Bond Market Continues Bullish Run In The Month Of June

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The Ghana Fixed Income Market (GFIM) proceeded with its bull run in June 2021 as exchanging movement shows steady development month on month, information from the Ghana Stock Exchange has shown.

The information, which summed up market exercises in June 2021, shows that volumes exchanged on GFIM expanded by 10.63 per cent to 18.2 billion, esteemed at GH¢19.29 billion from exchange volumes of 16.45 billion, esteem at GH¢17.18 billion, made in May 2021.

Aggregately, from January to June 2021, volumes exchanged available were about 107.61 billion, esteemed at GH¢111.79 billion. Exchanges during the month were about 120.93 percent higher than a similar period in 2020.

Given the latest thing on the optional market, exchanging 2021 will far surpass the levels saw in 2020 because of the size of issuances that have been done as such far, notwithstanding the size of capital that has overflowed the market this year.

Albeit the market has demonstrated solid liquidity, a market investigator with FINCAP Securities, John Nani noticed that the market encountered a pullback of liquidity, as financial backers expect the issuance of protections in the mid-scope of the bend.

“With the public authority planned to give GH¢1.8 billion worth of 2-year tenured securities and GH¢1.8 billion worth of 10-year tenured securities, it appears market players are clutching liquidity with the expectation of procuring these papers when they are given,” Mr Nani said in a meeting with B&FT.

He likewise noticed that given the current circumstance where the national bank is remaining off the open market activity, the market is acutely expecting an expansion in the rates.

Government protections looked more appealing and keep on overwhelming the market as its portions of the exceptional protections expanded to 82.71 percent in June 2021 from 78.63 percent in a similar period last year, while the corporate offer dunked from 21.37 percent in June 2020 to 17.28 percent in June 2021.

The economy seems to have persevered through the effect of the COVID 19 nearly well up until now however there were some related difficulties, for example, the more slow development in credit to the private area, because of the uplifted hazard avoidance of financial backers.

Boldness Kingsley Martey, a senior examiner with Databank in a meeting with B&FT clarified that the swarming out impact is both the consequence of a lot getting by the public authority and the reluctance of business banks to loan to the private area.

“The way things are, it shows up possible that regardless of whether government hinders its acquiring or even lower the yields on Treasury protections – as we have seen available – business banks are more averse to forcefully push up their credit book. The banks are as of now mindful and worried about the raised credit hazard. Thus, would keep on sending cash-flow to decrease the danger openness,” Mr. Martey said.

“This implies that banks eagerness to loan is likewise worth considering in the contention around swarming out impact of government getting,” he added.

Market examiners likewise foresee that yields will stay under 20% across the bend this year as the public authority keeps on dealing with its expense of acquiring.