High Treasury bills returns woo investors back to fold

Dar es Salaam. The Central Bank of Tanzania has doubled yields for Treasury bills in a period of three months, attracting investors after eight consecutive weeks of undersubscriptions.

The Bank of Tanzania (BoT) report shows that the yields have been doubled to 7.78 per cent during the auction held on Tuesday from 3.38 per cent recorded during the May 2 auction.

Analysts say the improvement in yields by government debt instruments has attracted investors who were previously discouraged by low yields.

The chief executive officer of Orbit Securities Limited, Mr Juventus Simon, said yield improvements attracted the confidence of more investors in the financial market.

“After a long time of struggle investors are now gunning for short-time government securities with more expectations following an improvement in returns,” he said. The BoT report has indicated that the improvement in yields enabled the previous auction conducted on Tuesday this week to end up being oversubscribed, after an under-subscription trend for eight weeks.

The auction results show that Tuesday’s float was oversubscribed by 68.8 per cent for the first time since April 4, this year.

The auction results summary shows that weighted average yields rose to 7.78 per cent during the Tuesday auction from 3.38 per cent on May 2 and 7.61 per cent from the July 25 auction.

During Tuesday’s auction yields for three, six-months and one-year yields improved.

According to the T-Bills auction summary, a total of 101 bids valued at Sh238.6 billion were tendered against Sh114.5 billion offered, an oversubscription of Sh97.6 billion.

At the end of the auction only 36 bids valued at Sh114.5 billion, which is equivalent to the offered amount, were successful.