust investment environment.
Furthermore, continuous improvement in Ghana’s sovereign creditworthiness, backed by structural reforms and sound debt management, will be critical to attracting both domestic and international investors. Efforts aimed at diversifying the investor base and promoting retail investor participation could also help reduce concentration risk and deepen the market.
Although the secondary bond market recorded a minor week-on-week decline to GH¢1.23 billion, the overall structure and sentiment remain promising. With firm yields, dominant trading in longer maturities, and a favorable ratings upgrade, the stage is set for a potential rebound. As Ghana continues to stabilize its fiscal and debt management environment, the secondary bond market could serve as a key barometer for investor confidence and economic resilience.
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