Demand for Treasury Bills is expected to improve at this week’s auction as investors receive assurance of no haircuts on government securities.   

President Akufo-Addo reiterated a commitment to protect investor funds, clearing the rumours about the potential haircuts on sovereign debts due to the International Monetary Fund negotiations.

This is likely to see more bids in the next T-bill auction, the Weekly Market Update by Databank Research.

The government raised ¢701.42 million against a target of GH¢1.12 billion as investor demand for T-bills declined significantly last week.

The auction marked the third successive week the government failed to achieve its target and refinancing obligation, resulting in a bid-o-cover ratio of 0.62x.

The weighted average rates for the 91-day, 182-day and 364-day tenors cleared at 32.70% week-on-week, 34.26% week-on-week and 33.36% week-on-week respectively.

Trading activity picked up last week on secondary market

On the secondary market, trading activity picked up last week but was heavily dominated by selling pressures.

Aggregate market turnover increased by 30.44% week-on-week to GH¢4.71 billion, with 2026-2029 maturities accounting for 46% of executed trades.

The June 2028 and March 2024 papers were the most traded papers with total volumes of ¢540 million and ¢519 million, respectively. The selling pressures further elevated yields by an average of 30 basis points across the yield curve.

Government to raise ¢1.32bn in this week’s T-bill auction

Meanwhile, the government will seek to raise GH¢1.32 billion in this week’s T-bill auction to refinance the upcoming maturities of GH¢1.062 billion.