Treasury bills register over-subscription

DAILY NEWS Reporter

DEMAND for Treasury Bills has continued to be impressive registering over-subscriptions after weeks of poor performance largely due to liquidity squeeze in the circulation.

The short-term government paper auctioned by the Bank of Tanzania (BoT) on Wednesday shows that total bids of 213.07/- were tendered compared to 138bn/- offered to the market for bidding.

Yield rates declined across all tenures but did not affect the performance of the short-term government note to attract more bids, a situation implying the easing liquidity squeeze in the market.

The two tenures 364 and 182 days contributed about 99 per cent of the total bids while 91 and 35 shared less than one per cent.

The 364 and 182 days offer attracted bids worth 125.72bn/- and 87.07bn/-respectively against 80bn/-and 50bn/- offered to the market for bidding while the 91 days offer attracted 281.49m/-.

Yield rates for the 364 and 182 days offer were 15.84 per cent and 15.42 per cent compared to 15.86 per cent and 15.68 per cent respectively of the previous session held two weeks ago.

The 91 days tenure interest rate was 7.42 per cent compared to 7.46 per cent of the preceding market. The highest and lowest bid/100 for the 364 and 182 days offers were 88.10/ 83.41and 93.04/92.02 respectively while for the 91 and 35 days tenure had 98.17/ 98.17.

The minimum successful price/100 for the 364, 182 and 91 days offer were 86.05, 92.67 and 98.17. The weighed average price for successful bid for the 364 tenure was 86.36, the 182 days offer was 92.86 and 91 days offer was 98.18. Major investors in the one year treasury bills are commercial banks, pension funds, insurance companies and some microfinance institutions.