INVESTORS' appetite for the 12-month treasury bills auctioned by the Bank of Tanzania (BoT) has remained high, leading to 7.5 per cent oversubscription.
The auction results that the central bank posted on Wednesday showed that the weighted average yield increased slightly to 14.96 per cent compared to 14.49 per cent of the previous session. But, apart from the oversubscription, the government ended up accepting only 110.42bn/- out of the 156bn/- tendered.
A total of 147 bids emerged successful out of 222 received, an indication that some bids were below the market value offered. The oversubscription that has characterised most of the auctions of the government papers is a clear sign of the improved liquidity in the market.
The bank report underscores further that there was high appetite for 364-day bills but there was no appetite for 35-day instrument. The total amount tendered for the 364-day offer was 68.87bn/- against the 50bn/- initially sought at an interest rate of 15.88 per cent, up from the previous 15.31 per cent.
The 182-day offer was subscribed to 52.12bn/- against the 50bn/- offered for tendering at a return rate of 15.75 per cent, slightly higher than the previous session's 15.15 per cent. However, total amount tendered for the 91 day offer declined to 35bn/- against 40bn/- despite increase of yield rates to 13.06 per cent compared to 12.6 per cent rate of the preceding market. There was no demand for the 35-day offer.
Commercial banks have remained the main investors in government securities, contributing over 60 per cent of the total market share. Pension Funds, insurance and few micro-finance institutions firms are among the key investment players in the instruments as well.