Tanzania Daily News (Dar es Salaam)

24 March 2014

Tanzania: Two-Year Govt Bonds Hook Investors

DESPITE slashing yields on the two-year treasury bonds auctioned on Wednesday, the government note remained attractive and greeted by investors' deep appetite leading to oversubscription.

The auction results by the Bank of Tanzania (BoT) show that the weighted average yield to maturity sliding to 14.4 per cent compared to 15.07 per cent of the previous session conducted early January, this year.

The outstanding performance of the short and long term government notes is a sign of high liquidity level in the circulation chasing for few investment opportunities.

Analysts say the local money market is highly liquid, the situation that made the 2-year treasury bond to be oversubscribed by 85.6bn/- with weighted average yield going down to 14.4 per cent from 15.07 per cent seen previously.

The market was offered with 30.9bn/- but high investors appetite pushed the figure to 116.5bn/- and the government taking 75bn/- as successful amount.

A total of 97 bids were received but only 57 emerged successful, indicating that some bidders' price was below the market price.

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