Negative real returns are dampening investor appetite for treasury bills, Joy Business can confirm based on assertions from multiple analysts.
This comes after investor demand for T-bills weakened last week, with total bids falling by 27% week-on-week to GH¢5.29 billion. The Treasury accepted GH¢4.73 billion—below maturities of GH¢6.09 billion and the GH¢6.32 billion target.
With inflation hovering around 22% and average yields estimated at 16%, the resulting negative spread of approximately 6% is discouraging investors.
Databank Research noted that earlier expectations of a demand rebound following the International Monetary Fund’s (IMF) positive review were dampened by reduced institutional offers, driven largely by negative real returns.
This contrasts with the robust GH¢12.44 billion uptake for the Bank of Ghana’s 56-day bill, which offered a more attractive yield of 28%.
Additionally, the allocation of the 364-day bill only to non-competitive bids at sub-17% suggests that the Treasury is seeking to reduce short-term borrowing costs and support favourable pricing for upcoming bond issuances.
In the short term, analysts anticipate modest yield declines, supported by further disinflation in the April 2024 inflation figures.
Last week, yields fell across the curve: the 91-day, 182-day, and 364-day bills declined by 9 basis points (bps), 26bps, and 142bps week-on-week to 15.23%, 15.77%, and 16.96%, respectively.
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