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Monday 16 March 2015

TANZANIA: TREASURY BILLS YIELD DECLINE DESPITE DEMAND

March 16, 2015. INVESTORS’ appetite for the treasury bills remained impressive resulting into oversubscriptions.

According to the Bank of Tanzania (BoT) auction summary, yield rates across all tenors declined significantly, but did not discourage investors to scramble for the investment opportunity in the treasury bills.

For the 364 days offer yields declined to 10.33 per cent compared to 11.9 per cent of the previous session but investors appetite remained strong after attracting bids worth 102.69/- against 55bn/- offered to the market for bidding.

The 182 days tenor yields declined to 9.21 per cent compared to 11.45 per cent but the amount tendered overshoot to 219.06bn/- compared to 45bn/- that was put in the market for bidding.

The 91 days offer was also received on a high note after attracting bids worth 62.38bn/- against 32bn/- offered for sale. Interest rates for the 91 days offer slipped to 7.60 per cent compared to 8.42 per cent of the previous session.

Similarly, the appetite for the 35 days tenor has continued to be high after attracting bids worth 4bn/- compared o 3bn/- sold at 3.05 per cent down from 4 per cent yield rate of the other session.

The participation of investors particularly from the East African region in the debt securities has increased competition, the situation that is benefiting the government borrowing at the minimal price.

The BoT auction summary shows further that short term paper became over subscribed to 388.13bn/-, which is over three times the 135bn/- offered to the market for bidding.

Similarly, the outstanding performance of the debt securities is attributed to the improved liquidity in the circulation that finds insufficient investment opportunities in the money markets.

The short term borrowing saw 280 number of bids being received but only 55 succeeding but at the end only 135bn/- was retained as successful bids.

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