AfricaPress-Tanzania: THE undersubscription of the 10-year Treasury bond has intensified to 73 per cent despite the average price being at the discount rate.
The Bank of Tanzania (BoT) sought to rise 133bn/- but the public tendered 36.03bn/- making it one of the lowest bid amounts in recent auctions.
Orbit Securities said in its Weekly Market Synopsis report that the highest bid price and lowest bid price was Tsh 101.00 and Tsh 88.9226, in comparison to the previous auction which saw the highest and lowest bid prices stand at Tsh 100.00 and Tsh 96.60, respectively.
“The rate of under subscription for the 10 years Treasury bond intensified to 73 per cent compared to 54 per cent during an auction held last December,” Orbit report said.
The BoT accepted only 26 bids out of 36 worth 2.01bn/- leaving 34bn/- on the table. The minimum accepted price stood at 96.63/- while the average successful price was 99.0546/-.
“The weighted average coupon yield went up by 4.68bps to 11.5492 per cent,” Orbit, one of the largest brokerage firm, said. Zan Securities projected right that the yields will increase for the 10 years bond.
“We expect yields to continue increasing for the 10 – Year Treasury Bond,” Zan said in its Weekly Market Wrap-ups.
On other hand, the exchange trading days were reduced to three from five days to leave a room for state funeral and burial ceremonies of former President John Magufuli, on 22th and 26th March in Dodoma and in Chato, Geita respectively.
“The week saw only one trading session, which was a reason for a significant decline in the value of transactions,” Orbit said.
The total value of transactions during the session was 10bn/- which was 84 per cent lower than the previous week.
Fortnight ago the central bank introduced a 25-year Treasury bond which may impact the junior bond trending volume due to its high yields rates to maturity of 15.95 per cent.
The BoT pegged its auction late next month while debt analysts predicting an oversubscription.
