Africa-Press – Tanzania. THE Treasury bills yields are predicted to drop further in this quarter as the appetite continues to increase since the beginning of this year.
The bills overall weighted average yields (WAY), according to NMB Bank quarterly Market Digest, shows a downward trend to stand at 4.65 per cent end of March lower than 5.83 per cent recorded in the previous quarter. “T-bill yields in Q3 [of this year] are anticipated to further drop,” NMB, one of the largest banks said.
The demand for 182 days and 365 days are on the upper side while for 35 days waned off and demand for 91 days showed signs of recovery.
T-bill auctions conducted by the Bank of Tanzania (BoT) in Q2 offered a total of 460bn/- equals 22 per cent below the amount offered in the previous quarter.
The auctions in Q2 were cumulatively oversubscribed by 106per cent. In comparison to the 7.0 per cent under subscription in Q1, this increased appetite for the short-term papers is mainly attributed to the prevailing liquidity in the market.
Vertex International Securities said in its Weekly Market Review that it anticipated the bill yields to go down given the happening of the 7-year Treasury bond that went under the hammer last week.
“However, yields continued with the downward trend and we expect yields to continue to decline in this week auction for Treasury bills,” Vertex said.
Orbit Securities said BoT maintained a deceleration of Treasury yields in the auction held for the 7-year Treasury bond held mid-last week.
During the auction, the central bank offered 127bn/-, somewhat 18.7 per cent higher than the offer in the previous similar auction.
The offer was undersubscribed by 20.7per cent as the tender size from the public amounted to 100.76bn/-, with the highest bid price rising to 106/00.
The BoT accepted 100.64bn/- with the lowest successful bid price being 98/0022. The successful amount was 20.7 per cent less than the total offer from the central bank.
The weighted average coupon yield dropped by 1.5bps to close the auction at 10.0932 per cent following a rise in the weighted average successful price from 99/7165 during the previous similar auction to 99/8690.
