GH¢2.11bn T-Bill auction likely to be oversubscribed, GCB Capital Research predicts

GCB Capital Research analysts have indicated that the October 6, 2023, Treasury bills (T-bills) auction could witness significant oversubscription due to its relatively smaller size.

The T-bill auction is targeted to issue GH¢2.11 billion. This marks a 17.94 percent decline compared to the previous week’s issuance.

The T-bills will encompass various tenors, ranging from 91-day to 364-day bills, with the primary aim of rolling over about GH¢1.97 billion in upcoming maturities.

The strong demand for T-bills, considered a secure investment, is expected to drive this oversubscription.

Moreover, in light of the anticipated oversubscription, GCB Capital Research foresees that the benchmark 91-day T-bill yield may surpass the 29 percent threshold during this auction.

This yield level would reflect both the prevailing market conditions and the robust demand for short-term government securities.

Market participants and investors will closely monitor the auction’s outcome to assess its impact on yields and to gauge investor sentiment.

T-bill yields play a pivotal role in influencing investment decisions and serve as an indicator of market sentiment and inflation expectations.

As the auction date nears, various market dynamics, investor preferences, and economic factors will come into play, shaping the final outcome.

The auction’s success will also serve as a barometer of investor confidence in the Ghanaian financial market.