Investors continue to dwell on govt debts securities

Friday February 8 2019


By Halili Letea @hletea

Dar es Salaam. Investors have continued to dwell on government debt securities after the yields increased. So, the Treasury bills floated on Wednesday were oversubscribed.

The Bank of Tanzania (BoT) auction results show that the Wednesday float was oversubscribed by 19.9 per cent. This is the fourth consecutive oversubscription for T-Bills.

The central bank slightly improved the weighted average yield to 9.21 per cent compared to 8.69 per cent of the previous float held on January 23, 2019.

Auction summary shows that a total of 118 bids valued at Sh169.16 billion were tendered against offers of Sh141 billion, which is an oversubscription of Sh28.16 billion.

At the end of the auction, the central bank accepted 91 bids only valued at Sh128.66 billion.

Six-month and one-year maturity bills continue to remain most attractive due to high yields.

This week, auction yields for one-year bills marginally decreased to 9.23 per cent compared to 9.32 per cent recorded during the previous auction held on January 9, 2019 while the six-month bill has marginally risen by 5.27 per cent.

For the third consecutive auction, 35 and 91-day bills continue to have no bidders.

Many bids (111 bids) were received for the one year bills while the remaining maturities received only seven bids including five bids for six months maturity and two bids three-month maturity bills while 35 bills maturity receive no bid.

According to the BoT’s Monthly Economic Review (MER) for December, in November 2018, the Central Bank conducted four Treasury bills auctions for fiscal and monetary policy operations.

Total treasury bills worth Sh283.4 billion were offered and bids received amounted to Sh227.64 billion. Successful bids amounted to Sh201.8 billion. Overall weighted average yield increased to 8.19 per cent from 7.40 per cent in October 2018.