Demand for the 10 years Treasury bonds
maturities auctioned remained higher with the total amount tendered
oversubscribed by 32.53 per cent, an indication that the market was
awash with liquidity.
However,
the government ended up taking 71.37bn/- as successful amount, a sign
that some bidders tendered below price offered.
A total of 41 bids were received in the
market and 37 emerged successful. Further decline of yield rates across
all government securities did not prevent the 10-year bond to be overly
subscribed.
The session witnessed a drop of interest rates to 14.27 per
cent compared to 15.81 per cent of the previous market.
The market also saw the average coupon
yield falling to 13.44 per cent compared to 14.59 per cent offered in
the preceding session 10-year bond maturities. The government use debt
instruments to mobilise money from the public for both short and long
term investment purposes.
The instruments particularly treasury
bills are used to regulate the amount of money in circulation.
The
gradual decline of the annual headline inflation which in the month of
February, according to the National Bureau of Statistics (NBS), reached
10.4 per cent, is one of the factors behind positive performance of the
government securities, in particular the 10-year treasury bonds.
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.
Source: The Daily News, www.dailynews.co.tz, reported by Sebastian Mrindoko in Dar es Salaam
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