22 January 2013

Tanzania: Treasury Bills Higher Yields Lift Sales

HIGHER yields of the one-year treasury bills maturities auction conducted last week helped in attracting massive investments leading to oversubscriptions.

The auction results show that a treasury bills worth 125bn/- were floated in the market Bank of Tanzania (BoT), but bids submitted jumped to 177.5bn/-. It is the first 12 months treasury bills auction in this year to record outstanding results after poor performances of the money markets towards end of the year 2012.

The beginning of the year has witnessed the market post improved performances on trading of government securities, compared to the preceding period that saw deteriorating investors' appetite. However, apart from the oversubscription, successful bids were for 143.9bn/-.

Similarly, yields increased in all maturities in comparison to the previous auction. The average interest rates rose to 14.31 per cent compared to 13.31 per cent of the previous session, which is equivalent to 1 per cent change.

Yields for the 364 days offer increased to 14.46 per cent compared 13.9 per cent offered in the preceding market, thus managing to hook bids worth 106.3bn/- against 45bn/- put by the bank for tendering. Interest rates for the 182 tenor rose to 14 per cent compared to 13.32 per cent of the earlier session, thus hooking bids valued 45.89bn/- against 40bn/- offered for tendering.

However, apart from a slight increase in the rate of return for the 91 days to 11.98 per cent compared to 11.92 per cent of the preceding market, it was undersubscribed to 21.16bn/- against 35bn/- placed for tendering by the bank. Likewise, an increase in yield rates for the 35 days offer to 7.03 per cent compared to 6.98 per cent of the previous session with total amount tendered of 155m/- against 5bn/- offered for tendering.

Over 60 per cent of the key players of long term maturities are commercial banks, with only five per cent as retail investors. Others are pension funds, insurance companies and a few micro-finance institutions.

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