Investors’ appetite for debt instruments up

Dar es Salaam. The Treasury bills floated by the Bank of Tanzania (BoT) on Tuesday this week were oversubscribed, which indicates increased investors’ appetite on government debt instruments.

This is the second consecutive auction to be oversubscribed, after another float held two weeks ago was oversubscribed.

The Tuesday auction results show that a total of 123 bids valued at Sh164.7 billion were tendered against the Sh141 billion offered. At the end of the auction, the central bank accepted only 98 bids valued at Sh138.29 billion, which was lower than the offered amount.

This was lower than the Sh238.6 billion tendered against Sh141 billion offered during the previous auction two weeks ago.

The auction results show that the central bank slightly increased yields for six months and one year maturities, which seems to attract more investors, compared with the 35-day and 91-day maturities.

The yields for six months maturity increased to 5.33 per cent during Tuesday’s auction, slightly higher than 5.29 per cent recorded during the previous auction two weeks ago.

The yields for three months maturity slowed to 2.93 per cent on Tuesday’s float from 2.99 per cent during the previous auction while 35-day maturity increased to 2.79 per cent from 2.50 per cent.

The weighted average yields for Tuesday’s float was 7.35 per cent, lower than the 7.75 per cent recorded during the previous float held on August 7.

The auction results show that many bids were received on six months and one year maturity were by they recorded a combined bid valued at Sh158 billion against the Sh137 billion offered.

The six months and one year maturities received 117 bids but only 95 were successful while the 35-day and 91 day maturities together received six bids of which only three were successful.