T-bills auction: Investors’ confidence rebounds marginally; yields to continue to compress

Investor confidence in the treasury market has improved slightly. This comes after a small oversubscription of treasury bills.

Yields have also decreased marginally. This follows three weeks where the government missed its targets.

The government raised GH¢6.67 billion from the T-bills auction. However, it accepted GH¢6.74 billion in bids.

Databank Research noted that the higher acceptance rate shows better alignment between investor demand and yield expectations.

This change may indicate growing market confidence in current rates.

They mentioned that with weekly maturities averaging GH¢6.0 billion, continued issuance could meet funding needs without raising yields. They expect modest yield compression in the coming weeks.

Last week, the Treasury's acceptance rate improved significantly. It accepted 98% of bids, totaling GH¢6.74 billion out of GH¢6.87 billion tendered.

The amount raised surpassed the target of GH¢6.68 billion and covered upcoming maturities of GH¢6.43 billion.

Yields on 91-day, 182-day, and 364-day bills fell by 20 basis points, 29 basis points, and 18 basis points respectively. They settled at 15.45%, 16.21%, and 18.65%.