THE last two-year treasury bonds sold in the debt market this year received less investors' participation closing the show undersubscribed.
According to the Bank of Tanzania (BoT)
auction summary on the session held on Wednesday, the debt instrument
attracted bids worth 104.43bn/- compared to 128.5bn/- offered to the
market for tendering.
At the end successful amount was 52.43bn/-.
Analysts attribute the bond's
underperformance to the year end obligations by investors, mostly
commercial banks, pension funds, insurance companies and some
microfinance institutions. During this period of time, investors pay
quarterly taxes and set some amount for year end expenses.
The funds sourced from the debt
instrument are channeled to long term infrastructure projects executed
by the government for improved livelihood. The weighted average yield to
maturity remained at 17.66 per cent as in the session held in October
this year.
Similarly, the weighted average coupon yield remained at 9.31 per cent as in the preceding session in October.
The weighted average price for
successful bids was 83.99 while the minimum successful price/100 was
83.65. The highest bid /100 and lowest bid/100 were 85.70 and 74.11
respectively while the number of bids received in the two-year auction
were 99 and only 34 became successful.
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