As the BoT seeks to remove excess liquidity from the market, the
continuation of the trend of allotting more bills than what was
originally auctioned.
Apart from the oversubscription, the successful
amount fetched was 105bn/- an indication that some bidders tendered
below the price offered in the market which could be expensive for the
BoT during the bond's maturity, in the payback period.
The number of successful bids received was 55 out of 72 with the
highest and lowest bids being 80.60 and 90.81 respectively. The weighted
average yield to maturity was 14.26 per cent slightly lower than the
rate offered in the previous auction of 14.53 per cent.
According to the NMB e-markets, "weighted average yield for a two
year bond has fallen to 14.27 per cent from 14.53 per cent in an auction
which was oversubscribed by 111.6 per cent a sign of a liquid market
and a growing appetite on government papers."
"The BoT auctioned 55bn/- in a 2-year maturities bond at 7.82 per
cent coupon. Yields slightly increased between 5-10 basis points as
investors continue to lock higher yields in bonds," remarked the
Standard Chartered Bank in its Daily Market Commentary.
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 from Dar es Salaam
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