The secondary bond market for Government of Ghana bonds witnessed a deceleration in trading activity, a trend attributed in part to the truncated trading week resulting from the festive season celebrations. This subdued trading environment saw investors navigating cautiously, with trading volumes contracting notably.
Specifically, market data revealed that investors transacted bonds valued at GHS 1.21 billion, marking a significant decline of 43.6% in trading volumes compared to prior periods. This reduction underscores the impact of external factors, such as seasonal festivities, on market liquidity and investor participation during the month.
Despite the overall slowdown, the distribution of trading activity exhibited some interesting patterns across various bond tenors. Notably, the February 2028 bond, boasting a coupon rate of 8.5%, emerged as the dominant force in the market. This particular bond accounted for a substantial 37% share of the total market turnover, indicating specific investor preferences or strategic positioning in response to prevailing market conditions.
Yields at the shorter end of the curve continued their downward trajectory, experiencing an average decline of 139 basis points to settle at 17.5%. In contrast, the longer end of the curve witnessed an uptick, with yields advancing to 16.2%, marking an increase of 107 basis points. These divergent yield movements reflect evolving market sentiments, possibly influenced by economic indicators, monetary policy outlook, and global financial dynamics.
Looking forward, market analysts anticipate a resurgence in bond market activity, driven by the year-open portfolio adjustments orchestrated by fund managers. This anticipated influx of portfolio realignments and strategic rebalancing efforts by institutional investors could inject renewed vigor into the bond market, fostering increased trading volumes and potentially influencing yield dynamics.