T-bills bull run halted

The short term government note has ended its impressive performance after recording under subscription in the last week treasury bills auction for the first time since the beginning of the year.

The average weighted yield made its way upward to 9.37 per cent from 8.92 per cent of the previous session at an auction that saw investors’ low demand for the short term government paper, the Bank of Tanzania (BoT) has said.

Yield rates across all tenors declined significantly but did not discourage investors to scramble for the investment opportunity in the treasury bills.

The yield on the 364 days edged up to 10.37 per cent from 9.71 per cent of the auction held two weeks ago attracting bids worth 21.81bn/- against 55bn/- offered to the market.

Similarly, yield on the six months treasury bills increased to 9.78 per cent from 8.99 per cent of the previous session with total amount tendered rising to 48.35/-, up from 45bn/- offered for bidding.

For the 91 days tenor, yield rate made a slight increase to 6.86 per cent from 6.63 per cent of the other session attracting bids worth 23.32bn/- compared to 32bn/- offered to the market. Investors shunned from the 35 days offer although a total of 3bn/- was offered for bidding.

The participation of investors particularly from the East African region in the debt securities has increased competitions, the situation that is benefiting the government borrowing at the minimal price.

The BoT auction summary shows further that short term paper became under subscribed to 93.48bn/- compared to 135bn/- offered to the market for bidding.

The poor participation of investors in the short term government paper immediately after the long public holidays resulted to low performance.
Source: Daily News reported from Dar es Salaam, Tanzania
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