Govt bonds remain attractive

A slight decline of the weighted average yield to maturity in the two years treasury bonds did not discourage investors from investing heavily in the government paper, reflecting the sign of steady liquidity in the economy.

Similarly, apart from the fulfillment of the end of month obligations by most investors like paying various taxes and salaries to the employees, that was not a reason enough to discourage them from investing heavily in the two years government paper.

The auction results on the two years bond posted by the Bank of Tanzania (BoT) on Wednesday shows that yield to maturity declined 14.9 per cent compared to 15.4 per cent offered in the previous session conducted in September this year.

The government offered 30.9bn/- to the market but at the closing of the tender bids worth 131.6bn/- was mobilised as the amount tendered, equivalent to 105.5 per cent over-subscription.

However, apart from the over subscription, the government took only 30.9bn/- as successful amount, an indication that some bids were below the market price.

For example, only six out of 89 number of bids received emerged successful. Commercial banks remained top investors in government securities contributing over 60 per cent of the total market share.

Pension funds, insurance and few micro-finance institutions firms are among the key investment players in the instruments. 

Source: Daily News, reported from Dar es Salaam, Tanzania

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