Africa-Press – Tanzania. Treasury bills yields are expected to further decrease in today’s auction as investors seem to steer away from low yielding instruments.
The debt analysts urged that, for instance, the weighted average yields of 364 days bill auctioned fortnight ago dropped below inflation thus losing the real value of the investment.
Zan Securities said in a special analytical report for the Treasury bill trend issued last week that the low yields also resulted in cancelling and under subscription of the bills.
“We largely attribute the under-subscription to investors reduced appetite as a result of reduced yields,” Zan Securities said in the report.
The weighted average yield recorded in the last auction for 364 days bill was 3.62 per cent lower than August’s inflation rate of 3.8 per cent.
“This means,” Zan Securities said, “investors are losing real value of money investing in treasury bills”
Also, some analysts have it that the fall in Treasury bill yields could also be attributed to expansionary monetary policy measures being implemented by the central bank as a vital step towards expanding the money supply to the economy.
Nevertheless, Vertex International Securities said in a weekly report that despite yields of the 10 years Treasury bond increasing last Wednesday the bills won’t follow suit since there is no correlation between the two.
“We forecast yields to decrease in the next week’s auction for Treasury Bills as we see no correlation between those two Treasury securities,” Vertex said.
The 364-day bill yield has fallen for the last 10th consecutive auctions moreover auctions continue to be undersubscribed for the third consecutive session.
This decrease in the 364-day Treasury bill yield may be seen to have recourse to the stock exchange as investors steer from low yielding instruments towards equity investments that offer relatively higher returns.
In today’s auction the Bank of Tanzania sought to raise 72.7bn/- from the 364-day Treasury bill, 3.0bn/- from the 182-day, 1.0n/- and 1.7bn/- from 35-day and 91-day respectively.
However, in several previous auctions, 35days and 91 days bills had been nullified due to a lack of bidders.
