GCB Capital Research predicts potential oversubscription of GH¢2.11bn T-Bill auction

The upcoming Treasury bill (T-bill) auction, scheduled for Friday, October 6, 2023, is targeting a gross issuance of GH¢2.11 billion. This issuance represents a decrease of 17.94 percent week-on-week, covering various tenors ranging from the 91-day to 364-day bills. The primary objective of this issuance is to roll over approximately GH¢1.97 billion in upcoming maturities.

Analysts at GCB Capital Research suggest that due to the relatively smaller size of the auction, it may be significantly oversubscribed. This oversubscription could result from strong demand from investors seeking to secure T-bills, which are considered a relatively safe investment option.

Furthermore, in light of the expected oversubscription, GCB Capital Research anticipates that the benchmark 91-day T-bill yield could potentially breach the 29 percent mark at this auction. This yield level would reflect the prevailing market conditions and the competitive demand for short-term government securities.

Investors and market participants will closely monitor the outcome of the auction to assess the impact on yields and gauge investor sentiment. The yield on T-bills can influence investment decisions and also serve as an indicator of market sentiment and inflation expectations.

As the auction date approaches, market dynamics, investor appetite, and economic factors will play a pivotal role in shaping the outcome. Additionally, the success of the auction will provide insights into the level of investor confidence in the Ghanaian financial market.

Source: Norvanreports