7-year T-bonds undersubscribed

Friday November 9 2018


By Halili Letea @hletea news@tz.nationmedia.com

Dar es Salaam. Investor appetite for medium term government securities continues to remain low, despite improved yields by the Bank of Tanzania (BoT).

This was seen in the 7 year Treasury bond floated by the BoT on Wednesday, which ended up being undersubscribed by 37.2 per cent (Sh47.19 billion).

The auction summary results showed that weighted average yield to maturity marginally increased to 12.56 per cent on Wednesday from 12.27 per cent in the previous auction on August 15, while the weighted average coupon yield went up to 11.37 per cent from 11.21 per cent respectively.

The government, through the BoT, sought to collect Sh127 billion via the T-Bond, but investors only made 44 bids valued Sh79.81 billion.

At the end of auction, BoT accepted only 32 bids valued Sh64.99 billion. This indicated that the remaining amount was refunded to investors. The highest bid was 90.6411/100 while the lowest was 75.5970/100, but the weighted average price for successful bids was 88.65898. In the previous float on August 15 this year, it was undersubscribed by 89.0 per cent higher compared to this week. The BoT offered Sh127 billion but only Sh13.91 billion was tendered.