TIGHTER liquidity felt in the circulation affected the seven year bond auctioned last week ending up undersubscribed.
In the local markets, according to NMB
Bank e-market report, tighter liquidity is felt, with short interest
rates rising steadily above 10 per cent mark. Some of the key investors
in the debt securities are pension funds, insurance firms, commercial
banks and few microfinance institutions.
Proceeds from the bond are used to
finance long term infrastructure projects as well as settle some
maturing debts. According to the Bank of Tanzania (BoT) auction summary,
the long term fixed instrument fetched 73.33bn/- compared to 101bn/-
offered to the market for tendering.
At the end a total of 57.35bn/- was
retained as successful amount. Weighted average yield to maturity jumped
to 16.23 per cent, a slight decline compared to 17.57 per cent compared
of the seven years bond issued early in November last year.
Similarly, weighted average coupon yield
increased to 13.48 per cent, a slight fall from 14.30 per cent compared
of the preceding session. The minimum successful price/100 was 66.11,
down from 69.47 of the preceding seven years debt instrument issued two
months ago.
Similarly, the weighted average price
for successful bids was 74.77, up from 70.45 of the previous session.
Also the highest bid/100 for the long term government paper was 87.14 up
from 76.50 of the session that expired in November last year.
The lowest bid/100 was 51.79. A total of 61 bids were received and 25 emerge successful
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