Demand for govt securities seen falling

There was low demand for Treasury bills maturities auctioned this week. 

The one-year government note auctioned on Wednesday was less attractive to investors, despite the increase of the weighted average yield to 15.5 per cent from 15.2 per cent of the previous session.

The Bank of Tanzania (BoT) auction results show that 160bn/- was offered to the market for bidding but only 134.6bn/- collected, recording 15.8 per cent undersubscription.

At the end, 107.2bn/- from 147 bids emerged successful out of 162 received. The undersubscription, according to money market analysts, is attributed to the end of year obligations including tax payments, for which most of the investors in the short term government maturities have to fulfil.

“Generally, the money market is expected to maintain moderate levels towards the end of the year as most investors have to meet obligations that include tax, salaries and those related to end of the year feasts,” noted the Tanzania Securities Limited (TSL) in the weekly market commentary.

The total amount tendered for the 364-day offer was 95.7bn/-, the oversubscription against the 65bn/- initially sought at an interest rates of 15.6 per cent, was slightly up from the previous 15.2 per cent. 

The 182-day offer was undersubscribed to 31.3bnbn/- against the 55bn/- offered for tendering at a rate of return of 15.5 per cent up from 15.2 per cent of the preceding session.

Similarly, the 91-day offered was once again less attractive after pulling only 7.5bn/- out of 35bn/- offered to the market for bidding at the rate of return of 13.5 per cent from 13.4 per cent of the last session.

Also, investors shunned away from bidding in the 35-day offer as in the last trading, for which the Bank put forward 35bn/- to the market for tendering.

Commercial banks have remained the main investors in government securities, contributing over 60 per cent of the total market share. Pension Funds, insurance and few microfinance firms are among the key investment players in the instruments as well.
Source: Daily News, reported from Dar es Salaam, Tanzania
Share on Google Plus

About Abduel Elinaza

This is a short description in the author block about the author. You edit it by entering text in the "Biographical Info" field in the user admin panel.