12 January 2018

Tanzania: Appetite for Treasury Bills Still High

Investor — Appetite for government debt instruments has continued to remain strong, as the Treasury bills that were floated on Wednesday by the Bank of Tanzania (BoT) were oversubscribed by more than 100 per cent.

The auction summary published on the BoT website shows that a total of Sh276.25 billion were tendered against an offer of only Sh119 billion - translating into an oversubscription of Sh157.25 billion.

Although a total of 154 bids were received, only 30 of the lot worth Sh119 billion were declared successful.

However, the average yield for Wednesday's float was 7.11 per cent. This is lower than the average rate of 8.34 per cent that was recorded at the auction conducted on November 29 last year.

The auction's oversubscription was also lower than that which was recorded at the auction held in November 29 last year, namely total of Sh233 billion in oversubscriptions. The one-year maturity offer received 114 bids, out of which only 21 were declared successful. The six-months maturity received 34 bids - with only five of them declared successful. The 35-and-91-days maturities received three bids each, out of which two were successful in each of the maturity offers.

The BoT report also shows that the 35-and-90-days maturities which were not receiving yields during the previous auction will now receive 3.45 per cent and 3.75 per cent respectively.

The Bank of Tanzania has also reduced the yields for the 182-day maturity from 6.88 per cent during the November float to 4.37 per cent today. In like manner, the one-year maturity yield was also lowered to Sh7.65 per cent - down from the 9.29 per cent recorded in the December 29 auction last year.

The central bank's summary further shows that the T-bills for all maturities were oversubscribed, with many bids received for the one-year maturity.

The 35-day maturity bills were oversubscribed by Sh105 million; 91-days (Sh1.5 billion); 182 days (Sh42.53 billion) - with the one-year maturity being oversubscribed by Sh113.11 billion.

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