Investor demand for Treasury bills in the primary market remained high for the third week in a row; the most recent auction brought in GH¢12.70 billion in bids, much surpassing the government’s fundraising goal.
Investors bid GH¢12.70 billion over the 91-day, 182-day, and 364-day Treasury bill tenors, compared to a target of GH¢7.36 billion, according to data supplied by the Bank of Ghana.
The 72.5% oversubscription at the auction demonstrated the ongoing demand for short-term government securities.
As it continues to take advantage of high investor demand, the Treasury accepted GH¢9.98 billion of the bids received, increasing GH¢2.62 billion beyond its target.
With GH¢8.31 billion in bids, the 364-day Treasury bill continued to be the most sought-after item.
GH¢6.35 billion, or roughly two-thirds of the entire amount raised, was accepted by the Treasury.
Bids for the benchmark 91-day bill totalled GH¢3.51 billion, of which GH¢3.04 billion was approved. In the meantime, the Treasury accepted GH¢584.98 million from investors who submitted GH¢873.97 million for the 182-day bill.
Across the curve, yields were inconsistent. The yield on the 182-day bill dropped to 7.68% from 7.79% at the previous auction, while the yield on the 91-day bill dipped to 5.78% from 5.86%.
However, due to the ongoing demand for higher returns on longer-dated government assets, the yield on the 364-day bill slightly increased to 13.00% from 12.99%.
The high momentum seen in Tender 2015, which drew offers above GH¢10 billion, is carried over into the most recent auction.
Despite high yields, investor trust in government assets has persisted, as seen by the third straight oversubscribed auction.
In order to address its short-term funding needs, the government intends to raise GH9.49 billion in the upcoming auction.
Source: newsthemegh.com