Investor demand for T-bills exceeds target by GH¢12.39bn

Investors’ demand for short-term papers in the primary market continues to exceed targets, recording an oversubscription of GH¢12.39billion on the back of limited investment options and attractive yields on the Treasury bills.

Bills tendered by investors totalled GH¢47.3billion, approximately an average of 33 percent higher than the target of GH¢34.91billion – leading to the rejection of marginal bids and sale of GH¢44.19billion across the 91-day, 182-day and 364-day tenors.

The continuous excess uptake is expected to help the Treasury build buffers, with about GH¢30.55billion being used to refinance matured debt during the period – indicating a maturity cover of 1.55x. Fresh issuances totalling GH¢12.28billion were made.

From Q4 of 2022, government turned to the Treasury market to finance its budget deficit after being priced out of the bond market, as Treasury bills were exempted from the domestic debt exchange programme.


Albeit at a slower pace, yields on Treasury bills continued their uptrend at the last auction, with the 91-day bill increasing by 9 basis points (bps) to 19.95 percent and 182-day bill rising by 13bps to 22.71 percent.

Government’s attempt to reduce borrowing costs through the compression of yields on short-term maturities has not been sustained, and the market appears to be signalling a preference for higher yields.

The coupon rate on the 91-day, 182-day and 364-day T-bills decreased significantly at the end of Q1, as government attempted to reduce its borrowing costs. However, despite efforts to drive down interest rates, the decline in yields across the short-term market has halted amid tightening liquidity efforts by the Bank of Ghana – which include an increase in the policy rate by 150 bps to 29.5 percent and an increase in the cash reserve requirement to 14 percent.

Secondary market

In the secondary market, trading activity slumped by 68.05 percent to GH¢117.11million; with new bonds accounting for 56 percent of the total volume and old bonds accounting for 44 percent. The most actively traded new paper was August-2028 (coupon of 10 percent), settling at 11.44 percent, while February-2037 (coupon of 9.85 percent) was actively traded and cleared at 10.81 percent.

Investors’ trading preference for old bonds skewed toward the short- to medium-term papers, with November-2026 (coupon of 19 percent) accumulating 83.46 percent of the total traded volumes and priced at 35.07 percent.

Looking ahead, a further upward re-pricing in money market yields is anticipated to sustain current levels of demand in the primary market, with the next auction scheduled for Friday, May 5th 2023, with an issuance target of GH¢1.83billion across the 91-to-364-day bills to refinance GH¢1.75billion of maturing face value due next week.

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