The Ghana Stock Exchange has had a terrible year. The GSE composite index is down 20.75% this year. Financial stocks are down more than 27%.

High yields on government debt have been a factor in the GSE’s performance as investors run to treasury bills and ignore stocks. There has been several calls on government to cut borrowing in the domestic market to create some space for businesses.

It appears that relief for private borrowers may be coming as the yields on government’s domestic instruments fall. From 22.5%, the interest on the 91-day treasury bill has fallen to 18.6%.

In addition the government recently issued a GH¢438 million 10-year domestic bond at 19%. That is something that should create an opportunity for companies seeking to issue long-term corporate bonds at a slightly higher yield.

It’s not too good a year for equities but I hope the falling costs of government domestic borrowing could give them a brief respite.