AfricaPress-Tanzania: THE 15 years Treasury bond was surprisingly undersubscribed mid-last week against debt analysts’ projection as investors seemed to shift appetite for the longer- term instrument.
However, analysts predicted right that the yield for the instrument was bound to increase albeit slightly. Zan Securities Chief Executive Officer Mr Raphael Masumbuko said the 15years bond was surprisingly undersubscribed compared to the oversubscription trend of long term bond auctions.
“Investor appetite seems to mostly aim towards the 20 years and 25 years auctions as they yield higher returns,” Mr Masumbuko said in the firm’s weekly market wrap-ups.
The bond average yield to maturity went up slightly by 0.1 percentage point to 13.6 per cent while the average price was 99.2939/-.
Vertex International Securities said in its weekly market review that the last week auction results echoed their predictions that yields would go up. “The auction results for 15 – Year Bond echoed last week forecast where we expected a slight increase in yields,” Vertex said in the report.
The central bank sought to raise 140bn/-from the public at the end of the day tendered 109.21bn/- well below the target amount.
Vertex also forecasted that the Treasury bills that go under the hammer mid this week would follow the bond yields curve pattern.
“We expect Treasury bills to follow suit this week” bond yields curve trend, Vertex report noted. Last week some debt analysts said, the change in bills yield rates, would not significant changes the 15- year Treasury bond trend.
Vertex International Securities, Manager for Advisory and Capital Market, Mr Ahmed Nganya said it was too early for the bills happening to change the bond yield curves.
In the fortnight ago, the yields of the 182 days and 364 days bills, both went down by 38 basis points (bps) and 9bps to 3.53 per cent and 5.91 per cent respectively.
The remaining two 35 and 91 days bills received zero bids.