Treasury bills yield rate down, demand up

 

Written by DAILY NEWS Reporter

DESPITE falling yield rates, the short term government papers continued to be impressive to investors thus recording oversubscriptions.
According to the Bank of Tanzania (BoT) auction summary, yield rates across all tenors declined significantly but did not discourage investors to scramble for the investment opportunity in the treasury bills.

For the 364 days offer yields declined to 11.9 per cent compared to 13.49 per cent of the previous session but investors appetite remained strong after attracting bids worth 284.31bn/- against 55bn/- offered to the market for bidding.
The 182 days tenor yields declined to 11.45 per cent from 13.43 per cent but the amount tendered overshoot to 291.43bn/- compared to 42bn/- that was put in the market for bidding.
The 91 days offer was also received on a high note after attracting bids worth 19.38bn/- against 2bn/- offered for sale. Interest rates for the 91 days offer slipped to 8.42 per cent from 11.34 per cent of the previous session.
Similarly, the appetite for the 35 days tenor has continued to be high after attracting bids worth 6bn/- compared o 1bn/- sold at 4 per cent yield rate.
The participation of investors particularly from the East African region in the debt securities has increased competitions, the situation that is benefiting the government borrowing at the minimal price.
The participation of more investors in the short term government paper witnessed the superb performances of all tenors to register over subscription.
The BoT auction summary shows further that short term paper became over subscribed to 601.12bn/-, which is over 6 times the 100bn/- offered to the market for bidding.
Also, it is an extraordinary performance when compared to 496.95bn/-, total amount tendered in the last session. Similarly, the outstanding performance of the debt securities is attributed to the improved liquidity in the circulation that finds insufficient investment opportunities in the money markets.
The short term borrowing saw 309 number of bids being received but only 24 succeeding with a total of 159.37bn/- bn/- sought to be raised being retained as the successful bids out of 601.12bn/-.