Investor interest in Treasury bills saw a decline last week, as the government fell short of its issuance goal by 29.85 percent.
Recent figures from the Bank of Ghana indicate that total bids were approximately GH¢2.45 billion below the GH¢7.57 billion target, despite interest rates being relatively competitive.
In total, GH¢5.11 billion was accepted from the 91-day, 182-day, and 364-day instruments out of the GH¢5.3 billion that was submitted.
The 91-day bill continued to be the most appealing, attracting GH¢4.44 billion in bids with nearly full acceptance. The 182-day bill also achieved full uptake, with GH¢521.96 million accepted.
Conversely, demand weakened for the longer-term securities. Of the GH¢348.94 million offered for the 364-day bill, only GH¢162.59 million was accepted, highlighting the government’s prudence in avoiding higher borrowing costs.
Yields increased across all maturities. The 91-day bill rose by 10 basis points to 4.91 percent, the 182-day bill increased by 6 basis points to 6.77 percent, while the 364-day bill climbed 13 basis points to 9.97 percent.
The under-subscription raises concerns regarding the government’s short-term financing strategy. In comparison to the previous auction, where GH¢2.95 billion was raised from GH¢3.17 billion in bids, the latest results indicate a notable increase in borrowing intentions, although not fully realized.
Looking forward, the government has established a lower target of GH¢4.89 billion for the upcoming auction, indicating a recalibration in response to current market conditions.
For investors, this trend suggests ongoing opportunities in short-term instruments with relatively stable yields, while longer-dated securities may provide higher returns, albeit with increased risk.
The auction also underscores the persistent dominance of primary dealers in the wholesale market, with retail investors primarily accessing these instruments through the secondary market, particularly the Ghana Fixed Income Market.
