Ghana’s bond market has suffered a sharp setback, with secondary market turnover plunging by 68.28% week-on-week to GH¢2.12 billion, highlighting a shift in investor activity as attention turned towards a fresh government debt issuance.
The steep decline has raised fresh concerns over trading momentum in the secondary market, where investor participation weakened significantly during the review period. While the market remained active across different maturity segments, trading was heavily concentrated around bonds maturing between 2031 and 2034.
The development comes at a time when liquidity conditions have improved, supported by significant payments and unallocated funds from recent government securities transactions. According to Databank Research, these conditions helped redirect investor attention towards the newly issued four-year government bond.
Turnover Suffers 68% Collapse
The most striking development was the sharp decline in secondary market turnover.
Total turnover fell from the previous week by 68.28%, settling at GH¢2.12 billion. The decline signals a major reduction in trading activity and suggests that investors were less active in exchanging existing government securities.
The weakness was particularly notable because government bonds remain an important investment avenue for institutional investors and other market participants seeking relatively stable returns.
However, the latest figures indicate that investor appetite temporarily shifted away from previously issued securities as a new investment opportunity emerged in the primary market.
The movement has created a notable contrast between the secondary and primary markets, with activity weakening significantly in one while demand remained strong in the other.
Investors Crowd Into 2031-2034 Bonds
Despite the overall decline in turnover, trading was concentrated within the belly of the yield curve.
Bonds maturing between 2031 and 2034 accounted for a commanding 74.22% of total turnover. These securities traded at a weighted average yield of 14.39%, making the segment the clear centre of activity in the secondary market.
The concentration shows that although overall trading volumes declined, investors who remained active continued to show strong interest in medium to longer-dated government securities.
The 2027 to 2030 maturity segment followed at a considerable distance, contributing 18.72% of total turnover. The securities in this category recorded an average yield of 13.47%.
Meanwhile, bonds maturing beyond 2035 accounted for just 7.06% of turnover, despite recording the highest average yield among the three segments at 14.72%.
The figures suggest that investors continued to focus primarily on securities within the middle portion of the maturity curve rather than the longest-dated instruments.
New Four-Year Bond Attracts GH¢4.46bn
While secondary market activity collapsed, the primary market delivered a much stronger performance.
The government’s new four-year bond, which is scheduled to mature in September 2030, attracted GH¢4.46 billion in investor bids.
Out of the total amount submitted by investors, GH¢3.15 billion was accepted at a clearing yield of 12.00%.
The strong demand for the new security underscores the level of investor interest in fresh government debt despite the sharp decline recorded in secondary market trading.
The sizable volume of bids also points to substantial liquidity available among investors looking for opportunities in government securities.
With GH¢4.46 billion in bids received against GH¢3.15 billion accepted, the issue generated considerable investor interest and helped reshape trading patterns across the bond market.
COCOBOD Payment Boosts Liquidity
Databank Research believes the timing of the new bond issue played an important role in attracting investors.
The research firm said the bond was strategically timed to benefit from improved liquidity following a GH¢2.3 billion COCOBOD Domestic Debt Exchange Programme payment.
An additional GH¢5.82 billion in unallocated bids from the August 31 Treasury bill auction also contributed to the improved liquidity conditions.
These developments provided investors with additional funds that could be redirected into other government securities.
As a result, investors appear to have shifted some of their attention towards the newly issued four-year bond, reducing activity in the secondary market.
The situation demonstrates how liquidity movements can quickly influence investor behaviour across Ghana’s fixed income market.
Secondary Market Could Recover
Despite the sharp decline, the latest performance may not necessarily signal a prolonged weakness in Ghana’s bond market.
Databank Research expects market activity to recover modestly following the settlement of the new bond.
This outlook suggests that some of the decline in secondary market turnover could be temporary, reflecting the movement of investor funds into the primary market rather than a complete withdrawal from government securities.
Once the settlement process is completed, investors may return to the secondary market, potentially supporting a gradual recovery in trading volumes.
However, the extent of the recovery will depend on liquidity conditions, investor appetite and developments in subsequent government securities auctions.
Investor Attention Remains Critical
The latest bond market figures highlight the growing importance of investor behaviour in determining trading activity.
The 68.28% decline in turnover is significant, but the strong demand for the new four-year bond shows that investor interest in Ghanaian government securities has not disappeared.
Instead, capital appears to have moved towards a new opportunity offering investors exposure to a September 2030 maturity at a clearing yield of 12.00%.
The strong subscription provides an encouraging indication of market demand. For investors, however, the concentration of activity and changing liquidity conditions will remain important factors to monitor.
Ghana’s bond market is therefore entering another closely watched phase. While secondary market turnover has taken a major hit, the strong primary market performance could provide the foundation for renewed activity once the latest bond settlement is completed.
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