By Vainess Mollel
The Citizen Reporter
The Citizen Reporter
Dar es Salaam.
The appetite for the Bank of Tanzania’s ten-year Treasury bond last
week was high as investors craved for the risk-free debt instruments,
according to market data.
The central bank
offered the Treasury bond at the total value of Sh55 billion, but the
high enthusiasm displayed by investors pushed the bank to increase the
value tendered to Sh72 billion.
“High
liquidity among investors including pension funds and commercial banks
led to an oversubscription,” the Rasilimali Limited general manager, Mr
Arphaxad Masambu, told The Citizen in Dar es Salaam.
The
BoT summary report for last week’s auction showed that the ten-year
bond was oversubscribed by Sh17 billion at the weighted average yield to
maturity of 14.2758 per cent.
According to Mr
Masambu, the absence of an initial public offering in the market means
that every serious investor is eyeing the risk-free securities in which
to inject their money – the Treasury bond seems to provide the answer,
thus resulting in oversubscription.
He also
said there were no corporate bonds on offer yet, whose yields could
compete with the one of the government bonds, and because of this fact,
there was oversubscription.
Investors were left with only one choice there was of injecting their money.
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