Hiked yields in the seven-year bond
auctioned on Wednesday this week failed to entice investors in the long
term papers ending up undersubscribed by 43 per cent.
The auction summary posted by the Bank
of Tanzania (BoT) show that weighted average to maturity increased to
15.6 per cent in the 7-year bond compared to 15.3 per cent offered in
the previous session.
The Bank’s predictions have already
shown that, yields in the 7-year bond were expected to increase
significantly due to low liquidity but did not push up investors’
appetite. The auction was undersubscribed by 16.6bn/- whereas the BoT
took 12.9bn/- out of the submitted 38.4bn/-.
Over 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. Tight liquidity is one of the BoT
monetary policy instruments used to tame inflation.
The government said during the 2012/13
fiscal year that it intends to continue with its arrangement to borrow
from domestic market for financing development projects and paying for
rollover of maturing treasury bills and bonds.
Source: The Daily News, dailynews.co.tz, reported from Dar es Salaam
0 comments :
Post a Comment