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Efforts at having a well-structured money market on course – Gov’t

Government’s efforts at having a well-structured and a well-functioning money market are still on course, the Ministry of Finance, has said.

In this regard and to build on the Joint Book Runner (JBR) system, Government has streamlined its engagements with investors as a way of further developing the primary and secondary markets, the Ministry added.

To this end, it said, government has appointed Bond Market Specialists (BMS) from within the Primary Dealers and licensed investment dealers to conduct Government’s bond market operations.

The Guidelines for the Government Securities Market Primary Dealers and Bond Market Specialists issued by the Ministry said “ In 2015, Government announced changes to the issue and trading of GOG securities, limiting the number of institutions that could act as Primary dealers.

“The changes were aimed at strengthening the primary dealership system, facilitating the development of the fixed income market and at the same time, creating a stable environment in which  Guidelines for the Government Securities market , Primary Dealers and Bond Market Specialists March, 2020 private sector investors could readily meet their investment needs. PDs were also obliged to act as market makers in GOG securities, including quoting two-way prices on designated securities and also help ensure a transparent price discovery at any point in time. The weekly wholesale auctions of Treasury bills and 1- and 2- year Notes were complemented with auctions of longer-dated securities via book building method involving a selected group of financial institutions, known as Joint Book Runners (JBRs).

In 2019, Government introduced the 364-day bill to replace the 1-year note. Also, a 20- year shelf security was added to meet the needs of investors for long term assets while providing a cost-effective and stable source of financing for Government.

“For 2020 and beyond, Government’s efforts at having a well-structured and a well-functioning money market are still on course. In this regard and to build on the JBR system, Government has streamlined its engagements with investors as a way of further developing the primary and secondary markets.

“To this end, Government has appointed Bond Market Specialists (BMS) from within the Primary Dealers and licensed investment dealers to conduct Government’s bond market operations. This reform is expected to help improve the efficiency and transparency of the Ghana Fixed Income Market (GFIM).

“The erstwhile PDs in good standing will continue to be the exclusive counterparts of Government in the auction of ONLY Treasury bills while the BMS shall conduct the issuance of securities with tenor of 2-years and above. All dealers (PDs and BMS) will be required to comply with primary market requirements and responsibilities, conducts and obligations and notices as may be determined by Government.”

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