THE Bank of Tanzania (BoT) has been raking up more sum than offered on government securities sales since end of March, a move seems to relax treasury yields.
The central bank trend, according to debt market analysts, is expected to push Wednesday's T-bill yield up, albeit slight.
Zan Securities Chief Executive Officer (CEO), Raphael Masumbuko said owing to what happened in the last sale of 2 0 years government bond they expecting yield rate for Wednesday T-bill sale to slight go up.
"We expect a slight increase in yield in [ this] week auction for Treasury Bills owing to what happened in this week's auction for the Treasury bond,"
Mr Ma- sumbuko said in Zan's Weekly Market Wrap-ups. Last Wednes- day, BoT offered a 2 0-year T- bond worth the usual 117 bn/-but investors tendered 2 3 0.6 bn/-.
The 2 0-year bond tender size was 16 .7 percent lower than amount from the previous bond auction held last month.
The amount accepted by the BoT went up to 2 00.7 bn/- compared to 17 0bn/-during the previous auction.
Orbit Securities said yester- day despite a slowdown in the public's appetite, the sum raised by the government rose by 18 per cent for the most profitable government security.
"Despite the [ BoT] rais- ing the successful amount, the weighted average yield to maturity marginally lost 6 bps to 15.7 8 8 6 percent," Orbit said in its Weekly Market Synopsis report.
Analysts have it that amid this coronavirus pandemic, the government securities are con- sidered as a safe investment compared to stocks.
Dar es Sa- laam Stock Exchange (DSE), according to Orbit Securities, "is still in a distasteful shape", with turnovers at lowest point in the market's recent history.
The daily average turnover since the beginning of May amounts to 3 .7 5m/-compared to 2 .1bn/-for January and February.
Tanzania Securities, how- ever, said in their Weekly Mar- ket Blast the treasury securities yield curve may continue to re- main normal. "[ While] ... weighted aver- age yields are expected to de- cline, this indicates low funding cost by the government" Tanzania Securities said.
However, the firm, projected oversubscription of the treasury bill due to the higher appetite for government securities.