IN BRIEF

• GHANA
  Fixed Income:  Investor demand for Ghanaian Treasury bills increased by 27.2% m/m in November 2024 but remained insufficient to fully cover the high auction target for the month under review. Although the price play currently favours the T-bills against the BOG bills and has successfully stimulated demand for the former, the heightened refinancing obligation in November 2024 sustained the financing gap in the past month. Unsurprisingly, yields remained on the uptrend in November, averaging 90bps across the T-bills with renewed near-term inflation uncertainty and persistent Treasury borrowing pressure as the main drivers. On the bond secondary market, we are in the process of developing and back-testing our in-house local currency Ghana government bond index (the “IC-GBI). We expect to commence reporting on the index in 1Q2025. In the past month, we observed renewed risk-off as investors adopted the wait-and-see approach ahead of Ghana’s December elections.
  
  Currency:
  The Ghanaian Cedi roared back in November 2024, appreciating by 6.6% m/m (-21.75% YTD) against the US Dollar despite the renewed global strengthening of the greenback on “Trump trade” and geopolitics. The Cedi’s rare purple patch was anchored on the Bank of Ghana’s intensified daily FX sales (total: USD 909.3mn), which improved the FX liquidity, mostly cleared the backlog of FX demand, eased market apprehension and tamed the Cedi bears. While the BOG interventions continue ahead of the December elections and sustains the appreciation tailwind, we foresee a moderation in the Central Bank support as the USDGHS inches closer to the 15.0/USD handle.
  
  
• KENYA
  Fixed Income: Investor demand for Kenyan Treasury bills remained relentless in November 2024 while the Treasury capitalized on the strong demand to re-profile its short-term debt in favour of the relatively longer 182-day and 364-day tenors. The downward momentum in yields intensified in November 2024, averaging 250bps decline across the T-bill curve against the backdrop of the robust demand for T-bills. In view of the prevailing strong appetite for T-bills amidst a well-contained inflation risk, we expect continued decline in yields in December 2024.
  
  
  Currency:
  The impressive stability of the Kenyan Shilling continued in November 2024, albeit softening slightly by 0.4% m/m (+20.7% YTD) against the US Dollar. Domestic conditions continue to support KES stability with forex reserves rising to USD 9.0bn (4.6-months of import cover) at end-November 2024. We maintain our optimism on the near-term KES stability with the strong forex buffers providing a reliable cushion against unexpected advance in the US Dollar.

• NIGERIA
  Fixed Income: Similar to the prior month, the Nigerian Treasury executed only one primary market trade for T-bills in November 2024 as inflation concerns and hawkish monetary policy continued to exert upward pressure on yields despite favourable demand conditions. Notwithstanding the generally strong demand, yields went up across the T-bill curve for the first time in 4-months, largely reflecting investor concerns about elevated inflation risk. We believe the attractive tenor premium on the 364-day bill will continue to attract investor interest amidst the yield-hunting to minimize the negative real yields.

   

  Currency: The Naira nursed losses against the US Dollar in Nov-2024 (-2.3% m/m) as inflation remained on an uptrend amidst elevated seasonal FX demand. The CBN softened its stance on the use of FX deposits, permitting banks to trade the uninvested FX deposits of clients, provided that the funds will be made available to clients upon request. We believe the new CBN guideline to banks on the use of FX deposit has the potential to support FX flows to the market through the seasonal spike in demand. We however view the ongoing FX market reforms and tighter policy stance as more credible support for price discovery and Naira stability.