News Column

T-Bills Yields Down, Appetite Up

September 2, 2014

DESPITE shelving weighted average yield across all tenures, the treasury bills auction was oversubscribed by 267bn/- , thanks to the continued improvement of liquidity in the circulation.

According to the Bank of Tanzania (BoT) auction summary, the one-year treasury bills recorded almost three times oversubscription jumping to 402.17bn/- compared to the auction conducted two weeks ago that fetched 143.41bn/-.

The NMB said in its e-market report that liquidity in the market continued to improve as Treasury bills auction was oversubscribed by 267bn/- with weighted average rates declining across all tenures.

The weighted average yield declined to 13.44 per cent compared to 14.52 per cent of the previous session held two weeks ago. Nonetheless, the oversubscription, the bank ended up taking only 134bn/- as successful amount.

A total of 77 bids out of the total 274 succeeded, a clear indication that some investors offered price below the market value. The bank report shows that there was high appetite the 364- day offer was oversubscribed to 206.45bn/- against the 55bn/- offered for tendering at a rate of return of 14.05 per cent compared to 14.72 per cent offered in the previous session.

Similarly, the 182-day tenure managed to attract bids worth 85.43bn/- against the 45bn/- initially sought at interest rates of 13.84 per cent compared to 14.09 per cent of the previous market.

Also, the appetite for the 91-day was high that recorded 108.29bn/- against 32bn/- placed for tendering at 12.17 per cent rate of return compared to 12.59 per cent of the previous market.

Although it attracted low bids, but there was some appetite for the 35-day tenor that attracted bids worth 2bn/- compared to 3bn/- offered to the market for bidding.

Around 60 per cent of the key players of long-term maturities are commercial banks, with only five per cent as retail investors. Others are pension funds, insurance companies and a few micro-finance institutions

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Source: AllAfrica

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