Investor appetite for Ghana’s Treasury bills weakened at the latest auction, with total bids falling below the government’s target as yields continued their downward trend across the longer tenors.
Data from the Bank of Ghana showed that investors submitted GH¢3.96 billion in bids for the 91-day, 182-day and 364-day Treasury bills, against a target of GH¢4.12 billion.
The shortfall of GH¢164.94 million represented an undersubscription of about four per cent, signalling a moderation in demand after months of strong investor participation in the primary market.
The government subsequently accepted GH¢2.21 billion of the bids submitted, representing about 55.9 per cent of total investor tenders.
The 91-day Treasury bill remained the most sought-after instrument, attracting GH¢2.29 billion in bids, of which GH¢1.88 billion was accepted.
The 182-day bill received GH¢452.79 million in bids, with the government accepting GH¢224.96 million.
For the 364-day bill, investors tendered GH¢1.21 billion, while only GH¢110.52 million was accepted.
The 91-day instrument therefore accounted for nearly 58 per cent of total bids submitted at the auction.
Meanwhile, yields continued to decline, particularly on the longer-dated instruments.
The yield on the 91-day bill remained unchanged at 4.69 per cent. However, the 182-day yield fell by three basis points to 6.48 per cent from 6.51 per cent the previous week.
The 364-day yield recorded a sharper decline, dropping by 12 basis points from 10.10 per cent to 9.98 per cent.
Market analysts attributed the weaker demand partly to reduced participation by banks, which are said to be shifting some of their investments towards Bank of Ghana bills.
According to the analysts, Bank of Ghana bills offer a more competitive effective rate of return and greater flexibility compared with the yields currently available on Treasury bills.
The latest auction therefore points to a changing investment preference in the short-term securities market, as falling Treasury bill yields coincide with reduced demand at the primary market.
For the next auction, the government is targeting GH¢2.75 billion through the issuance of Treasury bills.
