Ghana’s fixed-income market has suffered a sharp slowdown, with trading turnover plunging by 59.01 per cent to GH¢1.02 billion in the latest session, exposing concerns about market liquidity, investor positioning and the growing concentration of activity in selected Domestic Debt Exchange Programme (DDEP) bonds.

Although the market recorded more than GH¢1 billion in transactions, the headline figure concealed a significant contraction in activity across government securities, Treasury bills and corporate debt. Trading turnover fell from GH¢2.49 billion in the preceding session, while the number of transactions declined from 551 to 306, representing a 44.46 per cent drop.

The figures point to a market where investors are becoming less active in adjusting their positions, even as selected debt instruments continue to attract substantial trading volumes.

The most striking development was the dominance of DDEP bonds, which accounted for GH¢706.33 million, representing 69.29 per cent of total market turnover. Treasury bills contributed GH¢312.61 million, while corporate bonds generated just GH¢440,200.

DDEP Bonds Dominate as Market Activity Weakens

The concentration of trading in DDEP securities highlights the continued importance of government debt instruments to Ghana’s fixed-income market.

However, the dominance of these bonds did not prevent an overall market contraction. DDEP bond turnover fell by 51.37 per cent from GH¢1.45 billion in the previous session, while Treasury-bill transactions declined by 61.34 per cent from GH¢808.60 million.

Corporate-bond turnover also dropped sharply by 70.28 per cent, falling from GH¢1.48 million.

The decline extended beyond conventional bond trading. Sell-and-buy-back transactions collapsed from GH¢217.83 million to just GH¢19,886, while commercial-paper trading recorded no activity.

New government bonds, which had previously attracted GH¢1.77 million in turnover, also recorded no trades during the session. Old government bonds remained inactive.

These developments raise questions about the depth of Ghana’s secondary fixed-income market, particularly when daily turnover depends heavily on a small number of large transactions.

A market can record substantial trading volumes without offering broad liquidity across different maturities and instruments. The latest figures illustrate this challenge, with activity concentrated in a handful of DDEP securities while several market segments experienced near-total inactivity.

GH¢400m Bond Trade Raises Questions About Investor Confidence

The February 2032 DDEP bond, carrying a 9.10 per cent coupon, emerged as the session’s dominant security after recording GH¢400 million across just two transactions.

The bond accounted for 56.63 per cent of total DDEP turnover and 39.24 per cent of the entire fixed-income market’s trading value.

The February 2029 bond followed with GH¢165 million in turnover, while the February 2031 instrument recorded GH¢74.88 million. Together, the three securities represented approximately 90.59 per cent of DDEP trading activity.

While the volumes demonstrate that investors remain willing to transact in selected restructured government securities, the accompanying yield movements suggest that buyers are demanding higher returns.

The February 2032 bond’s yield rose from an opening level of 14.23 per cent to close at 14.91 per cent. Its closing price settled at 79.08, reflecting the inverse relationship between bond prices and yields.

The 68-basis-point increase indicates that the security changed hands at a yield that offered buyers greater compensation for holding the bond.

Other DDEP instruments recorded similar movements, although at a smaller scale. The February 2029 bond closed at 13.98 per cent, compared with an opening yield of 13.91 per cent. The February 2031 security moved from 14.20 per cent to 14.24 per cent, while the February 2030 bond edged higher from 14.22 per cent to 14.23 per cent.

Shorter-dated securities also experienced notable repricing. The August 2027 bond, carrying a 10 per cent coupon, closed at 11 per cent after opening at 10.24 per cent. The February 2028 instrument ended at 12.94 per cent, up from 12.35 per cent.

These movements suggest that substantial trading activity is not necessarily translating into stronger bond prices or declining yields. Instead, investors may be requiring higher returns before committing funds to particular maturities.

Treasury Bills Lose Momentum as Corporate Debt Remains Weak

Treasury bills continued to provide an important source of liquidity, but their contribution weakened considerably during the session.

The most actively traded bill, maturing on August 2, 2027, recorded GH¢101.12 million across eight transactions. This represented 32.35 per cent of Treasury-bill turnover and nearly 10 per cent of total market activity.

The decline in bill trading could reflect changing institutional liquidity requirements, settlement schedules or the availability of securities. One session alone, however, is insufficient to establish whether demand for short-term government instruments is weakening structurally.

Corporate debt presented a more concerning picture.

The only corporate bond traded was COCOBOD’s August 2028 instrument, which recorded GH¢440,200 across two transactions and closed at 100.61. This compared with GH¢1.48 million in corporate-bond turnover in the preceding session.

The absence of commercial-paper trading further highlights the limited range of actively traded private-sector debt instruments.

This dependence on sovereign and sovereign-linked securities restricts opportunities for broader price discovery and leaves pension funds, insurers and other institutional investors with fewer actively traded corporate debt alternatives.

Investors Watch Yields and Liquidity Risks

The immediate outlook for Ghana’s fixed-income market will depend on whether trading activity broadens beyond large transactions in selected DDEP bonds.

Sustained liquidity requires regular participation across different securities and maturities, rather than occasional block trades that dominate daily turnover.

Investors will also monitor whether the upward yield adjustments continue. Higher yields could attract buyers seeking improved returns, but they also imply lower bond prices and potentially greater sensitivity to inflation, fiscal developments and future funding conditions.

The latest session does not establish a lasting deterioration in market liquidity. Nevertheless, the simultaneous decline in turnover, reduction in transaction numbers and concentration of trading in a few securities highlight vulnerabilities that deserve attention.

Ghana’s fixed-income market remains active, but its ability to support efficient price discovery and consistent trading will depend on deeper participation across government and corporate debt instruments.

Until that happens, headline turnover figures may continue to mask the underlying constraints facing investors seeking liquidity and diversification.