APPETITE for the ten-year treasury bonds auctioned last week was high after attracting bids worth 219.98bn/- an indication of improved liquidity among investors in debt securities.
The auction results issued by the Bank
of Tanzania (BoT) show that the amount tendered in this session has
increased compared to the bids attracted in the previous session held in
August.
A total of 114 bids applied for the
tender and only 46 emerged successful while in the session held in
August, a total of 101 bids were received and only 77 emerged
successful.
At the end and despite the
oversubscription, the government retained only 65.3bn/- as successful
amount, an indication that some bidding price was too high and it could
be expensive for the government to pay at the maturity of the debt
instrument.
The weighted average yield to maturity
increased to 15.8 per cent compared to 15.7 per cent of the previous
session held in August. The weighted average coupon yield was 14.6 per
cent compared to 14.5 per cent of the auction held in August.
Weighted average price for successful
bids was 78.02 compared to 78.62 of the session held in August while
minimum successful price/100 was 76.12 compared to 72.94. The highest
and lowest bids/100 were 81.85 and 47.26 respectively.
Yields may stabilise as more funds are
chasing government papers as well as continued decline in inflation.
Treasury bonds are among the instrument used by the government to borrow
from the public for various development projects.
Some of the investors of long term maturities are commercial banks, with only five per cent as retail investors.
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