Government has failed to meet its initial target for the bond sale aimed at raising funds to finance the energy sector debt that has taken a toll on some state-owned enterprises as well as banking institutions in the country.
A target of Ghc6 billion was set by the government for the initial auction last week, it was only able to raise Ghc3.4 billion – about 57% of the goal by close of business on Friday, October 27, 2017.
The below expectation performance of the initial sales resulted in the management of the energy bond extending the auction by an additional one week – with a new closing date set for Friday, November 3rd, 2017.
However, the energy bond managers also recount their gains with the initial auction – particularly, the fact that over 70% of the Ghc3.4 billion raised during the sales last week were from the 7-year bond issued, as compared to less than Ghc1 billion (Ghc902 million) roped in from the 10-year bond issue (over 90% less than the Ghc3.6 billion target that was set by the government for the 10-year bond).
This preference for the 7-year bond against the 10-year option among others indicates a strong investor confidence in the nation’s economic prospects, which with the effective implementation of developmental measures is bound to create needed positive effects across various sectors of the economy and consequently, facilitate an early recovery and return on their invested capital. Â
Hence, market analyst remain optimistic that the government will meet its target Ghc6 billion for this first auction by the end of the exercise.
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