Two-year bond oversubscribed heavily

The two-year Treasury bond issue was well received with market on Wednesday tendering 75.75bn/- against 30bn/- offered and accepted.

The curve declined by 412 basic points (bps) from previous 17.8538 per cent to 13.7270 per cent.

Money markets experts anticipated a huge turnover to attract hefty investments far above the amount that the Bank of Tanzania (BoT) plans to raise, despite further dipping of the rate of returns.

The previous two-year bond conducted in January, during the recovery period from major shakeup of government securities that saw them undersubscribed, managed to fetch interest rate of 17.85 per cent.

The central bank said recently that, “the oversubscription is a sign that investors are awash with cash thus competing on investment opportunities.”

Pension Funds and insurance firms which are among the key players in the long term instruments are expected to make a significant showcase in a bond with considerable market turnout.

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