DEMAND for 10 years Treasury bond has remained low thus failing to meet the quest to raise 111bn/- due to insufficient liquidity among investors.
Similarly, the 10 years debt instrument
auctioned in August was less impressive failing to raise bids needed to
fund various development projects. Some of the key investors in
government securities include pension funds, insurance firms, some
microfinance companies and few commercial banks.
Most of the banks currently have
insufficient liquidity particularly after the government move to shift
public institutions accounts to the Bank of Tanzania (BoT). According to
the summary from BoT of the auction held on Wednesday, only 109.55bn/-
were raised out of 111bn/- sought.
And at the end 89.15bn/- became
successful amount. The weighted average yield to maturity is 18.33 per
cent higher than 17.63 per cent of the government note auctioned in
August this year. Weighted average coupon yield was 16.60 per cent
compared to 16.03 per cent of the previous session.
The weighted average price for
successful bids was 68.90 compared to 71.35 of the preceding auction.
Minimum Successful Price/100 was 68.00 the same as in the other session
held in August.
The highest bid/100 was 71.35 while
lowest bid/100 was 63.55. Out of 76 bids received 55 became successful.
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.
With the exception of the second and
third 10-year treasury bonds auctioned in April and June this year which
ended oversubscribed, the first, fourth and fifth auctions became less
impressive
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