Bond market sees steep 83.21% decline in weekly volume

In a notable downturn, the secondary bond market for Government of Ghana papers experienced a staggering 83.21% decline in volume week-on-week. Recording a meager GH¢174.41 million in transactions, this marks the market’s lowest turnover in 20 weeks.

The distribution of bond exchanges revealed an intriguing pattern, with trades evenly spread across the front and tail ends of the LCY yield curve. Interestingly, no activity was observed at the belly of the curve, signaling a nuanced market sentiment.

During the period under review, the government dutifully settled coupon obligations on new bonds, disbursing a substantial sum totaling approximately GH¢5.1 billion to investors. This financial move is poised to influence market dynamics and investor sentiment in the coming weeks.

Analysts maintain cautious optimism, foreseeing a potential uptick in exchange volumes following the payment of coupons on the new bonds. However, the outlook remains contingent on broader market conditions and investor behavior.

Looking ahead, the government eyes potential issuance of 2-year to 7-year notes in March 2024, subject to prevailing market dynamics. Such prospective actions underscore the government’s strategic approach to managing its debt obligations and capital requirements amidst evolving economic landscapes.

Norvan Reports