For the second consecutive auction, the treasury recorded strong investor demand for short-term securities, with total bids exceeding the target by GH¢1.17 billion.
According to data published by the Bank of Ghana, a total of GH¢5.80 billion was tendered, representing a 34.8 per cent oversubscription of the GH¢4.30 billion target. Out of the total bids received, GH¢5.48 billion was accepted.
Despite the strong demand, not all bids were accepted, suggesting the government maintained pricing discipline by rejecting relatively expensive bids.
A breakdown of the auction showed that the 91-day bill attracted the bulk of investor interest, with bids totalling GH¢3.83 billion, of which GH¢3.65 billion was accepted. The 182-day bill recorded GH¢709.83 million in bids, with GH¢671.72 million accepted. Meanwhile, the 364-day bill saw GH¢1.26 billion tendered, of which GH¢1.15 billion was accepted.
Analysts believe that, aside from the relatively softer target, the recent bearish turn in the equity market may have pushed some investors towards safer and relatively attractive short-term government securities, further supporting demand at the auction.
Despite the strong demand, yields edged up across all tenors, indicating that the market continued to fairly price inflation risks against the backdrop of the upcoming Monetary Policy Committee meeting.
The yield on the 91-day bill edged up by 3 basis points to 4.91 per cent, while the 182-day bill increased by 1 basis point to 7.04 per cent from the previous week’s 7.03 per cent. The 364-day bill climbed by 25 basis points to 10.38 per cent from 10.13 per cent.
Looking ahead, the treasury plans to raise about GH¢4.49 billion at the next auction, with market participants positioning ahead of the Monetary Policy Committee decision on interest rates.
