THE Bank of Tanzania (BoT)
HIGH demand from investors greeted the third 10-year treasury bonds attracting bids almost three times the amount offered to the market for bidding, thus ending up the show overly subscribed.
The first 10-year treasury bonds
auctioned on February, this year, attracted few bids, ending up
undersubscribed. But high appetite was experienced in the second 10
years bonds auctioned on April resulting to oversubscription.
Funds raised from the sale of the
long-term debt government securities are targeted to finance development
projects like road and railway infrastructures that are necessary
cutting down cost of transport.
Some of the key investors in government
securities include pension funds, insurance firms, some microfinance
companies and few commercial banks. The second 10-year Treasury bond was
auctioned last week and is expected to mature on the 23rd June 2026.
It attracted bids 90.88bn/- compared to
34.80bn/-offered for bidding. The Bank of Tanzania (BoT) auction summary
shows, however, that the government retained only 34.80bn/- the same as
the amount sought to be raised.
The weighted average yield to maturity decreased to 17.95 per cent compared to 18.84 per cent session held in April, this year.
The weighted average coupon yield also
made slight increase to 16.29 per cent compared to 17.03 per cent of the
previous session. The weighted average price for successful bids
increased to 70.20 compared to 67.14.
A total of 47 bids that were received
out of 77 emerged successful. The highest bid offered at the auction was
73.69 while the lowest is 60.00; the minimum successful bid/100 was
68.34.
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